diff --git a/src/vs/base/common/uri.ts b/src/vs/base/common/uri.ts
index a84bfc7338eeb64f55d6f028609469b3cfb1c644..412efc1738840ca3fb961334f6a46ec4a653cba3 100644
--- a/src/vs/base/common/uri.ts
+++ b/src/vs/base/common/uri.ts
@@ -565,7 +565,7 @@ function _asFormatted(uri: URI, skipEncoding: boolean): string {
 	}
 	if (fragment) {
 		res += '#';
-		res += encoder(fragment, false);
+		res += !skipEncoding ? encodeURIComponentFast(fragment, false) : fragment;
 	}
 	return res;
 }
diff --git a/src/vs/base/test/common/uri.test.ts b/src/vs/base/test/common/uri.test.ts
index 597ffe35e610b7665098184c0c1911d16c649dff..618a56a1493cdc1390486946f6fd4d17ee2df7fc 100644
--- a/src/vs/base/test/common/uri.test.ts
+++ b/src/vs/base/test/common/uri.test.ts
@@ -451,6 +451,16 @@ suite('URI', () => {
 		assert.equal(fileUri2.authority, '');
 	});
 
+	test('Ctrl click to follow hash query param url gets urlencoded #49628', function () {
+		let input = 'http://localhost:3000/#/foo?bar=baz';
+		let uri = URI.parse(input);
+		assert.equal(uri.toString(true), input);
+
+		input = 'http://localhost:3000/foo?bar=baz';
+		uri = URI.parse(input);
+		assert.equal(uri.toString(true), input);
+	});
+
 	test('URI - (de)serialize', function () {
 
 		var values = [