diff --git a/pkg/util/shellutil/tokenswap.go b/pkg/util/shellutil/tokenswap.go
index 302bfa59b8..cb0ba42708 100644
--- a/pkg/util/shellutil/tokenswap.go
+++ b/pkg/util/shellutil/tokenswap.go
@@ -7,6 +7,7 @@ import (
 	"encoding/base64"
 	"encoding/json"
 	"fmt"
+	"strings"
 	"sync"
 	"time"
 
@@ -123,11 +124,12 @@ func encodeEnvVarsForFish(env map[string]string) (string, error) {
 func encodeEnvVarsForPowerShell(env map[string]string) (string, error) {
 	var encoded string
 	for k, v := range env {
-		// validate key
-		if !IsValidEnvVarName(k) {
+		// PowerShell's braced environment-variable syntax supports Windows names
+		// such as ProgramFiles(x86), but a closing brace cannot be represented.
+		if k == "" || strings.Contains(k, "}") {
 			return "", fmt.Errorf("invalid env var name: %q", k)
 		}
-		encoded += fmt.Sprintf("$env:%s = %s\n", k, HardQuotePowerShell(v))
+		encoded += fmt.Sprintf("${env:%s} = %s\n", k, HardQuotePowerShell(v))
 	}
 	return encoded, nil
 }
diff --git a/pkg/util/shellutil/tokenswap_test.go b/pkg/util/shellutil/tokenswap_test.go
new file mode 100644
index 0000000000..cc61df9326
--- /dev/null
+++ b/pkg/util/shellutil/tokenswap_test.go
@@ -0,0 +1,56 @@
+// Copyright 2025, Command Line Inc.
+// SPDX-License-Identifier: Apache-2.0
+
+package shellutil
+
+import "testing"
+
+func TestEncodeEnvVarsForPowerShell(t *testing.T) {
+	tests := []struct {
+		name     string
+		envName  string
+		envValue string
+		want     string
+	}{
+		{
+			name:     "ProgramFiles(x86)",
+			envName:  "ProgramFiles(x86)",
+			envValue: `C:\Program Files (x86)`,
+			want:     "${env:ProgramFiles(x86)} = \"C:\\Program Files (x86)\"\n",
+		},
+		{
+			name:     "CommonProgramFiles(x86)",
+			envName:  "CommonProgramFiles(x86)",
+			envValue: `C:\Program Files\Common Files (x86)`,
+			want:     "${env:CommonProgramFiles(x86)} = \"C:\\Program Files\\Common Files (x86)\"\n",
+		},
+		{
+			name:     "PATH",
+			envName:  "PATH",
+			envValue: `C:\Windows\System32`,
+			want:     "${env:PATH} = \"C:\\Windows\\System32\"\n",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			got, err := EncodeEnvVarsForShell(ShellType_pwsh, map[string]string{tt.envName: tt.envValue})
+			if err != nil {
+				t.Fatalf("EncodeEnvVarsForShell() returned error: %v", err)
+			}
+			if got != tt.want {
+				t.Errorf("EncodeEnvVarsForShell() = %q, want %q", got, tt.want)
+			}
+		})
+	}
+}
+
+func TestEncodeEnvVarsForPowerShellRejectsUnrepresentableNames(t *testing.T) {
+	for _, name := range []string{"", "invalid}name"} {
+		t.Run(name, func(t *testing.T) {
+			if _, err := EncodeEnvVarsForShell(ShellType_pwsh, map[string]string{name: "value"}); err == nil {
+				t.Errorf("EncodeEnvVarsForShell() accepted unrepresentable name %q", name)
+			}
+		})
+	}
+}