diff --git a/src/option.c b/src/option.c
index ce54369..4898e69 100644
--- a/src/option.c
+++ b/src/option.c
@@ -3265,6 +3265,7 @@
 
 static void set_option_default(int, int opt_flags, int compatible);
 static void set_options_default(int opt_flags);
+static void set_string_default_esc(char *name, char_u *val, int escape);
 static char_u *term_bg_default(void);
 static void did_set_option(int opt_idx, int opt_flags, int new_value);
 static char_u *illegal_char(char_u *, int);
@@ -3371,7 +3372,7 @@
 # endif
 #endif
 	    )
-	set_string_default("sh", p);
+	set_string_default_esc("sh", p, TRUE);
 
 #ifdef FEAT_WILDIGN
     /*
@@ -3859,14 +3860,18 @@
 /*
  * Set the Vi-default value of a string option.
  * Used for 'sh', 'backupskip' and 'term'.
+ * When "escape" is TRUE escape spaces with a backslash.
  */
-    void
-set_string_default(char *name, char_u *val)
+    static void
+set_string_default_esc(char *name, char_u *val, int escape)
 {
     char_u	*p;
     int		opt_idx;
 
-    p = vim_strsave(val);
+    if (escape && vim_strchr(val, ' ') != NULL)
+	p = vim_strsave_escaped(val, (char_u *)" ");
+    else
+	p = vim_strsave(val);
     if (p != NULL)		/* we don't want a NULL */
     {
 	opt_idx = findoption((char_u *)name);
@@ -3880,6 +3885,12 @@
     }
 }
 
+    void
+set_string_default(char *name, char_u *val)
+{
+    set_string_default_esc(name, val, FALSE);
+}
+
 /*
  * Set the Vi-default value of a number option.
  * Used for 'lines' and 'columns'.
diff --git a/src/testdir/test_startup.vim b/src/testdir/test_startup.vim
index 6f67bfc..42e4896 100644
--- a/src/testdir/test_startup.vim
+++ b/src/testdir/test_startup.vim
@@ -226,6 +226,20 @@
   call delete('Xtestout')
 endfunc
 
+func Test_set_shell()
+  let after = [
+	\ 'call writefile([&shell], "Xtestout")',
+	\ 'quit!',
+	\ ]
+  let $SHELL = '/bin/with space/sh'
+  if RunVimPiped([], after, '', '')
+    let lines = readfile('Xtestout')
+    " MS-Windows adds a space after the word
+    call assert_equal('/bin/with\ space/sh', lines[0])
+  endif
+  call delete('Xtestout')
+endfunc
+
 func Test_progpath()
   " Tests normally run with "./vim" or "../vim", these must have been expanded
   " to a full path.
diff --git a/src/version.c b/src/version.c
index 5704074..69ba3f5 100644
--- a/src/version.c
+++ b/src/version.c
@@ -772,6 +772,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    1455,
+/**/
     1454,
 /**/
     1453,