diff --git a/src/tox/config/__init__.py b/src/tox/config/__init__.py
index 1b392cf53..319c93aea 100644
--- a/src/tox/config/__init__.py
+++ b/src/tox/config/__init__.py
@@ -1944,8 +1944,11 @@ def processcommand(cls, reader, command, replace=True):
                     continue
 
                 new_arg = ""
+                has_dual_quote = "''" in word
                 new_word = reader._replace(word, unquote_path=False)
                 new_word = reader._replace(new_word, unquote_path=False)
+                if not has_dual_quote:
+                    new_word = new_word.replace("''", "'")
                 new_word = new_word.replace("\\{", "{").replace("\\}", "}")
                 new_arg += new_word
                 newcommand += new_arg
@@ -1980,8 +1983,14 @@ def word_has_ended():
                     and ps.word
                     and ps.word[-1] not in string.whitespace
                 )
-                or (cur_char == "{" and ps.depth == 0 and not ps.word.endswith("\\"))
-                or (ps.depth == 0 and ps.word and ps.word[-1] == "}")
+                or (
+                    cur_char == "{"
+                    and ps.depth == 0
+                    and not ps.word.endswith("\\")
+                    and ps.word != "'"
+                )
+                or (ps.depth == 0 and ps.word and ps.word[-1] == "}" and peek() != "'")
+                or (ps.depth == 0 and ps.word and ps.word[-2:] == "}'")
                 or (cur_char not in string.whitespace and ps.word and ps.word.strip() == "")
             )
 
@@ -1995,6 +2004,12 @@ def yield_if_word_ended():
             if word_has_ended():
                 yield_this_word()
 
+        def peek():
+            try:
+                return self.command[i + 1]
+            except IndexError:
+                return ""
+
         def accumulate():
             ps.word += cur_char
 
@@ -2004,7 +2019,7 @@ def push_substitution():
         def pop_substitution():
             ps.depth -= 1
 
-        for cur_char in self.command:
+        for i, cur_char in enumerate(self.command):
             if cur_char in string.whitespace:
                 if ps.depth == 0:
                     yield_if_word_ended()
@@ -2016,6 +2031,12 @@ def pop_substitution():
             elif cur_char == "}":
                 accumulate()
                 pop_substitution()
+            elif cur_char == "'":
+                if ps.depth == 0 and ps.word and ps.word[-1] == "}":
+                    accumulate()
+                else:
+                    yield_if_word_ended()
+                    accumulate()
             else:
                 yield_if_word_ended()
                 accumulate()
diff --git a/tests/unit/config/test_config.py b/tests/unit/config/test_config.py
index 3b1b86422..445649886 100644
--- a/tests/unit/config/test_config.py
+++ b/tests/unit/config/test_config.py
@@ -526,7 +526,7 @@ def test_command_substitution_pound(self, tmpdir, newconfig):
             toxworkdir = {toxinidir}/.tox#dir
 
             [testenv:py27]
-            commands = {envpython} {toxworkdir}
+            commands = '{envpython}' '{toxworkdir}'/'foo#bar'
         """,
         )
 
@@ -541,7 +541,7 @@ def test_command_substitution_pound(self, tmpdir, newconfig):
 
         assert envconfig.commands[0] == [
             str(envconfig.envbindir.join("python")),
-            str(config.toxworkdir.realpath()),
+            str(config.toxworkdir.realpath().join("foo#bar")),
         ]
 
     def test_command_substitution_whitespace(self, tmpdir, newconfig):
@@ -552,7 +552,7 @@ def test_command_substitution_whitespace(self, tmpdir, newconfig):
             toxworkdir = {toxinidir}/.tox dir
 
             [testenv:py27]
-            commands = {envpython} {toxworkdir}
+            commands = '{envpython}' '{toxworkdir}'/'foo bar'
         """,
         )
 
@@ -567,7 +567,7 @@ def test_command_substitution_whitespace(self, tmpdir, newconfig):
 
         assert envconfig.commands[0] == [
             str(envconfig.envbindir.join("python")),
-            str(config.toxworkdir.realpath()),
+            str(config.toxworkdir.realpath().join("foo bar")),
         ]