diff --git a/complete.cpp b/complete.cpp
index d38104dd5..4808c4dbd 100644
--- a/complete.cpp
+++ b/complete.cpp
@@ -1712,29 +1712,67 @@ bool completer_t::complete_variable(const wcstring &str, size_t start_offset)
     return res;
 }
 
-/**
-   Search the specified string for the \$ sign. If found, try to
-   complete as an environment variable.
-
-   \return 0 if unable to complete, 1 otherwise
-*/
 bool completer_t::try_complete_variable(const wcstring &str)
 {
-    size_t i = str.size();
-    while (i--)
+    enum {e_unquoted, e_single_quoted, e_double_quoted} mode = e_unquoted;
+    const size_t len = str.size();
+    
+    /* Get the position of the dollar heading a run of valid variable characters. -1 means none. */
+    size_t variable_start = -1;
+    
+    for (size_t in_pos=0; in_pos<len; in_pos++)
     {
-        wchar_t c = str.at(i);
-        if (c == L'$')
+        wchar_t c = str.at(in_pos);
+        if (! wcsvarchr(c))
         {
-            /*      wprintf( L"Var prefix \'%ls\'\n", &cmd[i+1] );*/
-            return this->complete_variable(str, i+1);
+            /* This character cannot be in a variable, reset the dollar */
+            variable_start = -1;
         }
-        if (!isalnum(c) && c != L'_')
+        
+        switch (c)
         {
-            return false;
+            case L'\\':
+                in_pos++;
+                break;
+            
+            case L'$':
+                if (mode == e_unquoted || mode == e_double_quoted)
+                {
+                    variable_start = in_pos;
+                }
+                break;
+            
+            case L'\'':
+                if (mode == e_single_quoted)
+                {
+                    mode = e_unquoted;
+                }
+                else if (mode == e_unquoted)
+                {
+                    mode = e_single_quoted;
+                }
+                break;
+            
+            case L'"':
+                if (mode == e_double_quoted)
+                {
+                    mode = e_unquoted;
+                }
+                else if (mode == e_unquoted)
+                {
+                    mode = e_double_quoted;
+                }
+                break;
         }
     }
-    return false;
+    
+    /* Now complete if we have a variable start that's also not the last character */
+    bool result = false;
+    if (variable_start != static_cast<size_t>(-1) && variable_start + 1 < len)
+    {
+        result = this->complete_variable(str, variable_start + 1);
+    }
+    return result;
 }
 
 /**
@@ -1822,7 +1860,7 @@ void complete(const wcstring &cmd_with_subcmds, std::vector<completion_t> &comps
     bool use_function = 1;
     bool use_builtin = 1;
 
-    //  debug( 1, L"Complete '%ls'", cmd );
+      //debug( 1, L"Complete '%ls'", cmd.c_str() );
 
     const wchar_t *cmd_cstr = cmd.c_str();
     const wchar_t *tok_begin = NULL, *prev_begin = NULL, *prev_end = NULL;
@@ -1832,9 +1870,11 @@ void complete(const wcstring &cmd_with_subcmds, std::vector<completion_t> &comps
      If we are completing a variable name or a tilde expansion user
      name, we do that and return. No need for any other completions.
      */
-
     const wcstring current_token = tok_begin;
 
+    /* Get the quote type of the current token */
+    
+
     if (!done)
     {
         done = completer.try_complete_variable(current_token) || completer.try_complete_user(current_token);
diff --git a/fish_tests.cpp b/fish_tests.cpp
index 13e9d2fa7..984c740be 100644
--- a/fish_tests.cpp
+++ b/fish_tests.cpp
@@ -1535,7 +1535,14 @@ static void test_complete(void)
     complete(L"foobarbaz ", completions, COMPLETION_REQUEST_DEFAULT);
     do_test(completions.size() == 1);
     do_test(completions.at(0).completion == L"qux");
-
+    
+    /* Don't complete variable names in single quotes (#1023) */
+    completions.clear();
+    complete(L"echo '$Foo", completions, COMPLETION_REQUEST_DEFAULT);
+    do_test(completions.empty());
+    completions.clear();
+    complete(L"echo \\$Foo", completions, COMPLETION_REQUEST_DEFAULT);
+    do_test(completions.empty());
 
     complete_set_variable_names(NULL);
 }