diff --git a/lib/internal/streams/lazy_transform.js b/lib/internal/streams/lazy_transform.js
index 204ad456cd64b3..ab5746ce6a4cf8 100644
--- a/lib/internal/streams/lazy_transform.js
+++ b/lib/internal/streams/lazy_transform.js
@@ -23,11 +23,6 @@ function makeGetter(name) {
   return function() {
     stream.Transform.call(this, this._options);
     this._writableState.decodeStrings = false;
-
-    if (!this._options || !this._options.defaultEncoding) {
-      this._writableState.defaultEncoding = 'buffer';  // TODO(tniessen): remove
-    }
-
     return this[name];
   };
 }
diff --git a/test/parallel/test-crypto.js b/test/parallel/test-crypto.js
index a8ceb169de2b3d..8350401ba93707 100644
--- a/test/parallel/test-crypto.js
+++ b/test/parallel/test-crypto.js
@@ -298,6 +298,9 @@ function testEncoding(options, assertionHash) {
   let hashValue = '';
 
   hash.on('data', (data) => {
+    // The defaultEncoding has no effect on the hash value. It only affects data
+    // consumed by the Hash transform stream.
+    assert(Buffer.isBuffer(data));
     hashValue += data.toString('hex');
   });
 
@@ -307,6 +310,8 @@ function testEncoding(options, assertionHash) {
 
   hash.write('öäü');
   hash.end();
+
+  assert.strictEqual(hash._writableState.defaultEncoding, options?.defaultEncoding ?? 'utf8');
 }
 
 // Hash of "öäü" in utf8 format