diff --git a/papermill/s3.py b/papermill/s3.py
index c756e7c7..d54a0898 100644
--- a/papermill/s3.py
+++ b/papermill/s3.py
@@ -282,7 +282,7 @@ def cat(
         size = 0
         bytes_read = 0
         err = None
-        undecoded = ''
+        undecoded = b''
         if key:
             # try to read the file multiple times
             for i in range(100):
@@ -317,8 +317,8 @@ def cat(
 
                         if encoding and not raw:
                             try:
-                                decoded = undecoded + s.decode(encoding)
-                                undecoded = ''
+                                decoded = (undecoded + s).decode(encoding)
+                                undecoded = b''
                                 yield decoded
                             except UnicodeDecodeError:
                                 undecoded += s
diff --git a/papermill/tests/test_s3.py b/papermill/tests/test_s3.py
index bf006830..ebc15cce 100644
--- a/papermill/tests/test_s3.py
+++ b/papermill/tests/test_s3.py
@@ -152,6 +152,7 @@ def test_s3_defaults():
 test_string = 'Hello'
 test_file_path = 'notebooks/s3/s3_in/s3-simple_notebook.ipynb'
 test_empty_file_path = 'notebooks/s3/s3_in/s3-empty.ipynb'
+test_unicode_file_path = 'notebooks/s3/s3_in/s3-unicode.txt'
 
 with open(os.path.join(local_dir, test_file_path)) as f:
     test_nb_content = f.read()
@@ -171,11 +172,13 @@ def s3_client():
     client.create_bucket(Bucket=test_bucket_name, CreateBucketConfiguration={'LocationConstraint': 'us-west-2'})
     client.put_object(Bucket=test_bucket_name, Key=test_file_path, Body=test_nb_content)
     client.put_object(Bucket=test_bucket_name, Key=test_empty_file_path, Body='')
+    client.put_object(Bucket=test_bucket_name, Key=test_unicode_file_path, Body='')
     yield S3()
     try:
         client.delete_object(Bucket=test_bucket_name, Key=test_file_path)
         client.delete_object(Bucket=test_bucket_name, Key=f"{test_file_path}.txt")
         client.delete_object(Bucket=test_bucket_name, Key=test_empty_file_path)
+        client.delete_object(Bucket=test_bucket_name, Key=test_unicode_file_path)
     except Exception:
         pass
     mock_aws.stop()
@@ -214,5 +217,14 @@ def test_s3_listdir(s3_client):
     s3_dir = f"s3://{test_bucket_name}/{dir_name}"
     s3_path = f"s3://{test_bucket_name}/{test_file_path}"
     dir_listings = s3_client.listdir(s3_dir)
-    assert len(dir_listings) == 2
+    assert len(dir_listings) == 3
     assert s3_path in dir_listings
+
+
+def test_s3_read_multibyte_chunks(s3_client):
+    s3_path = f"s3://{test_bucket_name}/{test_unicode_file_path}"
+    multibyte_content = "第一行\n第二行"
+    s3_client.cp_string(multibyte_content, s3_path)
+
+    cat_data = ''.join(s3_client.cat(s3_path, buffersize=1))
+    assert cat_data == multibyte_content