diff --git a/contrib/win32/mercurial.ini b/contrib/win32/mercurial.ini
--- a/contrib/win32/mercurial.ini
+++ b/contrib/win32/mercurial.ini
@@ -71,7 +71,7 @@ editor = notepad
 ;cmd.bc3diff = C:\Program Files\Beyond Compare 3\BCompare.exe
 ;cmd.vdiff = C:\Progra~1\TortoiseSVN\bin\TortoiseMerge.exe
 ;cmd.vimdiff = gvim.exe
-;opts.vimdiff = -f '+next' '+execute "DirDiff ".argv(0)." ".argv(1)'
+;opts.vimdiff = -f "+next" "+execute 'DirDiff' fnameescape(argv(0)) fnameescape(argv(1))"
 
 
 [hgk]
diff --git a/hgext/extdiff.py b/hgext/extdiff.py
--- a/hgext/extdiff.py
+++ b/hgext/extdiff.py
@@ -33,7 +33,8 @@ you do not need to type :hg:`extdiff -p 
   # (see http://www.vim.org/scripts/script.php?script_id=102) Non
   # English user, be sure to put "let g:DirDiffDynamicDiffText = 1" in
   # your .vimrc
-  vimdiff = gvim -f '+next' '+execute "DirDiff" argv(0) argv(1)'
+  vimdiff = gvim -f "+next" \\
+            "+execute 'DirDiff' fnameescape(argv(0)) fnameescape(argv(1))"
 
 Tool arguments can include variables that are expanded at runtime::
 
diff --git a/tests/test-extension.t b/tests/test-extension.t
--- a/tests/test-extension.t
+++ b/tests/test-extension.t
@@ -301,7 +301,8 @@ Extension module help vs command help:
     # (see http://www.vim.org/scripts/script.php?script_id=102) Non
     # English user, be sure to put "let g:DirDiffDynamicDiffText = 1" in
     # your .vimrc
-    vimdiff = gvim -f '+next' '+execute "DirDiff" argv(0) argv(1)'
+    vimdiff = gvim -f "+next" \
+              "+execute 'DirDiff' fnameescape(argv(0)) fnameescape(argv(1))"
   
   Tool arguments can include variables that are expanded at runtime: