diff --git a/changelog/fix_an_error_for_style_encoding.md b/changelog/fix_an_error_for_style_encoding.md
new file mode 100644
index 000000000000..e6985209a63c
--- /dev/null
+++ b/changelog/fix_an_error_for_style_encoding.md
@@ -0,0 +1 @@
+* [#12738](https://github.com/rubocop/rubocop/issues/12738): Fix an error for `Style/Encoding` when magic encoding with mixed case present. ([@koic][])
diff --git a/lib/rubocop/magic_comment.rb b/lib/rubocop/magic_comment.rb
index d5c3843e4b28..7e919e5d8a84 100644
--- a/lib/rubocop/magic_comment.rb
+++ b/lib/rubocop/magic_comment.rb
@@ -268,7 +268,7 @@ def encoding
 
       # Rewrite the comment without a given token type
       def without(type)
-        if @comment.match?(/\A#\s*#{self.class::KEYWORDS[type.to_sym]}/)
+        if @comment.match?(/\A#\s*#{self.class::KEYWORDS[type.to_sym]}/io)
           ''
         else
           @comment
diff --git a/spec/rubocop/cop/style/encoding_spec.rb b/spec/rubocop/cop/style/encoding_spec.rb
index 6b5681d166b2..7be0cdd57923 100644
--- a/spec/rubocop/cop/style/encoding_spec.rb
+++ b/spec/rubocop/cop/style/encoding_spec.rb
@@ -33,6 +33,15 @@ def foo() end
     RUBY
   end
 
+  it 'registers an offense when magic encoding with mixed case present' do
+    expect_offense(<<~RUBY)
+      # Encoding: UTF-8
+      ^^^^^^^^^^^^^^^^^ Unnecessary utf-8 encoding comment.
+    RUBY
+
+    expect_correction('')
+  end
+
   it 'registers an offense when encoding present on 2nd line after shebang' do
     expect_offense(<<~RUBY)
       #!/usr/bin/env ruby