diff --git a/CHANGES.rst b/CHANGES.rst
index 27323b678..a1a443120 100644
--- a/CHANGES.rst
+++ b/CHANGES.rst
@@ -9,6 +9,9 @@
   the ``[supervisorctl]`` section or ``[ctlplugin:x]`` sections to be in
   included files.  Patch by François Granade.
 
+- Parsing ``environment=`` has been improved to allow escaped quotes
+  inside quotes and quoted empty values. Patch by Stefan Friesel.
+
 4.2.5 (2022-12-23)
 ------------------
 
diff --git a/supervisor/datatypes.py b/supervisor/datatypes.py
index 24932d95e..a67d0df9b 100644
--- a/supervisor/datatypes.py
+++ b/supervisor/datatypes.py
@@ -68,7 +68,7 @@ def dict_of_key_value_pairs(arg):
     """ parse KEY=val,KEY2=val2 into {'KEY':'val', 'KEY2':'val2'}
         Quotes can be used to allow commas in the value
     """
-    lexer = shlex.shlex(str(arg))
+    lexer = shlex.shlex(str(arg), posix=True)
     lexer.wordchars += '/.+-():'
 
     tokens = list(lexer)
@@ -81,7 +81,7 @@ def dict_of_key_value_pairs(arg):
         if len(k_eq_v) != 3 or k_eq_v[1] != '=':
             raise ValueError(
                 "Unexpected end of key/value pairs in value '%s'" % arg)
-        D[k_eq_v[0]] = k_eq_v[2].strip('\'"')
+        D[k_eq_v[0]] = k_eq_v[2]
         i += 4
     return D
 
diff --git a/supervisor/tests/test_datatypes.py b/supervisor/tests/test_datatypes.py
index e2801310d..2e1a15b80 100644
--- a/supervisor/tests/test_datatypes.py
+++ b/supervisor/tests/test_datatypes.py
@@ -164,6 +164,11 @@ def test_handles_newlines_inside_quotes(self):
         expected = {'foo': 'a\nb\nc'}
         self.assertEqual(actual, expected)
 
+    def test_handles_quotes_inside_quotes(self):
+        actual = datatypes.dict_of_key_value_pairs('foo="\'\\""')
+        expected = {'foo': '\'"'}
+        self.assertEqual(actual, expected)
+
     def test_handles_empty_inside_quotes(self):
         actual = datatypes.dict_of_key_value_pairs('foo=""')
         expected = {'foo': ''}