diff --git a/src/libutil/args.cc b/src/libutil/args.cc
index 5ba1e5c55..4359c5e8e 100644
--- a/src/libutil/args.cc
+++ b/src/libutil/args.cc
@@ -189,12 +189,40 @@ void ParseQuoted::operator()(std::shared_ptr<Parser> &state, Strings & r) {
         throw Error("unterminated quoted string in nix shebang");
     }
     switch (remaining[0]) {
+        case ' ':
+            if ((remaining.size() == 3 && remaining[1] == '`' && remaining[2] == '`')
+                || (remaining.size() > 3 && remaining[1] == '`' && remaining[2] == '`' && remaining[3] != '`')) {
+                // exactly two backticks mark the end of a quoted string, but a preceding space is ignored if present.
+                state = std::make_shared<ParseUnquoted>(ParseUnquoted(remaining.substr(3)));
+                r.push_back(acc);
+                return;
+            }
+            else {
+                // just a normal space
+                acc += remaining[0];
+                remaining = remaining.substr(1);
+                return;
+            }
         case '`':
-            if (remaining.size() > 1 && remaining[1] == '`') {
+            // exactly two backticks mark the end of a quoted string
+            if ((remaining.size() == 2 && remaining[1] == '`')
+                || (remaining.size() > 2 && remaining[1] == '`' && remaining[2] != '`')) {
                 state = std::make_shared<ParseUnquoted>(ParseUnquoted(remaining.substr(2)));
                 r.push_back(acc);
                 return;
             }
+
+            // a sequence of at least 3 backticks is one escape-backtick which is ignored, followed by any number of backticks, which are verbatim
+            else if (remaining.size() >= 3 && remaining[1] == '`' && remaining[2] == '`') {
+                // ignore "escape" backtick
+                remaining = remaining.substr(1);
+                // add the rest
+                while (remaining.size() > 0 && remaining[0] == '`') {
+                    acc += '`';
+                    remaining = remaining.substr(1);
+                }
+                return;
+            }
             else {
                 acc += remaining[0];
                 remaining = remaining.substr(1);
@@ -208,7 +236,7 @@ void ParseQuoted::operator()(std::shared_ptr<Parser> &state, Strings & r) {
     assert(false);
 }
 
-static Strings parseShebangContent(std::string_view s) {
+Strings parseShebangContent(std::string_view s) {
     Strings result;
     std::shared_ptr<Parser> parserState(std::make_shared<ParseUnquoted>(ParseUnquoted(s)));
 
diff --git a/src/libutil/args.hh b/src/libutil/args.hh
index 30a44cd10..7af82b178 100644
--- a/src/libutil/args.hh
+++ b/src/libutil/args.hh
@@ -409,4 +409,6 @@ public:
     virtual void add(std::string completion, std::string description = "") = 0;
 };
 
