diff --git a/plugin/src/functionalTest/kotlin/com/ryandens/javaagent/JavaagentPluginFunctionalTest.kt b/plugin/src/functionalTest/kotlin/com/ryandens/javaagent/JavaagentPluginFunctionalTest.kt
index ef8adb94..d0bc56ce 100644
--- a/plugin/src/functionalTest/kotlin/com/ryandens/javaagent/JavaagentPluginFunctionalTest.kt
+++ b/plugin/src/functionalTest/kotlin/com/ryandens/javaagent/JavaagentPluginFunctionalTest.kt
@@ -163,8 +163,10 @@ class JavaagentPluginFunctionalTest {
             val expectedWindowsDefaultJvmOpts = """set DEFAULT_JVM_OPTS="-javaagent:%APP_HOME%\agent-libs\simple-agent.jar" "-Xmx256m""""
             assertTrue(applicationDistributionScript.readText().contains(expectedWindowsDefaultJvmOpts))
         } else {
+            // Each option is its own backslash-escaped quoted token inside the outer-quoted value, so the
+            // launcher never word-splits an option (including ones whose value has a space) -- see issue #95.
             val expectedDefaultJavaOpts = """
-DEFAULT_JVM_OPTS="-javaagent:${"$"}APP_HOME/agent-libs/simple-agent.jar -Xmx256m"
+DEFAULT_JVM_OPTS="\"-javaagent:${"$"}APP_HOME/agent-libs/simple-agent.jar\" \"-Xmx256m\""
 """
             assertTrue(applicationDistributionScript.readText().contains(expectedDefaultJavaOpts))
         }
@@ -186,6 +188,29 @@ DEFAULT_JVM_OPTS="-javaagent:${"$"}APP_HOME/agent-libs/simple-agent.jar -Xmx256m
         assertTrue(ccResult.output.contains("Reusing configuration cache."))
     }
 
+    @Test fun `preserves applicationDefaultJvmArgs containing spaces in application distribution`() {
+        // Regression test for https://github.com/ryandens/javaagent-gradle-plugin/issues/95: applying the
+        // plugin must not drop or mangle the JVM args a consumer configures via `applicationDefaultJvmArgs`.
+        // A value containing a space (`-Dgreeting=hello world`) is the sharp edge: the generated start script
+        // must keep each option as its own quoted token so the shell does not word-split "hello world" into
+        // two arguments. HelloWorld echoes the `greeting` system property back so we can assert end-to-end
+        // that the argument actually reaches the JVM intact.
+        val dependencies = """
+            javaagent project(':simple-agent')
+        """
+
+        createJavaagentProject(dependencies, applicationDefaultJvmArgs = "['-Dgreeting=hello world', '-Xmx256m']")
+        val result = runBuild(listOf("build", "installDist", "execStartScript"))
+
+        // the agent is still attached
+        assertTrue(result.output.contains("Hello from my simple agent!"))
+        // and the space-containing default JVM arg survived intact rather than being word-split
+        assertTrue(
+            result.output.contains("greeting=[hello world]"),
+            "expected the space-containing applicationDefaultJvmArg to reach the JVM as a single argument, but the run output was:\n${result.output}",
+        )
+    }
+
     @Test fun `can handle upgrade of agent with build cache`() {
         createJavaagentProject(
             """
@@ -224,7 +249,9 @@ DEFAULT_JVM_OPTS="-javaagent:${"$"}APP_HOME/agent-libs/simple-agent.jar -Xmx256m
         if (isWindows) {
             assertTrue(applicationDistributionScript.readText().contains("""set DEFAULT_JVM_OPTS="-Xmx256m""""))
         } else {
-            assertTrue(applicationDistributionScript.readText().contains("""DEFAULT_JVM_OPTS="-Xmx256m"""))
+            // With no agents, the placeholder token is stripped but the remaining option keeps its own
+            // backslash-escaped quotes inside the outer-quoted value: DEFAULT_JVM_OPTS="\"-Xmx256m\""
+            assertTrue(applicationDistributionScript.readText().contains("DEFAULT_JVM_OPTS=\"\\\"-Xmx256m\\\"\""))
         }
 
         assertFalse(
@@ -236,7 +263,10 @@ DEFAULT_JVM_OPTS="-javaagent:${"$"}APP_HOME/agent-libs/simple-agent.jar -Xmx256m
         assertTrue(result.output.contains("Hello World!"))
     }
 
