diff --git a/plugins/dotenv/dotenv.plugin.zsh b/plugins/dotenv/dotenv.plugin.zsh
index d12f5b609..f8d4b67d8 100644
--- a/plugins/dotenv/dotenv.plugin.zsh
+++ b/plugins/dotenv/dotenv.plugin.zsh
@@ -143,11 +143,9 @@ _parse_dotenv_content() {
     fi
     ## END: FILTER COMMAND EXPANSION
 
-    # Unquote the value to handle special characters and multiline values
-    value="${(Q)value}"
-
     # Single-quoted values are fully literal and must not participate in expansion.
     if [[ "$raw_value" == \'*\' ]]; then
+      value="${(Q)value}"
       parsed_vars[$key]="$value"
       if [[ "$mode" == "export" ]]; then
         typeset -x "$key"="$value"
@@ -155,6 +153,13 @@ _parse_dotenv_content() {
       continue
     fi
 
+    # Preserve escaped dollars so they remain literal after unquoting.
+    local escaped_dollar_placeholder=$'\001DOTENV_ESCAPED_DOLLAR\001'
+    value="${value//\\\$/$escaped_dollar_placeholder}"
+
+    # Unquote the value to handle special characters and multiline values.
+    value="${(Q)value}"
+
     # Expand previously parsed in-file variables without partial name matches.
     local expanded="" prefix remainder="$value" var_name
     while [[ "$remainder" == *'$'* ]]; do
@@ -179,6 +184,7 @@ _parse_dotenv_content() {
       fi
     done
     value="${expanded}${remainder}"
+    value="${value//$escaped_dollar_placeholder/\$}"
 
     # Store in parsed vars (for in-file expansion)
     parsed_vars[$key]="$value"
diff --git a/plugins/dotenv/tests/basic-parsing.zunit b/plugins/dotenv/tests/basic-parsing.zunit
index 7061cca4b..ef899f706 100644
--- a/plugins/dotenv/tests/basic-parsing.zunit
+++ b/plugins/dotenv/tests/basic-parsing.zunit
@@ -366,3 +366,23 @@ EOF
 
   assert "DOTENV_TEST_VARS" var_same_as "expected_vars"
 }
+
+@test 'parse preserves escaped dollar signs before variable expansion' {
+  > "$fixture" <<'EOF'
+BAR=expanded
+ESCAPED_UNQUOTED=foo\$BAR
+ESCAPED_DOUBLE="foo\$BAR"
+ESCAPED_BRACED="\${BAR}"
+EOF
+
+  expected_vars=(
+    BAR 'expanded'
+    ESCAPED_UNQUOTED 'foo$BAR'
+    ESCAPED_DOUBLE 'foo$BAR'
+    ESCAPED_BRACED '${BAR}'
+  )
+
+  _parse_dotenv_test "$fixture"
+
+  assert "DOTENV_TEST_VARS" var_same_as "expected_vars"
+}