+Strings parseShebangContent(std::string_view s);
+
 }
diff --git a/src/libutil/tests/args.cc b/src/libutil/tests/args.cc
new file mode 100644
index 000000000..e7a16b0be
--- /dev/null
+++ b/src/libutil/tests/args.cc
@@ -0,0 +1,94 @@
+#include "../args.hh"
+#include <list>
+
+#include <gtest/gtest.h>
+
+namespace nix {
+
+    TEST(parseShebangContent, basic) {
+        std::list<std::string> r = parseShebangContent("hi there");
+        ASSERT_EQ(r.size(), 2);
+        auto i = r.begin();
+        ASSERT_EQ(*i++, "hi");
+        ASSERT_EQ(*i++, "there");
+    }
+
+    TEST(parseShebangContent, empty) {
+        std::list<std::string> r = parseShebangContent("");
+        ASSERT_EQ(r.size(), 0);
+    }
+
+    TEST(parseShebangContent, doubleBacktick) {
+        std::list<std::string> r = parseShebangContent("``\"ain't that nice\"``");
+        ASSERT_EQ(r.size(), 1);
+        auto i = r.begin();
+        ASSERT_EQ(*i++, "\"ain't that nice\"");
+    }
+
+    TEST(parseShebangContent, doubleBacktickEmpty) {
+        std::list<std::string> r = parseShebangContent("````");
+        ASSERT_EQ(r.size(), 1);
+        auto i = r.begin();
+        ASSERT_EQ(*i++, "");
+    }
+
+    TEST(parseShebangContent, doubleBacktickMarkdownInlineCode) {
+        std::list<std::string> r = parseShebangContent("``# I'm markdown section about `coolFunction` ``");
+        ASSERT_EQ(r.size(), 1);
+        auto i = r.begin();
+        ASSERT_EQ(*i++, "# I'm markdown section about `coolFunction`");
+    }
+
+    TEST(parseShebangContent, doubleBacktickMarkdownCodeBlockNaive) {
+        std::list<std::string> r = parseShebangContent("``Example 1\n```nix\na: a\n``` ``");
+        auto i = r.begin();
+        ASSERT_EQ(r.size(), 1);
+        ASSERT_EQ(*i++, "Example 1\n``nix\na: a\n``");
+    }
+
+    TEST(parseShebangContent, doubleBacktickMarkdownCodeBlockCorrect) {
+        std::list<std::string> r = parseShebangContent("``Example 1\n````nix\na: a\n```` ``");
+        auto i = r.begin();
+        ASSERT_EQ(r.size(), 1);
+        ASSERT_EQ(*i++, "Example 1\n```nix\na: a\n```");
+    }
+
+    TEST(parseShebangContent, doubleBacktickMarkdownCodeBlock2) {
+        std::list<std::string> r = parseShebangContent("``Example 1\n````nix\na: a\n````\nExample 2\n````nix\na: a\n```` ``");
+        auto i = r.begin();
+        ASSERT_EQ(r.size(), 1);
+        ASSERT_EQ(*i++, "Example 1\n```nix\na: a\n```\nExample 2\n```nix\na: a\n```");
+    }
+
+    TEST(parseShebangContent, singleBacktickInDoubleBacktickQuotes) {
+        std::list<std::string> r = parseShebangContent("``` ``");
+        auto i = r.begin();
+        ASSERT_EQ(r.size(), 1);
+        ASSERT_EQ(*i++, "`");
+    }
+
+    TEST(parseShebangContent, singleBacktickAndSpaceInDoubleBacktickQuotes) {
+        std::list<std::string> r = parseShebangContent("```  ``");
+        auto i = r.begin();
+        ASSERT_EQ(r.size(), 1);
+        ASSERT_EQ(*i++, "` ");
+    }
+
+    TEST(parseShebangContent, doubleBacktickInDoubleBacktickQuotes) {
+        std::list<std::string> r = parseShebangContent("````` ``");
+        auto i = r.begin();
+        ASSERT_EQ(r.size(), 1);
+        ASSERT_EQ(*i++, "``");
+    }
+
+    TEST(parseShebangContent, increasingQuotes) {
+        std::list<std::string> r = parseShebangContent("```` ``` `` ````` `` `````` ``");
+        auto i = r.begin();
+        ASSERT_EQ(r.size(), 4);
+        ASSERT_EQ(*i++, "");
+        ASSERT_EQ(*i++, "`");
+        ASSERT_EQ(*i++, "``");
+        ASSERT_EQ(*i++, "```");
+    }
+
+}
\ No newline at end of file
diff --git a/src/nix/nix.md b/src/nix/nix.md
index 5bf82a8bf..eb150f03b 100644
--- a/src/nix/nix.md
+++ b/src/nix/nix.md
@@ -243,7 +243,9 @@ in [`nix help-stores`](./nix3-help-stores.md).
 The `nix` command can be used as a `#!` interpreter.
 Arguments to Nix can be passed on subsequent lines in the script.
 
-Verbatim strings may be passed in double backtick (```` `` ````) quotes.
+Verbatim strings may be passed in double backtick (```` `` ````) quotes. <!-- that's markdown for two backticks in inline code. -->
+Sequences of _n_ backticks of 3 or longer are parsed as _n-1_ literal backticks.
+A single space before the closing ```` `` ```` is ignored if present.
 
 `--file` and `--expr` resolve relative paths based on the script location.