diff --git a/vlib/v/gen/cgen.v b/vlib/v/gen/cgen.v
index 0696f612bb..6238774774 100644
--- a/vlib/v/gen/cgen.v
+++ b/vlib/v/gen/cgen.v
@@ -2363,7 +2363,7 @@ fn (g mut Gen) string_inter_literal(node ast.StringInterLiteral) {
 	g.write('_STR("')
 	// Build the string with %
 	for i, val in node.vals {
-		escaped_val := val.replace_each(['"', '\\"', '\r\n', '\\n', '\n', '\\n'])
+		escaped_val := val.replace_each(['"', '\\"', '\r\n', '\\n', '\n', '\\n', '%', '%%'])
 		g.write(escaped_val)
 		if i >= node.exprs.len {
 			continue
diff --git a/vlib/v/tests/inout/string_interp.out b/vlib/v/tests/inout/string_interp.out
new file mode 100644
index 0000000000..ea52e4b808
--- /dev/null
+++ b/vlib/v/tests/inout/string_interp.out
@@ -0,0 +1 @@
+%.*sworldhello
\ No newline at end of file
diff --git a/vlib/v/tests/inout/string_interp.vv b/vlib/v/tests/inout/string_interp.vv
new file mode 100644
index 0000000000..875f0d85be
--- /dev/null
+++ b/vlib/v/tests/inout/string_interp.vv
@@ -0,0 +1,6 @@
+
+fn main() {
+	test := 'hello'
+	hello := 'world'
+    println('%.*s$hello$test')
+}
diff --git a/vlib/v/tests/string_interpolation_test.v b/vlib/v/tests/string_interpolation_test.v
index 809bcc42ed..9d45beb88c 100644
--- a/vlib/v/tests/string_interpolation_test.v
+++ b/vlib/v/tests/string_interpolation_test.v
@@ -55,3 +55,10 @@ fn test_implicit_str() {
 	text := '$i' + '42'
 	assert text == '4242'
 }
+
+fn test_string_interpolation_percent_escaping(){
+	test := 'hello'
+	hello := 'world'
+	x := '%.*s$hello$test |${hello:-30s}|'
+	assert x == '%.*sworldhello |world                         |'
+}