diff --git a/src/dosinst.c b/src/dosinst.c
index ae5517d..e5d1f75 100644
--- a/src/dosinst.c
+++ b/src/dosinst.c
@@ -1197,13 +1197,17 @@
 	fprintf(fd, "  let opt = '-a --binary '\n");
 	fprintf(fd, "  if &diffopt =~ 'icase' | let opt = opt . '-i ' | endif\n");
 	fprintf(fd, "  if &diffopt =~ 'iwhite' | let opt = opt . '-b ' | endif\n");
-	/* Use quotes only when needed, they may cause trouble. */
+	/* Use quotes only when needed, they may cause trouble.
+	 * Always escape "!". */
 	fprintf(fd, "  let arg1 = v:fname_in\n");
 	fprintf(fd, "  if arg1 =~ ' ' | let arg1 = '\"' . arg1 . '\"' | endif\n");
+	fprintf(fd, "  let arg1 = substitute(arg1, '!', '\\!', 'g')\n");
 	fprintf(fd, "  let arg2 = v:fname_new\n");
 	fprintf(fd, "  if arg2 =~ ' ' | let arg2 = '\"' . arg2 . '\"' | endif\n");
+	fprintf(fd, "  let arg2 = substitute(arg2, '!', '\\!', 'g')\n");
 	fprintf(fd, "  let arg3 = v:fname_out\n");
 	fprintf(fd, "  if arg3 =~ ' ' | let arg3 = '\"' . arg3 . '\"' | endif\n");
+	fprintf(fd, "  let arg3 = substitute(arg3, '!', '\\!', 'g')\n");
 
 	/* If the path has a space:  When using cmd.exe (Win NT/2000/XP) put
 	 * quotes around the diff command and rely on the default value of
@@ -1225,6 +1229,7 @@
 	fprintf(fd, "  else\n");
 	fprintf(fd, "    let cmd = $VIMRUNTIME . '\\diff'\n");
 	fprintf(fd, "  endif\n");
+	fprintf(fd, "  let cmd = substitute(cmd, '!', '\\!', 'g')\n");
 	fprintf(fd, "  silent execute '!' . cmd . ' ' . opt . arg1 . ' ' . arg2 . ' > ' . arg3\n");
 	fprintf(fd, "  if exists('l:shxq_sav')\n");
 	fprintf(fd, "    let &shellxquote=l:shxq_sav\n");