diff --git a/extensions/intellij/src/main/kotlin/com/github/continuedev/continueintellijextension/continue/UriUtils.kt b/extensions/intellij/src/main/kotlin/com/github/continuedev/continueintellijextension/continue/UriUtils.kt
index ca5d0e21b3b..85dd12510e7 100644
--- a/extensions/intellij/src/main/kotlin/com/github/continuedev/continueintellijextension/continue/UriUtils.kt
+++ b/extensions/intellij/src/main/kotlin/com/github/continuedev/continueintellijextension/continue/UriUtils.kt
@@ -23,10 +23,11 @@ object UriUtils {
         // Remove query parameters if present
         val uriStr = uri.substringBefore("?")
 
-        // Handle Windows file paths with authority component
+        // Handle Windows file paths with authority component (e.g. file://C:/path/to/file)
+        // Use File.toURI() to properly percent-encode special characters like [ ] in paths
         if (uriStr.startsWith("file://") && !uriStr.startsWith("file:///")) {
             val path = uriStr.substringAfter("file://")
-            return URI("file:///$path")
+            return File(path).toURI()
         }
 
         return try {
diff --git a/extensions/intellij/src/test/kotlin/com/github/continuedev/continueintellijextension/unit/UriUtilsTest.kt b/extensions/intellij/src/test/kotlin/com/github/continuedev/continueintellijextension/unit/UriUtilsTest.kt
index a718f722bae..3bb53612edc 100644
--- a/extensions/intellij/src/test/kotlin/com/github/continuedev/continueintellijextension/unit/UriUtilsTest.kt
+++ b/extensions/intellij/src/test/kotlin/com/github/continuedev/continueintellijextension/unit/UriUtilsTest.kt
@@ -60,4 +60,34 @@ class UriUtilsTest : TestCase() {
         val expectedFile = File("/path/to/file with spaces")
         assertEquals(expectedFile, result)
     }
+
+    /**
+     * Validates that square brackets in file paths are handled correctly.
+     * This is a regression test for GitHub issue #10978.
+     * Frameworks like Next.js and FiveM use bracket-named directories
+     * (e.g. [gamemode]) which caused URI parsing to crash.
+     */
+    fun `test square brackets in path`() {
+        val uri = "file:///path/to/[gamemode]/file.lua"
+        val result = UriUtils.uriToFile(uri)
+        assertEquals(File("/path/to/[gamemode]/file.lua"), result)
+    }
+
+    /**
+     * Validates that Windows-style file URIs with square brackets are handled.
+     * Regression test for GitHub issue #10978 — the original crash occurred
+     * specifically with Windows two-slash file:// URIs.
+     */
+    fun `test Windows path with square brackets`() {
+        val uri = "file://C:/Users/user/projects/[gamemode]/file.lua"
+        val parsed = UriUtils.parseUri(uri)
+        assertEquals("file", parsed.scheme)
+        // Brackets must be percent-encoded or absent as raw characters in a valid URI
+        assertFalse("Raw square brackets should not appear in URI path",
+            parsed.toString().contains("[") || parsed.toString().contains("]"))
+        assertTrue("Path should preserve directory structure",
+            parsed.path.contains("Users/user/projects"))
+        assertTrue("Path should end with file name",
+            parsed.path.endsWith("file.lua"))
+    }
 }