diff --git a/src/libs/utils/stringutils.cpp b/src/libs/utils/stringutils.cpp
index 5024bd5ab57..688b9d59670 100644
--- a/src/libs/utils/stringutils.cpp
+++ b/src/libs/utils/stringutils.cpp
@@ -115,6 +115,40 @@ QTCREATOR_UTILS_EXPORT QString withTildeHomePath(const QString &path)
     return outPath;
 }
 
+bool AbstractMacroExpander::expandNestedMacros(const QString &str, int *pos, QString *ret)
+{
+    QString varName;
+    QChar prev;
+    QChar c;
+
+    int i = *pos;
+    int strLen = str.length();
+    varName.reserve(strLen - i);
+    for (; i < strLen; prev = c) {
+        c = str.at(i++);
+        if (c == QLatin1Char('}')) {
+            if (varName.isEmpty()) { // replace "%{}" with "%"
+                *ret = QString(QLatin1Char('%'));
+                *pos = i;
+                return true;
+            }
+            if (resolveMacro(varName, ret)) {
+                *pos = i;
+                return true;
+            }
+            return false;
+        } else if (c == QLatin1Char('{') && prev == QLatin1Char('%')) {
+            if (!expandNestedMacros(str, &i, ret))
+                return false;
+            varName.chop(1);
+            varName += ret;
+        } else {
+            varName += c;
+        }
+    }
+    return false;
+}
+
 int AbstractMacroExpander::findMacro(const QString &str, int *pos, QString *ret)
 {
     forever {
@@ -122,22 +156,13 @@ int AbstractMacroExpander::findMacro(const QString &str, int *pos, QString *ret)
         if (openPos < 0)
             return 0;
         int varPos = openPos + 2;
-        int closePos = str.indexOf(QLatin1Char('}'), varPos);
-        if (closePos < 0)
-            return 0;
-        int varLen = closePos - varPos;
-        if (varLen == 0) { // replace "%{}" with "%"
+        if (expandNestedMacros(str, &varPos, ret)) {
             *pos = openPos;
-            *ret = QString(QLatin1Char('%'));
-            return 3;
-        }
-        if (resolveMacro(str.mid(varPos, varLen), ret)) {
-            *pos = openPos;
-            return varLen + 3;
+            return varPos - openPos;
         }
         // An actual expansion may be nested into a "false" one,
         // so we continue right after the last %{.
-        *pos = varPos;
+        *pos = openPos + 2;
     }
 }
 
diff --git a/src/libs/utils/stringutils.h b/src/libs/utils/stringutils.h
index c4643634922..97d47d64e4d 100644
--- a/src/libs/utils/stringutils.h
+++ b/src/libs/utils/stringutils.h
@@ -71,6 +71,8 @@ public:
     //! \param ret Replacement string on output
     //! \return True if the expando was found
     virtual bool resolveMacro(const QString &name, QString *ret) = 0;
+private:
+    bool expandNestedMacros(const QString &str, int *pos, QString *ret);
 };
 
 QTCREATOR_UTILS_EXPORT void expandMacros(QString *str, AbstractMacroExpander *mx);
diff --git a/tests/auto/utils_stringutils/tst_stringutils.cpp b/tests/auto/utils_stringutils/tst_stringutils.cpp
index 289432cd287..ef69990737d 100644
--- a/tests/auto/utils_stringutils/tst_stringutils.cpp
+++ b/tests/auto/utils_stringutils/tst_stringutils.cpp
@@ -38,12 +38,20 @@ class TestMacroExpander : public Utils::AbstractMacroExpander
 public:
     virtual bool resolveMacro(const QString &name, QString *ret)
     {
+        if (name == QLatin1String("foo")) {
+            *ret = QLatin1String("a");
+            return true;
+        }
         if (name == QLatin1String("a")) {
             *ret = QLatin1String("hi");
             return true;
         }
-        if (name == QLatin1String("foo")) {
-            *ret = QLatin1String("a");
+        if (name == QLatin1String("hi")) {
+            *ret = QLatin1String("ho");
+            return true;
+        }
+        if (name == QLatin1String("hihi")) {
+            *ret = QLatin1String("bar");
             return true;
         }
         return false;
@@ -116,7 +124,15 @@ void tst_StringUtils::testMacroExpander_data()
         { "%{a}text%{a}", "hitexthi" },
         { "%{foo}%{a}text%{a}", "ahitexthi" },
         { "%{}{a}", "%{a}" },
-        { "%{abc", "%{abc" }
+        { "%{}", "%" },
+        { "test%{}", "test%" },
+        { "%{}test", "%test" },
+        { "%{abc", "%{abc" },
+        { "%{%{a}", "%{hi" },
+        { "%{%{a}}", "ho" },
+        { "%{%{a}}}post", "ho}post" },
+        { "%{hi%{a}}", "bar" },
+        { "%{hi%{%{foo}}}", "bar" },
     };
 
     for (unsigned i = 0; i < sizeof(vals)/sizeof(vals[0]); i++)