diff --git a/e2e/nx/src/run.test.ts b/e2e/nx/src/run.test.ts
index dd8ca216eb55f..0518850a1b2be 100644
--- a/e2e/nx/src/run.test.ts
+++ b/e2e/nx/src/run.test.ts
@@ -60,6 +60,32 @@ describe('Nx Running Tests', () => {
         const output = runCLI(`echo ${proj} ${args}`);
         expect(output).toContain(`ECHO: ${args.replace(/^.*-- /, '')}`);
       });
+
+      it.each([
+        {
+          args: '--test="hello world" "abc def"',
+          result: '--test="hello world" "abc def"',
+        },
+        {
+          args: `--test="hello world" 'abc def'`,
+          result: '--test="hello world" "abc def"',
+        },
+        {
+          args: `--test="hello world" 'abcdef'`,
+          result: '--test="hello world" abcdef',
+        },
+        {
+          args: `--test='hello world' 'abcdef'`,
+          result: '--test="hello world" abcdef',
+        },
+        {
+          args: `"--test='hello world' 'abcdef'"`,
+          result: `--test='hello world' 'abcdef'`,
+        },
+      ])('should forward %args properly with quotes', ({ args, result }) => {
+        const output = runCLI(`echo ${proj} ${args}`);
+        expect(output).toContain(`ECHO: ${result}`);
+      });
     });
 
     it('should execute long running tasks', () => {
diff --git a/packages/nx/bin/init-local.ts b/packages/nx/bin/init-local.ts
index 41a8f02b59fd5..9ec83bca08f1f 100644
--- a/packages/nx/bin/init-local.ts
+++ b/packages/nx/bin/init-local.ts
@@ -81,10 +81,6 @@ export function rewriteTargetsAndProjects(args: string[]) {
   return newArgs;
 }
 
-function wrapIntoQuotesIfNeeded(arg: string) {
-  return arg.indexOf(':') > -1 ? `"${arg}"` : arg;
-}
-
 function isKnownCommand(command: string) {
   const commands = [
     ...Object.keys(
diff --git a/packages/nx/src/executors/run-commands/run-commands.impl.spec.ts b/packages/nx/src/executors/run-commands/run-commands.impl.spec.ts
index 65b79e9f1078c..aa2192f087380 100644
--- a/packages/nx/src/executors/run-commands/run-commands.impl.spec.ts
+++ b/packages/nx/src/executors/run-commands/run-commands.impl.spec.ts
@@ -323,6 +323,56 @@ describe('Run Commands', () => {
         )
       ).toEqual('echo "hello world"');
     });
+
+    it('should interpolate provided values with spaces', () => {
+      expect(
+        interpolateArgsIntoCommand(
+          'echo',
+          {
+            unknownOptions: { hello: 'test 123' },
+            parsedArgs: { hello: 'test 123' },
+          } as any,
+          true
+        )
+      ).toEqual('echo --hello="test 123"'); // should wrap in quotes
+
+      expect(
+        interpolateArgsIntoCommand(
+          'echo',
+          {
+            unknownOptions: { hello: '"test 123"' },
+            parsedArgs: { hello: '"test 123"' },
+          } as any,
+          true
+        )
+      ).toEqual('echo --hello="test 123"'); // should leave double quotes
+
+      expect(
+        interpolateArgsIntoCommand(
+          'echo',
+          {
+            unknownOptions: { hello: "'test 123'" },
+            parsedArgs: { hello: "'test 123'" },
+          } as any,
+          true
+        )
+      ).toEqual("echo --hello='test 123'"); // should leave single quote
+
+      expect(
+        interpolateArgsIntoCommand(
+          'echo',
+          {
+            __unparsed__: [
+              '--hello=test 123',
+              'hello world',
+              '"random config"',
+              '456',
+            ],
+          } as any,
+          true
+        )
+      ).toEqual(`echo --hello="test 123" "hello world" "random config" 456`); // should wrap aroound __unparsed__ args with key value
+    });
   });
 
   describe('--color', () => {
diff --git a/packages/nx/src/executors/run-commands/run-commands.impl.ts b/packages/nx/src/executors/run-commands/run-commands.impl.ts
index 4675de6944f17..af8c4c8abc609 100644
--- a/packages/nx/src/executors/run-commands/run-commands.impl.ts
+++ b/packages/nx/src/executors/run-commands/run-commands.impl.ts
@@ -494,6 +494,7 @@ export function interpolateArgsIntoCommand(
               opts.parsedArgs[k] === opts.unknownOptions[k]
           )
           .map((k) => `--${k}=${opts.unknownOptions[k]}`)
+          .map(wrapArgIntoQuotesIfNeeded)
           .join(' ');
     }
     if (opts.args) {
@@ -505,7 +506,9 @@ export function interpolateArgsIntoCommand(
         opts.unparsedCommandArgs
       );
       if (filterdParsedOptions.length > 0) {
-        args += ` ${filterdParsedOptions.join(' ')}`;
+        args += ` ${filterdParsedOptions
+          .map(wrapArgIntoQuotesIfNeeded)
+          .join(' ')}`;
       }
     }
     return `${command}${args}`;
@@ -627,3 +630,21 @@ function registerProcessListener() {
     // will store results to the cache and will terminate this process
   });
 }
+
+function wrapArgIntoQuotesIfNeeded(arg: string): string {
+  if (arg.includes('=')) {
+    const [key, value] = arg.split('=');
+    if (
+      key.startsWith('--') &&
+      value.includes(' ') &&
+      !(value[0] === "'" || value[0] === '"')
+    ) {
+      return `${key}="${value}"`;
+    }
+    return arg;
+  } else if (arg.includes(' ') && !(arg[0] === "'" || arg[0] === '"')) {
+    return `"${arg}"`;
+  } else {
+    return arg;
+  }
+}