diff --git a/index.js b/index.js
index c22cc6d..a613dc3 100644
--- a/index.js
+++ b/index.js
@@ -23,21 +23,20 @@ exports.parse = function (s, env) {
                 ;
             }
             else if (/^"/.test(s)) {
-                return interpolate(s.replace(/^"|"$/g, ''))
+                return interpolate(s.replace(/^"|"$/g, ''));
             }
             else return interpolate(s);
         })
     ;
     
-    function getVar (_, x) {
-        return String(env[x])
-    }
-    
     function interpolate (s) {
         return s
             .replace(/\\([ "'\\$`(){}!#&*|])/g, '$1')
-            .replace(/\$(\w+)/g, getVar)
-            .replace(/\${(\w+)}/g, getVar)
+            .replace(/(^|[^\\])\$(\w+)/g, getVar)
+            .replace(/(^|[^\\])\${(\w+)}/g, getVar)
         ;
     }
+    function getVar (_, pre, key) {
+        return pre + String(env[key]);
+    }
 };
diff --git a/test/env.js b/test/env.js
index 20ff7da..b9f9001 100644
--- a/test/env.js
+++ b/test/env.js
@@ -4,7 +4,7 @@ var parse = require('../').parse;
 test('expand environment variables', function (t) {
     t.same(parse('a $XYZ c', { XYZ: 'b' }), [ 'a', 'b', 'c' ]);
     t.same(parse('a${XYZ}c', { XYZ: 'b' }), [ 'abc' ]);
-    t.same(parse('a${XYZ}c $XYZ', { XYZ: 'b' }), [ 'abcb b' ]);
+    t.same(parse('a${XYZ}c $XYZ', { XYZ: 'b' }), [ 'abc', 'b' ]);
     t.same(parse('"-$X-$Y-"', { X: 'a', Y: 'b' }), [ '-a-b-' ]);
     t.same(parse("'-$X-$Y-'", { X: 'a', Y: 'b' }), [ '-$X-$Y-' ]);
     t.same(parse('qrs"$zzz"wxy', { zzz: 'tuv' }), [ 'qrstuvwxy' ]);