diff --git a/CHANGELOG.md b/CHANGELOG.md
index 5c03609..169db9a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,11 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Added
 
+- Streaming byte decode. `PureXML.parse(pullingBytes:)` and
+  `events(pullingBytes:)` accept an incremental byte source (`() -> UInt8?`) and
+  decode UTF-8 or UTF-16 on the fly, so the bytes are never fully buffered.
+  Encoding is detected from the leading bytes; invalid sequences become the
+  Unicode replacement character rather than failing the stream.
 - Namespace resolution. Qualified names now carry an optional resolved
   `namespaceURI`, populated by the parser from in-scope `xmlns` declarations at
   the start-element boundary (the libxml2 SAX2 model). A default namespace applies
diff --git a/README.md b/README.md
index 07579bc..8b18da8 100644
--- a/README.md
+++ b/README.md
@@ -54,7 +54,7 @@ flowchart TB
   Limits["Bounded-by-default limits"]:::done
   Bytes["Byte input + encoding detection"]:::done
   Namespaces["Namespace resolution"]:::done
-  ByteStream["Streaming byte decode"]:::todo
+  ByteStream["Streaming byte decode"]:::done
   DTD["Optional DTD + entities"]:::todo
   Validation["Schema validation"]:::todo
   XPath["XPath 1.0"]:::todo
diff --git a/Sources/API.swift b/Sources/API.swift
index d81f33e..73be113 100644
--- a/Sources/API.swift
+++ b/Sources/API.swift
@@ -45,6 +45,25 @@ public extension PureXML {
         Parsing.EventReader(pulling: pull, limits: limits)
     }
 
+    /// Parses an XML document from an incremental byte source, decoding the
+    /// encoding on the fly so the bytes are never fully buffered.
+    static func parse(
+        pullingBytes pull: @escaping () -> UInt8?,
+        limits: Parsing.Limits = .default,
+    ) throws -> Model.Node {
+        try Parsing.Parser().parse(pullingBytes: pull, limits: limits)
+    }
+
+    /// Returns a streaming ``Parsing/EventReader`` over an incremental byte
+    /// source, decoding the encoding on the fly.
+    static func events(
+        pullingBytes pull: @escaping () -> UInt8?,
+        limits: Parsing.Limits = .default,
+    ) -> Parsing.EventReader {
+        var decoder = Parsing.StreamingDecoder(pullingBytes: pull)
+        return Parsing.EventReader(pulling: { decoder.next() }, limits: limits)
+    }
+
     /// Serializes a ``Model/Node`` tree into XML with the selected options.
     static func serialize(
         _ node: Model.Node,
diff --git a/Sources/Parsing/Parser.swift b/Sources/Parsing/Parser.swift
index 72d2ad9..ec46658 100644
--- a/Sources/Parsing/Parser.swift
+++ b/Sources/Parsing/Parser.swift
@@ -36,6 +36,17 @@ public extension PureXML.Parsing {
             try build(EventReader(pulling: pull, limits: limits))
         }
 
