diff --git a/AUTHORS b/AUTHORS
index ba5672d4c51..6d56abccbfa 100644
--- a/AUTHORS
+++ b/AUTHORS
@@ -45,6 +45,7 @@ Andrzej Ostrowski
 Andy Freeland
 Anita Hammer
 Anna Tasiopoulou
+Ant Newman
 Anthon van der Neut
 Anthony Shaw
 Anthony Sottile
diff --git a/changelog/7623.bugfix.rst b/changelog/7623.bugfix.rst
new file mode 100644
index 00000000000..f7410cc445d
--- /dev/null
+++ b/changelog/7623.bugfix.rst
@@ -0,0 +1 @@
+:meth:`pytester.run <pytest.Pytester.run>` no longer raises ``UnicodeDecodeError`` when a command writes output which is not valid UTF-8, such as a Python subprocess on a host whose locale encoding is not UTF-8; the undecodable bytes are now escaped instead.
diff --git a/src/_pytest/pytester.py b/src/_pytest/pytester.py
index 80c417843bf..99b41726118 100644
--- a/src/_pytest/pytester.py
+++ b/src/_pytest/pytester.py
@@ -1405,7 +1405,7 @@ def run(
         """Run a command with arguments.
 
         Run a process using :py:class:`subprocess.Popen` saving the stdout and
-        stderr.
+        stderr. The output is decoded as UTF-8, with undecodable bytes escaped.
 
         :param cmdargs:
             The sequence of arguments to pass to :py:class:`subprocess.Popen`,
@@ -1471,7 +1471,12 @@ def handle_timeout() -> None:
             f1.flush()
             f2.flush()
 
-        with p1.open(encoding="utf8") as f1, p2.open(encoding="utf8") as f2:
+        # The command may write bytes which are not valid UTF-8. Escaping them
+        # keeps the byte values, and keeps the result printable by _dump_lines.
+        with (
+            p1.open(encoding="utf8", errors="backslashreplace") as f1,
+            p2.open(encoding="utf8", errors="backslashreplace") as f2,
+        ):
             out = f1.read().splitlines()
             err = f2.read().splitlines()
 
diff --git a/testing/test_pytester.py b/testing/test_pytester.py
index e9a20f1063c..6e8d70aea1a 100644
--- a/testing/test_pytester.py
+++ b/testing/test_pytester.py
@@ -704,6 +704,38 @@ def test_inner(pytester):
     assert result.ret == 0
 
 
+def test_run_utf8_output(pytester: Pytester) -> None:
+    """UTF-8 output from a command is decoded as UTF-8"""
+    p1 = pytester.makepyfile(
+        r"""
+        import sys
+
+        sys.stdout.buffer.write(b"h\xc3\xb6llo\n")
+        sys.stderr.buffer.write(b"w\xc3\xb6rld\n")
+        """
+    )
+    result = pytester.runpython(p1)
+    assert result.ret == 0
+    assert result.stdout.lines == ["höllo"]
+    assert result.stderr.lines == ["wörld"]
+
+
+def test_run_undecodable_output(pytester: Pytester) -> None:
+    """Output which is not valid UTF-8 is escaped instead of raising (#7623)"""
+    p1 = pytester.makepyfile(
+        r"""
+        import sys
+
+        sys.stdout.buffer.write(b"before \xf6 after\n")
+        sys.stderr.buffer.write(b"\xf6\n")
+        """
+    )
+    result = pytester.runpython(p1)
+    assert result.ret == 0
+    assert result.stdout.lines == [r"before \xf6 after"]
+    assert result.stderr.lines == [r"\xf6"]
+
+
 def test_spawn_uses_tmphome(pytester: Pytester) -> None:
     tmphome = str(pytester.path)
     assert os.environ.get("HOME") == tmphome