diff --git a/docs/config.html b/docs/config.html
index 382b1ec2..fdaa984b 100644
--- a/docs/config.html
+++ b/docs/config.html
@@ -317,5 +317,59 @@ <h2>How to specify as a connection option</h2>
 </ul>
 <p>Please refer to a <a href="config-opt.html">keyword list</a> for details. </p>
 
+<h2>Special characters and escaping in connection strings</h2>
+
+<p>A value that contains characters with a special meaning
+(<code>;</code>, <code>=</code>, spaces or braces) must be escaped.
+It is important to understand that a connection string is processed by
+<b>two independent parsers</b>, each with its own escaping rules.</p>
+
+<h3>1. The psqlODBC connection string</h3>
+
+<p>The driver splits the keyword string on <code>;</code> (the attribute
+delimiter) and on the first <code>=</code> of each attribute. To include one
+of these characters, or a space, in a value, use one of the following:</p>
+
+<ul>
+<li><b>Braces:</b> enclose the whole value in <code>{ }</code>. A braced
+value may contain <code>;</code>, <code>=</code> and spaces. For example
+<b>PWD={my;odd=pass word}</b>. To include a literal closing brace
+<code>}</code> inside a braced value, double it as <code>}}</code>.
+<br />&nbsp;</li>
+
+<li><b>Percent-encoding:</b> outside of braces the value is URL-decoded, so a
+space can be written as <code>+</code> or <code>%20</code>, and an arbitrary
+byte as <code>%<i>XX</i></code> (two hex digits). For example
+<b>PWD=pass+word</b> or <b>PWD=pass%20word</b>.
+<br />&nbsp;</li>
+</ul>
+
+<p>A backslash (<code>\</code>) has <b>no special meaning</b> in the
+psqlODBC connection string itself; it is passed through literally.</p>
+
+<h3>2. The Libpq parameters (pqopt) value</h3>
+
+<p>The <b>Libpq parameters</b> option (see Advanced Options 3/3 above) is
+passed on to libpq and parsed by it as a <a
+href="https://www.postgresql.org/docs/current/libpq-connect.html#LIBPQ-CONNSTRING">conninfo
+string</a>, which has its own, different rules. Within this value libpq
+separates parameters by spaces, so to include a space (or other special
+character) in a libpq parameter value you use libpq's escaping:</p>
+
+<ul>
+<li><b>Backslash:</b> <code>\</code> escapes the following character, e.g.
+<b>sslcert=C:\ my\ folder\ cert</b>.
+<br />&nbsp;</li>
+<li><b>Single quotes:</b> enclose the value in <code>' '</code>, e.g.
+<b>sslcert='C:\my folder\cert'</b>. A literal single quote or backslash
+inside quotes is written as <code>\'</code> and <code>\\</code>.
+<br />&nbsp;</li>
+</ul>
+
+<p>This is why, in the VBA example above, the libpq paths inside the
+<code>D5={...}</code> braces use backslashes: the braces are consumed by the
+psqlODBC parser (layer 1), and the contents are then handed to libpq
+(layer 2). The two layers can therefore both apply to the same value.</p>
+
 </body>
 </html>
diff --git a/test/expected/connstring-escape.out b/test/expected/connstring-escape.out
new file mode 100644
index 00000000..cd91c5d5
--- /dev/null
+++ b/test/expected/connstring-escape.out
@@ -0,0 +1,3 @@
+braces protect semicolon: ok
+libpq backslash escape: ok
+libpq single-quote quoting: ok
diff --git a/test/src/connstring-escape-test.c b/test/src/connstring-escape-test.c
new file mode 100644
index 00000000..44fb22cc
--- /dev/null
+++ b/test/src/connstring-escape-test.c
@@ -0,0 +1,118 @@
+/*
+ * Test escaping of special characters in connection-string values.
+ *
+ * A connection string is processed by two independent parsers with
+ * different escaping rules (see docs/config.html):
+ *
+ *   1. The psqlODBC parser splits on ';' and '=', and uses braces {} to
+ *      protect a value that contains those characters or spaces.
+ *   2. The braced pqopt value is then handed to libpq, whose conninfo
+ *      parser separates parameters by spaces and uses backslash and
+ *      single-quote quoting to embed a space in a value.
+ *
+ * Each case below sets application_name through one of these mechanisms and
+ * reads it back with current_setting() to confirm the special character
+ * survived intact.
