diff --git a/ModuleFast.psm1 b/ModuleFast.psm1
index 51baf96..770733f 100644
--- a/ModuleFast.psm1
+++ b/ModuleFast.psm1
@@ -1023,7 +1023,25 @@ function Install-ModuleFastHelper {
 
               #We are going to extract these straight out of memory, so we don't need to write the nupkg to disk
               $zip = [IO.Compression.ZipArchive]::new($stream, 'Read')
-              [IO.Compression.ZipFileExtensions]::ExtractToDirectory($zip, $installPath)
+              # NuGet packages may URL-encode file names (e.g. spaces as %20), so we must decode each
+              # entry's FullName before using it as a file path. See:
+              # https://github.com/NuGet/NuGet.Client/blob/d2887cd591059fd675d397b48c79cdc30ee2b6ba/src/NuGet.Core/NuGet.Packaging/PackageArchiveReader.cs#L317
+              foreach ($entry in $zip.Entries) {
+                $decodedEntryName = [Uri]::UnescapeDataString($entry.FullName)
+                $destPath = Join-Path $installPath $decodedEntryName
+                # ZIP spec uses '/' but some tools emit '\'; treat both as directory entries
+                if ($decodedEntryName.EndsWith('/') -or $decodedEntryName.EndsWith('\')) {
+                  # Directory entry — ensure the directory exists
+                  New-Item -ItemType Directory -Path $destPath -Force | Out-Null
+                } else {
+                  # File entry — ensure parent directory exists, then extract
+                  $destDir = [Path]::GetDirectoryName($destPath)
+                  if (-not (Test-Path $destDir)) {
+                    New-Item -ItemType Directory -Path $destDir -Force | Out-Null
+                  }
+                  [IO.Compression.ZipFileExtensions]::ExtractToFile($entry, $destPath, $true)
+                }
+              }
 
               $manifestPath = Join-Path $installPath "$($context.Module.Name).psd1"
 
diff --git a/ModuleFast.tests.ps1 b/ModuleFast.tests.ps1
index 75e7ccc..7ec3fdc 100644
--- a/ModuleFast.tests.ps1
+++ b/ModuleFast.tests.ps1
@@ -82,6 +82,51 @@ InModuleScope 'ModuleFast' {
       $manifest.RootModule | Should -Be 'coreclr\PrtgAPI.PowerShell.dll'
     }
   }
+
+  Describe 'URL-decoding zip entry names during extraction' {
+    It 'Decodes URL-encoded file names (e.g. spaces as %20) when extracting a zip archive' {
+      # Build an in-memory ZIP that has a percent-encoded entry name and an explicit directory entry
+      $memStream = [System.IO.MemoryStream]::new()
+      $zipWrite = [System.IO.Compression.ZipArchive]::new($memStream, [System.IO.Compression.ZipArchiveMode]::Create, $true)
+      # Explicit directory entry with percent-encoded name
+      $zipWrite.CreateEntry('sub%20folder/') | Out-Null
+      # File entry inside the percent-encoded directory
+      $entry = $zipWrite.CreateEntry('sub%20folder/file%20with%20spaces.txt')
+      $writer = [System.IO.StreamWriter]::new($entry.Open())
+      $writer.Write('hello')
+      $writer.Dispose()
+      $zipWrite.Dispose()
+      $memStream.Position = 0
+
+      # Replicate the extraction logic from Install-ModuleFast (URL-decode each entry name)
+      $extractPath = Join-Path $TestDrive ([System.Guid]::NewGuid())
+      New-Item -ItemType Directory -Path $extractPath -Force | Out-Null
+      $zipRead = [System.IO.Compression.ZipArchive]::new($memStream, [System.IO.Compression.ZipArchiveMode]::Read)
+      foreach ($zipEntry in $zipRead.Entries) {
+        $decodedEntryName = [Uri]::UnescapeDataString($zipEntry.FullName)
+        $destPath = Join-Path $extractPath $decodedEntryName
+        if ($decodedEntryName.EndsWith('/') -or $decodedEntryName.EndsWith('\')) {
+          New-Item -ItemType Directory -Path $destPath -Force | Out-Null
+        } else {
+          $destDir = [System.IO.Path]::GetDirectoryName($destPath)
+          if (-not (Test-Path $destDir)) {
+            New-Item -ItemType Directory -Path $destDir -Force | Out-Null
+          }
+          [System.IO.Compression.ZipFileExtensions]::ExtractToFile($zipEntry, $destPath, $true)
+        }
+      }
+      $zipRead.Dispose()
+      $memStream.Dispose()
+
+      # The decoded directory should exist
+      Test-Path (Join-Path $extractPath 'sub folder') | Should -BeTrue
+      Test-Path (Join-Path $extractPath 'sub%20folder') | Should -BeFalse
+
+      # The extracted file should use the decoded name, not the percent-encoded one
+      Test-Path (Join-Path $extractPath 'sub folder' 'file with spaces.txt') | Should -BeTrue
+      Test-Path (Join-Path $extractPath 'sub folder' 'file%20with%20spaces.txt') | Should -BeFalse
+    }
+  }
 }
 
 Describe 'Get-ModuleFastPlan' -Tag 'E2E' {