+        /// Parses a single XML document from an incremental BYTE source, decoding
+        /// the encoding (UTF-8 or UTF-16) on the fly so the bytes are never fully
+        /// buffered. The closure returns the next byte or nil at end of input.
+        public func parse(
+            pullingBytes pull: @escaping () -> UInt8?,
+            limits: Limits = .default,
+        ) throws -> PureXML.Model.Node {
+            var decoder = StreamingDecoder(pullingBytes: pull)
+            return try build(EventReader(pulling: { decoder.next() }, limits: limits))
+        }
+
         private func build(_ source: EventReader) throws -> PureXML.Model.Node {
             var reader = source
             var roots: [PureXML.Model.Node] = []
diff --git a/Sources/Parsing/StreamingDecoder.swift b/Sources/Parsing/StreamingDecoder.swift
new file mode 100644
index 0000000..c0cb57e
--- /dev/null
+++ b/Sources/Parsing/StreamingDecoder.swift
@@ -0,0 +1,121 @@
+extension PureXML.Parsing {
+    /// Decodes a byte stream into characters incrementally. It detects the
+    /// encoding from the leading bytes (buffering only those few), strips any
+    /// byte-order mark, then yields one Unicode scalar at a time as a Character,
+    /// so a byte source is never fully materialized. Invalid sequences yield the
+    /// Unicode replacement character rather than failing the stream.
+    ///
+    /// This works at scalar granularity; a multi-scalar grapheme cluster is
+    /// surfaced as separate characters, which is harmless for XML tokenization.
+    struct StreamingDecoder {
+        private let pull: () -> UInt8?
+        private var encoding: InputEncoding?
+        private var prefix: [UInt8] = []
+        private var prefixIndex = 0
+        private var finished = false
+
+        private static let replacement: Character = "\u{FFFD}"
+
+        init(pullingBytes pull: @escaping () -> UInt8?) {
+            self.pull = pull
+        }
+
+        /// Returns the next decoded character, or nil at the end of the stream.
+        mutating func next() -> Character? {
+            if encoding == nil {
+                detect()
+            }
+            guard !finished, let encoding else {
+                return nil
+            }
+            switch encoding {
+            case .utf8:
+                return nextUTF8()
+            case .utf16BigEndian:
+                return nextUTF16(bigEndian: true)
+            case .utf16LittleEndian:
+                return nextUTF16(bigEndian: false)
+            }
+        }
+
+        private mutating func detect() {
+            while prefix.count < 4, let byte = pull() {
+                prefix.append(byte)
+            }
+            let detected = InputEncoding.detectWithBOM(prefix)
+            encoding = detected.encoding
+            prefixIndex = detected.bomLength
+        }
+
+        private mutating func nextByte() -> UInt8? {
+            if prefixIndex < prefix.count {
+                let byte = prefix[prefixIndex]
+                prefixIndex += 1
+                return byte
+            }
+            return pull()
+        }
+
+        private mutating func nextUTF8() -> Character? {
+            guard let first = nextByte() else {
+                finished = true
+                return nil
+            }
+            if first < 0x80 {
+                return Character(Unicode.Scalar(first))
+            }
+            let length: Int
+            var value: UInt32
+            if first & 0xE0 == 0xC0 {
+                length = 2
+                value = UInt32(first & 0x1F)
+            } else if first & 0xF0 == 0xE0 {
+                length = 3
+                value = UInt32(first & 0x0F)
+            } else if first & 0xF8 == 0xF0 {
+                length = 4
+                value = UInt32(first & 0x07)
+            } else {
+                return Self.replacement
+            }
+            for _ in 1 ..< length {
+                guard let continuation = nextByte(), continuation & 0xC0 == 0x80 else {
+                    return Self.replacement
+                }
+                value = (value << 6) | UInt32(continuation & 0x3F)
+            }
+            guard let scalar = Unicode.Scalar(value) else {
+                return Self.replacement
+            }
+            return Character(scalar)
+        }
+
+        private mutating func nextUTF16(bigEndian: Bool) -> Character? {
+            guard let unit = nextUnit(bigEndian: bigEndian) else {
+                finished = true
+                return nil
+            }
+            if (0xD800 ... 0xDBFF).contains(unit) {
+                guard let low = nextUnit(bigEndian: bigEndian), (0xDC00 ... 0xDFFF).contains(low) else {
+                    return Self.replacement
+                }
+                let value = 0x10000 + (UInt32(unit - 0xD800) << 10) + UInt32(low - 0xDC00)
+                guard let scalar = Unicode.Scalar(value) else {
+                    return Self.replacement
+                }
+                return Character(scalar)
+            }
+            guard let scalar = Unicode.Scalar(unit) else {
+                return Self.replacement
+            }
+            return Character(scalar)
+        }
+
+        private mutating func nextUnit(bigEndian: Bool) -> UInt16? {
+            guard let high = nextByte(), let low = nextByte() else {
+                return nil
+            }
+            return bigEndian ? (UInt16(high) << 8 | UInt16(low)) : (UInt16(low) << 8 | UInt16(high))
+        }
+    }
+}
diff --git a/Tests/EncodingTests.swift b/Tests/EncodingTests.swift
index 36a5ddc..61d3db4 100644
--- a/Tests/EncodingTests.swift
+++ b/Tests/EncodingTests.swift
@@ -30,6 +30,20 @@ struct EncodingTests {
         #expect(rootText(littleEndianNode) == "hi")
     }
 
+    @Test("Decodes a UTF-8 byte stream incrementally (multi-byte scalars)")
+    func test_streamingUTF8() throws {
+        let node = try PureXML.parse(pullingBytes: byteSource(Array("<r>café \u{1F600}</r>".utf8)))
+        #expect(rootText(node) == "café \u{1F600}")
+    }
+
+    @Test("Decodes a UTF-16 byte stream incrementally, both byte orders")
+    func test_streamingUTF16() throws {
+        let bigEndianNode = try PureXML.parse(pullingBytes: byteSource(utf16("<r>héllo</r>", bigEndian: true)))
+        #expect(rootText(bigEndianNode) == "héllo")
+        let littleEndianNode = try PureXML.parse(pullingBytes: byteSource(utf16("<r>héllo</r>", bigEndian: false)))
+        #expect(rootText(littleEndianNode) == "héllo")
+    }
+
     @Test("Odd-length UTF-16 input is rejected as malformed")
     func test_malformedUTF16() {
         #expect(throws: PureXML.Parsing.ParseError.malformedEncoding) {
@@ -37,6 +51,15 @@ struct EncodingTests {
         }
     }
 
+    private func byteSource(_ bytes: [UInt8]) -> () -> UInt8? {
+        var index = 0
+        return {
+            guard index < bytes.count else { return nil }
+            defer { index += 1 }
+            return bytes[index]
+        }
+    }
+
     private func utf16(_ string: String, bigEndian: Bool) -> [UInt8] {
         var bytes: [UInt8] = bigEndian ? [0xFE, 0xFF] : [0xFF, 0xFE]
         for unit in string.utf16 {