Are you sure those are really spaces, and not null bytes? (Try asking Data::Dumper to dump it.)

If those are null bytes, the file is in UTF-16, and you're reading it as if it were in latin-1. If you're using perl 5.8, you can simply tell Perl that the file is in utf16: binmode($fh, ':encoding(utf-16)'). If you're under 5.6, it's a hair more complicated -- you need to first read in the data, then use Encode to "decode" it from utf-16 to perl's internal format. $useable=decode('utf-16', $encoded);.