-    private fun createJavaagentProject(dependencies: String) {
+    private fun createJavaagentProject(
+        dependencies: String,
+        applicationDefaultJvmArgs: String = "['-Xmx256m']",
+    ) {
         val helloWorldDir = File(functionalTestDir, "hello-world")
         Paths.get("src", "functionalTest", "resources", "hello-world-project").toFile().copyRecursively(helloWorldDir)
         val simpleAgentTestDir = File(functionalTestDir, "simple-agent")
@@ -288,7 +318,7 @@ DEFAULT_JVM_OPTS="-javaagent:${"$"}APP_HOME/agent-libs/simple-agent.jar -Xmx256m
                 
                 application {
                     mainClass = 'com.ryandens.HelloWorld'
-                    applicationDefaultJvmArgs = ['-Xmx256m']
+                    applicationDefaultJvmArgs = $applicationDefaultJvmArgs
                 }
                 
                 run {
diff --git a/plugin/src/functionalTest/resources/hello-world-project/src/main/java/com/ryandens/HelloWorld.java b/plugin/src/functionalTest/resources/hello-world-project/src/main/java/com/ryandens/HelloWorld.java
index e1a04c65..b37e9d0a 100644
--- a/plugin/src/functionalTest/resources/hello-world-project/src/main/java/com/ryandens/HelloWorld.java
+++ b/plugin/src/functionalTest/resources/hello-world-project/src/main/java/com/ryandens/HelloWorld.java
@@ -5,5 +5,11 @@ public final class HelloWorld {
 
