diff --git a/app/package.json b/app/package.json
index b52543046..f7dd4cbd0 100644
--- a/app/package.json
+++ b/app/package.json
@@ -74,6 +74,7 @@
     "tld": "^0.0.2",
     "underscore": "1.8.x",
     "underscore.string": "^3.0",
+    "utf7": "^1.0.2",
     "windows-shortcuts": "emorikawa/windows-shortcuts#b0a0fc7"
   },
   "optionalDependencies": {
diff --git a/app/spec/models/category-spec.coffee b/app/spec/models/category-spec.coffee
index dedbac3d8..10df113de 100644
--- a/app/spec/models/category-spec.coffee
+++ b/app/spec/models/category-spec.coffee
@@ -25,6 +25,10 @@ describe 'Category classes', ->
       foo = new Folder({path: 'INBOX'})
       expect(foo.displayName).toEqual('Inbox')
 
+    it "should convert the UTF7-formatted path back to UTF8", ->
+      foo = new Label({path: 'T&AOk-st F&APg-reign L&AOU-bel'})
+      expect(foo.displayName).toEqual('Tést Føreign Låbel')
+
   describe 'category types', ->
     it 'assigns type correctly when it is a user category', ->
       cat = new Label
diff --git a/app/src/flux/models/category.es6 b/app/src/flux/models/category.es6
index 5d321d9a9..276fdb704 100644
--- a/app/src/flux/models/category.es6
+++ b/app/src/flux/models/category.es6
@@ -1,4 +1,5 @@
 /* eslint global-require: 0 */
+import utf7 from 'utf7';
 import Model from './model';
 import Attributes from '../attributes';
 
@@ -57,15 +58,17 @@ Section: Models
 */
 export default class Category extends Model {
   get displayName() {
+    const decoded = utf7.imap.decode(this.path);
+
     for (const prefix of ['INBOX', '[Gmail]', '[Mailspring]']) {
-      if (this.path.startsWith(prefix) && this.path.length > prefix.length + 1) {
-        return this.path.substr(prefix.length + 1); // + delimiter
+      if (decoded.startsWith(prefix) && decoded.length > prefix.length + 1) {
+        return decoded.substr(prefix.length + 1); // + delimiter
       }
     }
-    if (this.path === 'INBOX') {
+    if (decoded === 'INBOX') {
       return 'Inbox';
     }
-    return this.path;
+    return decoded;
   }
 
   /* Available for historical reasons, do not use. */