diff --git a/Lib/json/tool.py b/Lib/json/tool.py
--- a/Lib/json/tool.py
+++ b/Lib/json/tool.py
@@ -13,25 +13,27 @@ Usage::
 import sys
 import json
 
 def main():
     if len(sys.argv) == 1:
         infile = sys.stdin
         outfile = sys.stdout
     elif len(sys.argv) == 2:
-        infile = open(sys.argv[1], 'rb')
+        infile = open(sys.argv[1], 'r')
         outfile = sys.stdout
     elif len(sys.argv) == 3:
-        infile = open(sys.argv[1], 'rb')
-        outfile = open(sys.argv[2], 'wb')
+        infile = open(sys.argv[1], 'r')
+        outfile = open(sys.argv[2], 'w')
     else:
         raise SystemExit(sys.argv[0] + " [infile [outfile]]")
-    try:
-        obj = json.load(infile)
-    except ValueError as e:
-        raise SystemExit(e)
-    json.dump(obj, outfile, sort_keys=True, indent=4)
-    outfile.write('\n')
+    with infile:
+        try:
+            obj = json.load(infile)
+        except ValueError as e:
+            raise SystemExit(e)
+        with outfile as outfile:
+            json.dump(obj, outfile, sort_keys=True, indent=4)
+            outfile.write('\n')
 
 
 if __name__ == '__main__':
     main()
diff --git a/Lib/test/json_tests/test_dump.py b/Lib/test/json_tests/test_dump.py
--- a/Lib/test/json_tests/test_dump.py
+++ b/Lib/test/json_tests/test_dump.py
@@ -1,11 +1,15 @@
+import subprocess
+import sys
+import tempfile
+
 from io import StringIO
+
 from test.json_tests import PyTest, CTest
-
 from test.support import bigmemtest, _1G
 
 class TestDump:
     def test_dump(self):
         sio = StringIO()
         self.json.dump({}, sio)
         self.assertEqual(sio.getvalue(), '{}')
 
@@ -23,16 +27,34 @@ class TestDump:
     # Issue 16228: Crash on encoding resized list
     def test_encode_mutated(self):
         a = [object()] * 10
         def crasher(obj):
             del a[-1]
         self.assertEqual(self.dumps(a, default=crasher),
                  '[null, null, null, null, null]')
 
+    # see issue 16549
+    def test_cmd_line_dump(self):
+        json = '{"distutils":["Doc/distutils", "Lib/distutils",' \
+               '"Lib/test/test_distutils.py"], "json":["Doc/library/json.rst",' \
+               '"Lib/json", "Lib/test/json_tests", "Lib/test/test_json.py"]}'
+        expected = b'{\n    "distutils": [\n        "Doc/distutils", \n        ' \
+                   b'"Lib/distutils", \n        "Lib/test/test_distutils.py"\n    ],' \
+                   b' \n    "json": [\n        "Doc/library/json.rst", \n        ' \
+                   b'"Lib/json", \n        "Lib/test/json_tests", \n        ' \
+                   b'"Lib/test/test_json.py"\n    ]\n}\n'
+        with tempfile.NamedTemporaryFile("w+") as stdin:
+            stdin.write(json)
+            stdin.flush()
+            with subprocess.Popen(
+                (sys.executable, '-m', 'json.tool', stdin.name),
+                stdin=stdin, stdout=subprocess.PIPE) as proc:
+                stdout, stderr = proc.communicate()
+        self.assertEqual(stdout.rstrip(), expected.rstrip())
 
 class TestPyDump(TestDump, PyTest): pass
 
 class TestCDump(TestDump, CTest):
 
     # The size requirement here is hopefully over-estimated (actual
     # memory consumption depending on implementation details, and also
     # system memory management, since this may allocate a lot of