     public static void main(final String[] args) {
         System.out.println("Hello World!");
+        // Echo a system property so functional tests can verify that JVM args configured via
+        // `applicationDefaultJvmArgs` are actually applied at runtime and not dropped/mangled by the plugin.
+        final String greeting = System.getProperty("greeting");
+        if (greeting != null) {
+            System.out.println("greeting=[" + greeting + "]");
+        }
     }
-}
\ No newline at end of file
+}
diff --git a/plugin/src/main/kotlin/com/ryandens/javaagent/JavaagentAwareStartScriptGenerator.kt b/plugin/src/main/kotlin/com/ryandens/javaagent/JavaagentAwareStartScriptGenerator.kt
index 5f517d7c..8a51619a 100644
--- a/plugin/src/main/kotlin/com/ryandens/javaagent/JavaagentAwareStartScriptGenerator.kt
+++ b/plugin/src/main/kotlin/com/ryandens/javaagent/JavaagentAwareStartScriptGenerator.kt
@@ -82,12 +82,16 @@ class JavaagentAwareStartScriptGenerator(
             val files = javaagentFiles.get()
             val replace =
                 if (files.isEmpty()) {
-                    // Remove the placeholder opt when there are no agents. On Windows each opt is its own quoted token
-                    // (`"-javaagent:...PLACEHOLDER.jar" "-Xmx256m"`), so the surrounding quotes and trailing space must
-                    // be stripped too; on Unix the opts are collapsed into a single quoted string
-                    // (`"-javaagent:...PLACEHOLDER.jar -Xmx256m"`), so only the unquoted placeholder and its trailing
-                    // space are removed. The trailing-space variants run first to avoid leaving a dangling separator.
+                    // Remove the placeholder opt when there are no agents. Each opt is its own quoted token: on Unix
+                    // the quotes are backslash-escaped inside the outer-quoted value
+                    // (`"\"-javaagent:...PLACEHOLDER.jar\" \"-Xmx256m\""`), on Windows they are literal
+                    // (`"-javaagent:...PLACEHOLDER.jar" "-Xmx256m"`). Strip the placeholder token together with its
+                    // surrounding quotes and trailing separator. The trailing-space variants run first to avoid
+                    // leaving a dangling separator; the escaped variants run before the bare ones so the leading `\`
+                    // is not orphaned.
                     str
+                        .replace("\\\"-javaagent:COM_RYANDENS_JAVAAGENTS_PLACEHOLDER.jar\\\" ", "")
+                        .replace("\\\"-javaagent:COM_RYANDENS_JAVAAGENTS_PLACEHOLDER.jar\\\"", "")
                         .replace("\"-javaagent:COM_RYANDENS_JAVAAGENTS_PLACEHOLDER.jar\" ", "")
                         .replace("\"-javaagent:COM_RYANDENS_JAVAAGENTS_PLACEHOLDER.jar\"", "")
                         .replace("-javaagent:COM_RYANDENS_JAVAAGENTS_PLACEHOLDER.jar ", "")
diff --git a/plugin/src/main/kotlin/com/ryandens/javaagent/Platform.kt b/plugin/src/main/kotlin/com/ryandens/javaagent/Platform.kt
index 7d69dac0..81289960 100644
--- a/plugin/src/main/kotlin/com/ryandens/javaagent/Platform.kt
+++ b/plugin/src/main/kotlin/com/ryandens/javaagent/Platform.kt
@@ -12,16 +12,22 @@ enum class Platform(
     val templateBindingFactory: StartScriptTemplateBindingFactory,
     val template: TextResource,
     /**
-     * Separator placed between multiple `-javaagent` options. On Windows each option must remain its own
-     * quoted token (`" "` = close quote, space, open quote); on Unix the options share a single quoted string,
-     * so a plain space suffices.
+     * Separator placed between multiple `-javaagent` options. On both platforms each option must remain its
+     * own quoted token so the launcher never word-splits a path (or any other option) on internal spaces. On
+     * Windows the tokens are literally double-quoted (`" "` = close quote, space, open quote); on Unix the
+     * whole `DEFAULT_JVM_OPTS` value is itself wrapped in double quotes so `$APP_HOME` expands, so the inner
+     * per-option quotes are backslash-escaped (`\" \"` = escaped close quote, space, escaped open quote).
      */
     val agentArgSeparator: String,
     /**
-     * Normalizes the template's rendered `defaultJvmOpts`. On Unix the individually quoted options are
-     * collapsed into a single space-separated string that the shell word-splits back apart when the unquoted
-     * `$DEFAULT_JVM_OPTS` is expanded; on Windows the batch script does not word-split inside quotes, so each
-     * option must stay its own quoted token and the value is left unchanged.
+     * Normalizes the template's rendered `defaultJvmOpts`. On Windows the batch script does not word-split
+     * inside quotes, so each option stays its own literally-quoted token and the value is left unchanged. On
+     * Unix the value is wrapped in an outer pair of double quotes -- required so the embedded `$APP_HOME` in a
+     * `-javaagent:` path is expanded when the assignment runs -- and each option's own double quotes are
+     * backslash-escaped so they survive into the value. That keeps every option a distinct quoted token that
+     * the launcher's `xargs` pass parses back out intact, including options whose value contains spaces (e.g.
+     * `-Dgreeting=hello world`). Collapsing the per-option quotes into a single quoted string would let the
+     * shell word-split those values apart -- see issue #95.
      */
     val defaultJvmOptsMapper: (String) -> String,
 ) {
@@ -31,8 +37,8 @@ enum class Platform(
         "\$APP_HOME",
         StartScriptTemplateBindingFactory.unix(),
         UnixStartScriptGenerator().template,
-        " ",
-        { it.replace("\" \"", " ") },
+        "\\\" \\\"",
+        { "\"" + it.replace("\"", "\\\"") + "\"" },
     ),
     WINDOWS(
         "\r\n",