diff --git a/mlir/lib/Pass/PassRegistry.cpp b/mlir/lib/Pass/PassRegistry.cpp
--- a/mlir/lib/Pass/PassRegistry.cpp
+++ b/mlir/lib/Pass/PassRegistry.cpp
@@ -154,35 +154,79 @@
     std::get<0>(optionsIt)->copyValueFrom(*std::get<1>(optionsIt));
 }
 
+static std::pair<StringRef, StringRef> parseNextArg(StringRef &options) {
+  // Functor used to extract an argument from 'options' and update it to point
+  // after the arg.
+  auto extractArgAndUpdateOptions = [&](size_t argSize) {
+    StringRef str = options.take_front(argSize).trim();
+    options = options.drop_front(argSize).ltrim();
+    return str;
+  };
+  // Try to process the given punctuation, properly escaping any contained
+  // characters.
+  auto tryProcessPunct = [&](size_t &currentPos, char punct) {
+    if (options[currentPos] != punct)
+      return false;
+    size_t nextIt = options.find_first_of(punct, currentPos + 1);
+    if (nextIt != StringRef::npos)
+      currentPos = nextIt;
+    return true;
+  };
+
+  // Parse the argument name of the option.
+  StringRef argName;
+  for (size_t argEndIt = 0, optionsE = options.size();; ++argEndIt) {
+    // Check for the end of the full option.
+    if (argEndIt == optionsE || options[argEndIt] == ' ')
+      return std::make_pair(extractArgAndUpdateOptions(argEndIt), StringRef());
+
+    // Check for the end of the name and the start of the value.
+    if (options[argEndIt] == '=') {
+      argName = extractArgAndUpdateOptions(argEndIt);
+      options = options.drop_front();
+      break;
+    }
+  }
+
+  // Parse the value of the option.
+  for (size_t argEndIt = 0, optionsE = options.size();; ++argEndIt) {
+    // Handle the end of the options string.
+    if (argEndIt == optionsE || options[argEndIt] == ' ')
+      return std::make_pair(argName, extractArgAndUpdateOptions(argEndIt));
+
+    // Skip over escaped sequences.
+    char c = options[argEndIt];
+    if (tryProcessPunct(argEndIt, '\'') || tryProcessPunct(argEndIt, '"'))
+      continue;
+    // '{...}' is used to specify options to passes, properly escape it so
+    // that we don't accidentally split any nested options.
+    if (c == '{') {
+      size_t braceCount = 1;
+      for (; argEndIt != optionsE; ++argEndIt) {
+        // Allow nested punctuation.
+        if (tryProcessPunct(argEndIt, '\'') || tryProcessPunct(argEndIt, '"'))
+          continue;
+        if (options[argEndIt] == '{')
+          ++braceCount;
+        else if (options[argEndIt] == '}' && --braceCount == 0)
+          break;
+      }
+      // Account for the increment at the top of the loop.
+      --argEndIt;
+    }
+  }
+  llvm_unreachable("unexpected control flow in pass option parsing");
+}
+
 LogicalResult detail::PassOptions::parseFromString(StringRef options) {
-  // TODO: Handle escaping strings.
   // NOTE: `options` is modified in place to always refer to the unprocessed
   // part of the string.
   while (!options.empty()) {
-    size_t spacePos = options.find(' ');
-    StringRef arg = options;
-    if (spacePos != StringRef::npos) {
-      arg = options.substr(0, spacePos);
-      options = options.substr(spacePos + 1);
-    } else {
-      options = StringRef();
-    }
-    if (arg.empty())
+    StringRef key, value;
+    std::tie(key, value) = parseNextArg(options);
+    if (key.empty())
       continue;
 
-    // At this point, arg refers to everything that is non-space in options
-    // upto the next space, and options refers to the rest of the string after
-    // that point.
-
-    // Split the individual option on '=' to form key and value. If there is no
-    // '=', then value is `StringRef()`.
-    size_t equalPos = arg.find('=');
-    StringRef key = arg;
-    StringRef value;
-    if (equalPos != StringRef::npos) {
-      key = arg.substr(0, equalPos);
-      value = arg.substr(equalPos + 1);
-    }
     auto it = OptionsMap.find(key);
     if (it == OptionsMap.end()) {
       llvm::errs() << "<Pass-Options-Parser>: no such option " << key << "\n";
diff --git a/mlir/test/Pass/pipeline-options-parsing.mlir b/mlir/test/Pass/pipeline-options-parsing.mlir
--- a/mlir/test/Pass/pipeline-options-parsing.mlir
+++ b/mlir/test/Pass/pipeline-options-parsing.mlir
@@ -3,7 +3,7 @@
 // RUN: not mlir-opt %s -pass-pipeline='builtin.module(builtin.func(test-options-pass{list=3}), test-module-pass{invalid-option=3})' 2>&1 | FileCheck --check-prefix=CHECK_ERROR_3 %s
 // RUN: not mlir-opt %s -pass-pipeline='test-options-pass{list=3 list=notaninteger}' 2>&1 | FileCheck --check-prefix=CHECK_ERROR_4 %s
 // RUN: not mlir-opt %s -pass-pipeline='builtin.func(test-options-pass{list=1,2,3,4 list=5 string=value1 string=value2})' 2>&1 | FileCheck --check-prefix=CHECK_ERROR_5 %s
-// RUN: mlir-opt %s -verify-each=false -pass-pipeline='builtin.func(test-options-pass{string-list=a list=1,2,3,4 string-list=b,c list=5 string-list=d string=some_value})' -test-dump-pipeline 2>&1 | FileCheck --check-prefix=CHECK_1 %s
+// RUN: mlir-opt %s -verify-each=false -pass-pipeline='builtin.func(test-options-pass{string-list=a list=1,2,3,4 string-list=b,c list=5 string-list=d string=nested_pipeline{arg1=10 arg2=" {} " arg3=true}})' -test-dump-pipeline 2>&1 | FileCheck --check-prefix=CHECK_1 %s
 // RUN: mlir-opt %s -verify-each=false -test-options-pass-pipeline='list=1 string-list=a,b' -test-dump-pipeline 2>&1 | FileCheck --check-prefix=CHECK_2 %s
 // RUN: mlir-opt %s -verify-each=false -pass-pipeline='builtin.module(builtin.func(test-options-pass{list=3}), builtin.func(test-options-pass{list=1,2,3,4}))' -test-dump-pipeline 2>&1 | FileCheck --check-prefix=CHECK_3 %s
 
@@ -13,6 +13,6 @@
 // CHECK_ERROR_4: 'notaninteger' value invalid for integer argument
 // CHECK_ERROR_5: string option: may only occur zero or one times
 
-// CHECK_1: test-options-pass{list=1,2,3,4,5 string=some_value string-list=a,b,c,d}
+// CHECK_1: test-options-pass{list=1,2,3,4,5 string=nested_pipeline{arg1=10 arg2=" {} " arg3=true} string-list=a,b,c,d}
 // CHECK_2: test-options-pass{list=1 string= string-list=a,b}
 // CHECK_3: builtin.module(builtin.func(test-options-pass{list=3 string= }), builtin.func(test-options-pass{list=1,2,3,4 string= }))