diff --git a/crates/bashkit/fuzz/Cargo.toml b/crates/bashkit/fuzz/Cargo.toml
index 30cd3330..3edfb033 100644
--- a/crates/bashkit/fuzz/Cargo.toml
+++ b/crates/bashkit/fuzz/Cargo.toml
@@ -80,3 +80,10 @@ path = "fuzz_targets/base64_fuzz.rs"
 test = false
 doc = false
 bench = false
+
+[[bin]]
+name = "envsubst_fuzz"
+path = "fuzz_targets/envsubst_fuzz.rs"
+test = false
+doc = false
+bench = false
diff --git a/crates/bashkit/fuzz/fuzz_targets/envsubst_fuzz.rs b/crates/bashkit/fuzz/fuzz_targets/envsubst_fuzz.rs
new file mode 100644
index 00000000..b832260f
--- /dev/null
+++ b/crates/bashkit/fuzz/fuzz_targets/envsubst_fuzz.rs
@@ -0,0 +1,84 @@
+//! Fuzz target for the envsubst builtin
+//!
+//! Tests environment variable substitution to find:
+//! - Panics on malformed variable references ($, ${, ${VAR, etc.)
+//! - Edge cases with special characters in variable names
+//! - Nested or recursive variable references
+//! - Unclosed braces and partial substitution syntax
+//!
+//! Run with: cargo +nightly fuzz run envsubst_fuzz -- -max_total_time=300
+
+#![no_main]
+
+use libfuzzer_sys::fuzz_target;
+
+fuzz_target!(|data: &[u8]| {
+    // Only process valid UTF-8
+    if let Ok(input) = std::str::from_utf8(data) {
+        // Limit input size to prevent OOM
+        if input.len() > 1024 {
+            return;
+        }
+
+        // Reject deeply nested braces
+        let depth: i32 = input
+            .bytes()
+            .map(|b| match b {
+                b'{' => 1,
+                b'}' => -1,
+                _ => 0,
+            })
+            .scan(0i32, |acc, d| {
+                *acc += d;
+                Some(*acc)
+            })
+            .max()
+            .unwrap_or(0);
+        if depth > 15 {
+            return;
+        }
+
+        let rt = tokio::runtime::Builder::new_current_thread()
+            .enable_all()
+            .build()
+            .unwrap();
+
+        rt.block_on(async {
+            let mut bash = bashkit::Bash::builder()
+                .limits(
+                    bashkit::ExecutionLimits::new()
+                        .max_commands(50)
+                        .max_subst_depth(3)
+                        .max_stdout_bytes(4096)
+                        .max_stderr_bytes(4096)
+                        .timeout(std::time::Duration::from_millis(200)),
+                )
+                .env("HOME", "/home/user")
+                .env("PATH", "/usr/bin")
+                .env("LANG", "en_US.UTF-8")
+                .env("TESTVAR", "hello world")
+                .build();
+
+            // Test 1: envsubst on fuzzed text with variable references
+            let script = format!(
+                "echo '{}' | envsubst 2>/dev/null; true",
+                input.replace('\'', "'\\''"),
+            );
+            let _ = bash.exec(&script).await;
+
+            // Test 2: envsubst with -v flag to list variables
+            let script2 = format!(
+                "echo '{}' | envsubst -v 2>/dev/null; true",
+                input.replace('\'', "'\\''"),
+            );
+            let _ = bash.exec(&script2).await;
+
+            // Test 3: envsubst with SHELL-FORMAT restriction
+            let script3 = format!(
+                "echo '{}' | envsubst '$HOME $PATH' 2>/dev/null; true",
+                input.replace('\'', "'\\''"),
+            );
+            let _ = bash.exec(&script3).await;
+        });
+    }
+});