--- setuptools/command/easy_install.py
+++ setuptools/command/easy_install.py
@@ -1498,8 +1498,13 @@
 def is_sh(executable):
     """Determine if the specified executable is a .sh (contains a #! line)"""
     try:
-        fp = open(executable)
+        fp = open(executable, "rb")
         magic = fp.read(2)
+        if sys.hexversion >= 0x3000000:
+            try:
+                magic = magic.decode()
+            except UnicodeDecodeError:
+                magic = magic.decode("utf_8", "replace")
         fp.close()
     except (OSError,IOError): return executable
     return magic == '#!'