diff --git a/crates/nu-parser/src/lex.rs b/crates/nu-parser/src/lex.rs
index bad9e94a10..d1d4663248 100644
--- a/crates/nu-parser/src/lex.rs
+++ b/crates/nu-parser/src/lex.rs
@@ -31,7 +31,7 @@ impl Token {
     }
 }
 
-#[derive(Clone, Copy, Debug)]
+#[derive(Clone, Copy, Debug, PartialEq)]
 pub enum BlockKind {
     Paren,
     CurlyBracket,
@@ -101,6 +101,9 @@ pub fn lex_item(
 
     let token_start = *curr_offset;
 
+    let mut string_interpolation = false;
+    let mut inter_bracket = false;
+
     // This Vec tracks paired delimiters
     let mut block_level: Vec<BlockKind> = vec![];
 
@@ -140,12 +143,18 @@ pub fn lex_item(
                         )),
                     );
                 }
+            } else if c == b'(' && string_interpolation {
+                inter_bracket = true;
+            } else if c == b')' && string_interpolation {
+                inter_bracket = false;
             }
+
             // If we encountered the closing quote character for the current
             // string, we're done with the current string.
-            if c == start {
+            if c == start && (!string_interpolation || !inter_bracket) {
                 // Also need to check to make sure we aren't escaped
                 quote_start = None;
+                string_interpolation = false;
             }
         } else if c == b'#' {
             if is_item_terminator(&block_level, c, additional_whitespace, special_tokens) {
@@ -164,7 +173,13 @@ pub fn lex_item(
         } else if is_special_item(&block_level, c, special_tokens) && token_start == *curr_offset {
             *curr_offset += 1;
             break;
-        } else if c == b'\'' || c == b'"' || c == b'`' {
+        } else if (c == b'\'' || c == b'"' || c == b'`') && quote_start.is_none() {
+            if *curr_offset > 0
+                && input.get(*curr_offset - 1) == Some(&b'$')
+                && (c == b'\'' || c == b'"')
+            {
+                string_interpolation = true;
+            }
             // We encountered the opening quote of a string literal.
             quote_start = Some(c);
         } else if c == b'[' {
diff --git a/crates/nu-parser/tests/test_lex.rs b/crates/nu-parser/tests/test_lex.rs
index 07470a310e..eec7b14b43 100644
--- a/crates/nu-parser/tests/test_lex.rs
+++ b/crates/nu-parser/tests/test_lex.rs
@@ -187,6 +187,13 @@ fn lex_incomplete_quote() {
     assert!(matches!(err, ParseError::UnexpectedEof(v, _) if v == "'"));
 }
 
+#[test]
+fn lex_odd_string_interpolations() {
+    let file = b"$\"('\"')\"";
+    let output = lex(file, 0, &[], &[], true);
+    assert!(output.1.is_none());
+}
+
 #[test]
 fn lex_comments_no_space() {
     // test for parses that contain tokens that normally introduce comments