diff --git a/doc/whats-new.rst b/doc/whats-new.rst
index c3383a5648a..97631b4c324 100644
--- a/doc/whats-new.rst
+++ b/doc/whats-new.rst
@@ -35,6 +35,8 @@ Deprecations
 
 Bug fixes
 ~~~~~~~~~
+- Make :py:func:`testing.assert_allclose` work with numpy 2.0 (:issue:`9165`, :pull:`9166`).
+  By `Pontus Lurcock <https://github.com/pont-us>`_.
 
 
 Documentation
diff --git a/xarray/testing/assertions.py b/xarray/testing/assertions.py
index 69885868f83..2a4c17e115a 100644
--- a/xarray/testing/assertions.py
+++ b/xarray/testing/assertions.py
@@ -36,7 +36,7 @@ def wrapper(*args, **kwargs):
 
 def _decode_string_data(data):
     if data.dtype.kind == "S":
-        return np.core.defchararray.decode(data, "utf-8", "replace")
+        return np.char.decode(data, "utf-8", "replace")
     return data
 
 
diff --git a/xarray/tests/test_assertions.py b/xarray/tests/test_assertions.py
index aa0ea46f7db..20b5e163662 100644
--- a/xarray/tests/test_assertions.py
+++ b/xarray/tests/test_assertions.py
@@ -52,6 +52,11 @@ def test_allclose_regression() -> None:
             xr.Dataset({"a": ("x", [0, 2]), "b": ("y", [0, 1])}),
             id="Dataset",
         ),
+        pytest.param(
+            xr.DataArray(np.array("a", dtype="|S1")),
+            xr.DataArray(np.array("b", dtype="|S1")),
+            id="DataArray_with_character_dtype",
+        ),
     ),
 )
 def test_assert_allclose(obj1, obj2) -> None: