diff --git a/NEWS.md b/NEWS.md
index ef2148e099..23e8d5c873 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -30,6 +30,8 @@
 
 2. `set()` now automatically pre-allocates new column slots if needed, similar to what `:=` already does, [#1831](https://github.com/Rdatatable/data.table/issues/1831) [#4100](https://github.com/Rdatatable/data.table/issues/4100). Thanks to @zachokeeffe and @tyner for the report and @ben-schwen for the fix.
 
+3. `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 16a72ed24d..87a544ad74 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 8cad916e3b..fcf78e9f36 100644
--- a/inst/tests/tests.Rraw
+++ b/inst/tests/tests.Rraw
@@ -21968,3 +21968,13 @@ test(2356.2, options=c(datatable.alloccol=1L), set(DT, j="c", value=3), data.tab
 # ensure := and set are consistent if they need to overallocate
 DT = data.table(); DT2 = data.table()
 test(2356.3, options=c(datatable.alloccol=1L), {for (i in seq(10L)) set(DT, j = sprintf("V%d",i), value = i); DT}, {for (i in seq(10)) DT2[, sprintf("V%d",i) := i]; DT2})
+
+# 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(2357.1, fread(f), DT)
+  test(2357.2, fread(paste0("file://", f)), DT)
+})