diff --git a/git-difftool--helper.sh b/git-difftool--helper.sh
index d806eaef54..69f6bcebcb 100755
--- a/git-difftool--helper.sh
+++ b/git-difftool--helper.sh
@@ -48,11 +48,10 @@ launch_merge_tool () {
 	fi
 
 	if use_ext_cmd; then
-		$GIT_DIFFTOOL_EXTCMD "$LOCAL" "$REMOTE"
+		eval $GIT_DIFFTOOL_EXTCMD '"$LOCAL"' '"$REMOTE"'
 	else
 		run_merge_tool "$merge_tool"
 	fi
-
 }
 
 if ! use_ext_cmd; then
diff --git a/t/t7800-difftool.sh b/t/t7800-difftool.sh
index 69e1c34159..a183f1db4a 100755
--- a/t/t7800-difftool.sh
+++ b/t/t7800-difftool.sh
@@ -235,8 +235,21 @@ test_expect_success 'difftool --extcmd cat' '
 test_expect_success 'difftool -x cat' '
 	diff=$(git difftool --no-prompt -x cat branch) &&
 	test "$diff" = branch"$LF"master
+'
+
+test_expect_success 'difftool --extcmd echo arg1' '
+	diff=$(git difftool --no-prompt --extcmd sh\ -c\ \"echo\ \$1\" branch)
+	test "$diff" = file
+'
 
+test_expect_success 'difftool --extcmd cat arg1' '
+	diff=$(git difftool --no-prompt --extcmd sh\ -c\ \"cat\ \$1\" branch)
+	test "$diff" = master
+'
 
+test_expect_success 'difftool --extcmd cat arg2' '
+	diff=$(git difftool --no-prompt --extcmd sh\ -c\ \"cat\ \$2\" branch)
+	test "$diff" = branch
 '
 
 test_done