diff --git a/shell/ash.c b/shell/ash.c
index 13eeab34b..da9c95045 100644
--- a/shell/ash.c
+++ b/shell/ash.c
@@ -11500,7 +11500,7 @@ parsesub: {
 	 || (c != '(' && c != '{' && !is_name(c) && !is_special(c))
 	) {
 #if ENABLE_ASH_BASH_COMPAT
-		if (c == '\'')
+		if (syntax != DQSYNTAX && c == '\'')
 			bash_dollar_squote = 1;
 		else
 #endif
diff --git a/shell/ash_test/ash-heredoc/heredoc4.right b/shell/ash_test/ash-heredoc/heredoc4.right
new file mode 100644
index 000000000..371b092e2
--- /dev/null
+++ b/shell/ash_test/ash-heredoc/heredoc4.right
@@ -0,0 +1 @@
+'$'
diff --git a/shell/ash_test/ash-heredoc/heredoc4.tests b/shell/ash_test/ash-heredoc/heredoc4.tests
new file mode 100755
index 000000000..642ddb324
--- /dev/null
+++ b/shell/ash_test/ash-heredoc/heredoc4.tests
@@ -0,0 +1,3 @@
+cat <<EOF
+'$'
+EOF
diff --git a/shell/ash_test/ash-quoting/dollar_squote_bash1.right b/shell/ash_test/ash-quoting/dollar_squote_bash1.right
index 57536b1d9..9f4e25efa 100644
--- a/shell/ash_test/ash-quoting/dollar_squote_bash1.right
+++ b/shell/ash_test/ash-quoting/dollar_squote_bash1.right
@@ -1,4 +1,5 @@
 a	b
+$'a\tb'
 a
 b c
 def
diff --git a/shell/ash_test/ash-quoting/dollar_squote_bash1.tests b/shell/ash_test/ash-quoting/dollar_squote_bash1.tests
index 93a56cac3..6fc411b93 100755
--- a/shell/ash_test/ash-quoting/dollar_squote_bash1.tests
+++ b/shell/ash_test/ash-quoting/dollar_squote_bash1.tests
@@ -1,4 +1,5 @@
 echo $'a\tb'
+echo "$'a\tb'"
 echo $'a\nb' $'c\nd''ef'
 echo $'a\'b' $'c\"d' $'e\\f'
 echo $'a\63b' $'c\063b' $'e\0633f'