diff --git a/NEWS.md b/NEWS.md
index 1a6ca751d..97d31870d 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -28,6 +28,8 @@
 
 1. `fread()` with `skip=0` and `(header=TRUE|FALSE)` no longer skips the first row when it has fewer fields than subsequent rows, [#7463](https://github.com/Rdatatable/data.table/issues/7463). Thanks @emayerhofer for the report and @ben-schwen for the fix.
 
+2. `fread("file://...")` works for file URIs with spaces, [#7550](https://github.com/Rdatatable/data.table/issues/7550). Thanks @aitap for the report and @MichaelChirico for the PR.
+
 ## data.table [v1.18.0](https://github.com/Rdatatable/data.table/milestone/37?closed=1)  23 December 2025
 
 ### BREAKING CHANGE
diff --git a/R/fread.R b/R/fread.R
index 16a72ed24..87a544ad7 100644
--- a/R/fread.R
+++ b/R/fread.R
@@ -63,7 +63,7 @@ yaml=FALSE, tmpdir=tempdir(), tz="UTC")
       # input is data itself containing at least one \n or \r
     } else if (startsWith(input, " ")) {
       stopf("input= contains no \\n or \\r, but starts with a space. Please remove the leading space, or use text=, file= or cmd=")
-    } else if (length(grep(' ', input, fixed=TRUE)) && !file.exists(input)) {  # file name or path containing spaces is not a command
+    } else if (length(grep(' ', input, fixed=TRUE)) && !file.exists(gsub("^file://", "", input))) {  # file name or path containing spaces is not a command. file.exists() doesn't understand file:// (#7550)
       cmd = input
       if (input_has_vars && getOption("datatable.fread.input.cmd.message", TRUE)) {
         messagef("Taking input= as a system command because it contains a space ('%s'). If it's a filename please remove the space, or use file= explicitly. A variable is being passed to input= and when this is taken as a system command there is a security concern if you are creating an app, the app could have a malicious user, and the app is not running in a secure environment; e.g. the app is running as root. Please read item 5 in the NEWS file for v1.11.6 for more information and for the option to suppress this message.", cmd)
diff --git a/inst/tests/tests.Rraw b/inst/tests/tests.Rraw
index c7205e52a..3861d7732 100644
--- a/inst/tests/tests.Rraw
+++ b/inst/tests/tests.Rraw
@@ -21959,3 +21959,13 @@ test(2355.1, fread(txt, skip=0),              data.table(V1 = c("b1", "c1"), a1
 test(2355.2, fread(txt, skip=0, header=TRUE), data.table(V1 = c("b1", "c1"), a1 = c("b2", "c2"), a2 = c("b3", "c3")), warning="Added an extra default column name")
 test(2355.3, fread(txt, skip=0, header=FALSE), data.table(V1=character(), V2=character(), V3=character()), warning="Consider fill=TRUE")
 test(2355.4, fread(txt, skip=0, fill=TRUE), data.table(V1 = c("a1", "b1", "c1"), V2 = c("a2", "b2", "c2"), V3 = c("", "b3", "c3")))
+
+# fread works on file:// URIs with spaces, #7550
+local({
+  f = tempfile("with spaces"); on.exit(unlink(f))
+  DT = data.table(a = 1L, b = 2L)
+  fwrite(DT, f)
+
+  test(2356.1, fread(f), DT)
+  test(2356.2, fread(paste0("file://", f)), DT)
+})