The aim of this paper is to provide a new reading and interpretation of the runic inscription on a silver capsule pendant from Birka which has been dated to the early Viking Age, 775–900 CE. It was found in a female grave and in the runological literature is conventionally known as the Birka amulet. The circumstances of the find are first discussed in order to establish the exact location of the pendant in the grave. This is followed by a discussion of the possible identity of the woman in the grave and the possible location of the amulet on her body. As regards the function of the pendant, it has been determined that it was repurposed from another object in order to serve as a scent box and it was at that time that the runic inscription was carved on the reverse side. Earlier readings and interpretations are then discussed, followed by an analysis of the reading order of the inscription. A new reading based on three separate examinations with stereo microscope is subsequently suggested and illustrated with photographs. To conclude, having established both reading order and reading, a new interpretation is suggested for the entire inscription.