diff --git a/gash/eval.scm b/gash/eval.scm
index daace06..4b572d9 100644
--- a/gash/eval.scm
+++ b/gash/eval.scm
@@ -33,8 +33,10 @@
 ;;;
 ;;; Code:
 
-(define* (eval-word word #:key (output 'fields) (rhs-tildes? #f))
+(define* (eval-word word #:key (output 'fields) (rhs-tildes? #f)
+                    (on-command-substitution noop))
   (parameterize ((eval-cmd-sub (lambda (exps)
+                                 (on-command-substitution)
                                  (sh:substitute-command
                                    (lambda ()
                                      (for-each eval-sh exps))))))
@@ -124,11 +126,15 @@
     (('<sh-pipeline> cmd*s ..1)
      (apply sh:pipeline (map exp->thunk cmd*s)))
     (('<sh-set!> (names words) ..1)
-     (for-each (lambda (name word)
-                 (setvar! name (eval-word word
-                                          #:output 'string
-                                          #:rhs-tildes? #t)))
-               names words))
+     (let* ((command-substitution? #f)
+            (thunk (lambda () (set! command-substitution? #t))))
+       (for-each (lambda (name word)
+                   (setvar! name (eval-word word
+                                            #:output 'string
+                                            #:rhs-tildes? #t
+                                            #:on-command-substitution thunk)))
+                 names words)
+       (unless command-substitution? (set-status! 0))))
     (('<sh-subshell> . sub-exps)
      (sh:subshell (exps->thunk sub-exps)))
     (('<sh-while> test-exp sub-exps ..1)
diff --git a/tests/assignments.org b/tests/assignments.org
index bae3a05..d2a5106 100644
--- a/tests/assignments.org
+++ b/tests/assignments.org
@@ -106,3 +106,52 @@
 #+begin_example
   bin:gash
 #+end_example
+
+* Assignments reset exit status
+:script:
+#+begin_src sh
+  set +e
+  false
+  x=foobar
+#+end_src
+
+* Assigning exit status works
+:script:
+#+begin_src sh
+  set +e
+  false
+  x=$?
+  echo $x
+#+end_src
+:stdout:
+#+begin_example
+  1
+#+end_example
+
+* Assignments use command substitutions for exit status
+:script:
+#+begin_src sh
+  set +e
+  x=$(false)
+  echo $?
+  x=$(true)
+  echo $?
+#+end_src
+:stdout:
+#+begin_example
+  1
+  0
+#+end_example
+
+* Assignments update exit status on the fly
+:script:
+#+begin_src sh
+  set +e
+  false
+  x=$? y=$(true) z=$?
+  echo $x $z
+#+end_src
+:stdout:
+#+begin_example
+  1 0
+#+end_example