+ */
+#include <stdio.h>
+#include <stdlib.h>
+#include <string.h>
+
+#include "common.h"
+
+static void
+check_application_name(const char *label, const char *pqopt_value,
+					   const char *expected)
+{
+	SQLRETURN	rc;
+	SQLHENV		henv = SQL_NULL_HENV;
+	SQLHDBC		hdbc = SQL_NULL_HDBC;
+	SQLHSTMT	hstmt = SQL_NULL_HSTMT;
+	SQLCHAR		outstr[256];
+	SQLSMALLINT	outlen = 0;
+	SQLCHAR		appname[256];
+	SQLLEN		ind = 0;
+	char		connstr[1024];
+
+	/*
+	 * The braces protect the whole libpq value at the psqlODBC layer; the
+	 * caller supplies the libpq-level escaping inside the braces.
+	 */
+	snprintf(connstr, sizeof(connstr),
+			 "DSN=%s;pqopt={application_name=%s}",
+			 get_test_dsn(), pqopt_value);
+
+	rc = SQLAllocHandle(SQL_HANDLE_ENV, SQL_NULL_HANDLE, &henv);
+	if (!SQL_SUCCEEDED(rc))
+	{
+		fprintf(stderr, "SQLAllocHandle(SQL_HANDLE_ENV) failed\n");
+		exit(1);
+	}
+
+	rc = SQLSetEnvAttr(henv, SQL_ATTR_ODBC_VERSION,
+					   (SQLPOINTER) SQL_OV_ODBC3, 0);
+	if (!SQL_SUCCEEDED(rc))
+	{
+		print_diag("SQLSetEnvAttr failed", SQL_HANDLE_ENV, henv);
+		exit(1);
+	}
+
+	rc = SQLAllocHandle(SQL_HANDLE_DBC, henv, &hdbc);
+	if (!SQL_SUCCEEDED(rc))
+	{
+		print_diag("SQLAllocHandle(SQL_HANDLE_DBC) failed",
+				   SQL_HANDLE_ENV, henv);
+		exit(1);
+	}
+
+	rc = SQLDriverConnect(hdbc, NULL, (SQLCHAR *) connstr, SQL_NTS,
+						  outstr, sizeof(outstr), &outlen,
+						  SQL_DRIVER_NOPROMPT);
+	if (!SQL_SUCCEEDED(rc))
+	{
+		print_diag("SQLDriverConnect failed", SQL_HANDLE_DBC, hdbc);
+		exit(1);
+	}
+
+	rc = SQLAllocHandle(SQL_HANDLE_STMT, hdbc, &hstmt);
+	CHECK_CONN_RESULT(rc, "SQLAllocHandle(SQL_HANDLE_STMT) failed", hdbc);
+
+	rc = SQLExecDirect(hstmt,
+					   (SQLCHAR *) "SELECT current_setting('application_name')",
+					   SQL_NTS);
+	CHECK_STMT_RESULT(rc, "SQLExecDirect failed", hstmt);
+
+	rc = SQLFetch(hstmt);
+	CHECK_STMT_RESULT(rc, "SQLFetch failed", hstmt);
+
+	rc = SQLGetData(hstmt, 1, SQL_C_CHAR, appname, sizeof(appname), &ind);
+	CHECK_STMT_RESULT(rc, "SQLGetData failed", hstmt);
+
+	if (strcmp((char *) appname, expected) != 0)
+	{
+		printf("%s: FAILED - expected [%s], got [%s]\n",
+			   label, expected, (char *) appname);
+		exit(1);
+	}
+	printf("%s: ok\n", label);
+
+	SQLFreeHandle(SQL_HANDLE_STMT, hstmt);
+	SQLDisconnect(hdbc);
+	SQLFreeHandle(SQL_HANDLE_DBC, hdbc);
+	SQLFreeHandle(SQL_HANDLE_ENV, henv);
+}
+
+int
+main(void)
+{
+	/* psqlODBC layer: braces protect the ';' attribute delimiter */
+	check_application_name("braces protect semicolon", "a;b", "a;b");
+
+	/* libpq layer: backslash escapes a space inside the value */
+	check_application_name("libpq backslash escape", "my\\ app", "my app");
+
+	/* libpq layer: single quotes quote a value containing a space */
+	check_application_name("libpq single-quote quoting", "'my app'", "my app");
+
+	return 0;
+}
diff --git a/test/tests b/test/tests
index 5074bcad..7331541f 100644
--- a/test/tests
+++ b/test/tests
@@ -65,5 +65,6 @@ TESTBINS = exe/connect-test \
 	exe/interval-overflow-test \
 	exe/conn-settings-test \
 	exe/percent-decode-test \
+	exe/connstring-escape-test \
 	exe/dbms-version-test \
 	exe/surrogate-pair-test