diff --git a/crates/nu-parser/src/lex.rs b/crates/nu-parser/src/lex.rs
index f9e75d13f0..471ca08f1a 100644
--- a/crates/nu-parser/src/lex.rs
+++ b/crates/nu-parser/src/lex.rs
@@ -30,7 +30,7 @@ impl Token {
     }
 }
 
-#[derive(Clone, Copy, Debug)]
+#[derive(Clone, Copy, Debug, PartialEq)]
 pub enum BlockKind {
     Paren,
     CurlyBracket,
@@ -94,6 +94,9 @@ 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![];
 
@@ -133,12 +136,18 @@ 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) {
@@ -157,7 +166,12 @@ 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'$'){
+                if c == b'\'' || c == b'"' {
+                    string_interpolation = true;
+                }
+            }
             // We encountered the opening quote of a string literal.
             quote_start = Some(c);
         } else if c == b'[' {
@@ -266,6 +280,7 @@ pub fn lex_item(
         // The non-lite parse trims quotes on both sides, so we add the expected quote so that
         // anyone wanting to consume this partial parse (e.g., completions) will be able to get
         // correct information from the non-lite parse.
+
         return (
             Token {
                 contents: TokenContents::Item,
@@ -273,7 +288,7 @@ pub fn lex_item(
             },
             Some(ParseError::UnexpectedEof(
                 (delim as char).to_string(),
-                Span::new(span.end, span.end),
+                Span::new(span.start, span.end),
             )),
         );
     }