diff --git a/crates/nu-parser/src/parser.rs b/crates/nu-parser/src/parser.rs
index b62faf8a0b..889c8e7858 100644
--- a/crates/nu-parser/src/parser.rs
+++ b/crates/nu-parser/src/parser.rs
@@ -5103,7 +5103,7 @@ pub fn parse_expression(
 
         let split = name.splitn(2, |x| *x == b'=');
         let split: Vec<_> = split.collect();
-        if split.len() == 2 && !split[0].is_empty() {
+        if !name.starts_with(b"^") && split.len() == 2 && !split[0].is_empty() {
             let point = split[0].len() + 1;
 
             let lhs = parse_string_strict(
diff --git a/tests/shell/pipeline/commands/external.rs b/tests/shell/pipeline/commands/external.rs
index 03c1053615..fd50fceb94 100644
--- a/tests/shell/pipeline/commands/external.rs
+++ b/tests/shell/pipeline/commands/external.rs
@@ -71,6 +71,13 @@ fn correctly_escape_external_arguments() {
     assert_eq!(actual.out, "$0");
 }
 
+#[test]
+fn escape_also_escapes_equals() {
+    let actual = nu!(cwd: ".", r#"^MYFOONAME=MYBARVALUE"#);
+
+    assert!(actual.err.contains("executable was not found"));
+}
+
 #[test]
 fn execute_binary_in_string() {
     let actual = nu!(