diff --git a/doc/source/whatsnew/v1.1.0.rst b/doc/source/whatsnew/v1.1.0.rst
index c5eb2febe8ae9..70c45acec9f35 100644
--- a/doc/source/whatsnew/v1.1.0.rst
+++ b/doc/source/whatsnew/v1.1.0.rst
@@ -1040,6 +1040,7 @@ I/O
 - Bug in :meth:`read_excel` for ODS files removes 0.0 values (:issue:`27222`)
 - Bug in :meth:`ujson.encode` was raising an `OverflowError` with numbers larger than sys.maxsize (:issue: `34395`)
 - Bug in :meth:`HDFStore.append_to_multiple` was raising a ``ValueError`` when the min_itemsize parameter is set (:issue:`11238`)
+- :meth:`read_json` now could read line-delimited json file from a file url while `lines` and `chunksize` are set.
 
 Plotting
 ^^^^^^^^
diff --git a/pandas/io/json/_json.py b/pandas/io/json/_json.py
index b973553a767ba..ff37c36962aec 100644
--- a/pandas/io/json/_json.py
+++ b/pandas/io/json/_json.py
@@ -1,6 +1,6 @@
 from collections import abc
 import functools
-from io import StringIO
+from io import BytesIO, StringIO
 from itertools import islice
 import os
 from typing import Any, Callable, Optional, Type
@@ -724,6 +724,9 @@ def _get_data_from_filepath(self, filepath_or_buffer):
             self.should_close = True
             self.open_stream = data
 
+        if isinstance(data, BytesIO):
+            data = data.getvalue().decode()
+
         return data
 
     def _combine_lines(self, lines) -> str:
diff --git a/pandas/tests/io/json/data/line_delimited.json b/pandas/tests/io/json/data/line_delimited.json
new file mode 100644
index 0000000000000..be84245329583
--- /dev/null
+++ b/pandas/tests/io/json/data/line_delimited.json
@@ -0,0 +1,3 @@
+    {"a": 1, "b": 2}
+    {"a": 3, "b": 4}
+    {"a": 5, "b": 6}
diff --git a/pandas/tests/io/json/test_readlines.py b/pandas/tests/io/json/test_readlines.py
index 53462eaaada8d..b475fa2c514ff 100644
--- a/pandas/tests/io/json/test_readlines.py
+++ b/pandas/tests/io/json/test_readlines.py
@@ -1,4 +1,5 @@
 from io import StringIO
+from pathlib import Path
 
 import pytest
 
@@ -219,3 +220,18 @@ def test_readjson_nrows_requires_lines():
     msg = "nrows can only be passed if lines=True"
     with pytest.raises(ValueError, match=msg):
         pd.read_json(jsonl, lines=False, nrows=2)
+
+
+def test_readjson_lines_chunks_fileurl(datapath):
+    # GH 27135
+    # Test reading line-format JSON from file url
+    df_list_expected = [
+        pd.DataFrame([[1, 2]], columns=["a", "b"], index=[0]),
+        pd.DataFrame([[3, 4]], columns=["a", "b"], index=[1]),
+        pd.DataFrame([[5, 6]], columns=["a", "b"], index=[2]),
+    ]
+    os_path = datapath("io", "json", "data", "line_delimited.json")
+    file_url = Path(os_path).as_uri()
+    url_reader = pd.read_json(file_url, lines=True, chunksize=1)
+    for index, chuck in enumerate(url_reader):
+        tm.assert_frame_equal(chuck, df_list_expected[index])