diff --git a/src/ngResource/resource.js b/src/ngResource/resource.js
index 006f3d3799a2..055f089023ad 100644
--- a/src/ngResource/resource.js
+++ b/src/ngResource/resource.js
@@ -387,7 +387,9 @@ angular.module('ngResource', ['ng']).
           val = params.hasOwnProperty(urlParam) ? params[urlParam] : self.defaults[urlParam];
           if (angular.isDefined(val) && val !== null) {
             encodedVal = encodeUriSegment(val);
-            url = url.replace(new RegExp(":" + urlParam + "(\\W|$)", "g"), encodedVal + "$1");
+            url = url.replace(new RegExp(":" + urlParam + "(\\W|$)", "g"), function(match, p1) {
+              return encodedVal + p1;
+            });
           } else {
             url = url.replace(new RegExp("(\/?):" + urlParam + "(\\W|$)", "g"), function(match,
                 leadingSlashes, tail) {
diff --git a/test/ngResource/resourceSpec.js b/test/ngResource/resourceSpec.js
index b23f0ca42bd7..08c27a0f715b 100644
--- a/test/ngResource/resourceSpec.js
+++ b/test/ngResource/resourceSpec.js
@@ -178,9 +178,11 @@ describe("resource", function() {
 
     $httpBackend.expect('GET', '/Path/foo%231').respond('{}');
     $httpBackend.expect('GET', '/Path/doh!@foo?bar=baz%231').respond('{}');
+    $httpBackend.expect('GET', '/Path/herp$').respond('{}');
 
     R.get({a: 'foo#1'});
     R.get({a: 'doh!@foo', bar: 'baz#1'});
+    R.get({a: 'herp$'});
   });