diff --git a/src/complete.cpp b/src/complete.cpp
index a863e5e3a..ae9681b61 100644
--- a/src/complete.cpp
+++ b/src/complete.cpp
@@ -1406,6 +1406,14 @@ void completer_t::complete_custom(const wcstring &cmd, const wcstring &cmdline,
     }
 }
 
+static bool expand_command_token(const operation_context_t &ctx, wcstring &cmd_tok) {
+    // TODO: we give up if the first token expands to more than one argument. We could handle
+    // that case by propagating arguments.
+    // Also we could expand wildcards.
+    return expand_one(cmd_tok, {expand_flag::skip_cmdsubst, expand_flag::skip_wildcards}, ctx,
+                      nullptr);
+}
+
 // Invoke command-specific completions given by \p arg_data.
 // Then, for each target wrapped by the given command, update the command
 // line with that target and invoke this recursively.
@@ -1445,6 +1453,7 @@ void completer_t::walk_wrap_chain(const wcstring &cmd, const wcstring &cmdline,
             } else {
                 wrapped_command_offset_in_wt = tok->offset;
                 wrapped_command = std::move(tok_src);
+                expand_command_token(ctx, wrapped_command);
                 break;
             }
         }
@@ -1670,15 +1679,15 @@ void completer_t::perform_for_commandline(wcstring cmdline) {
         source_range_t command_range = {static_cast<uint32_t>(cmd_tok.offset),
                                         static_cast<uint32_t>(cmd_tok.length)};
 
-        wcstring unesc_command;
+        wcstring exp_command = cmd_tok.get_source(cmdline);
         bool unescaped =
-            unescape_string(cmd_tok.get_source(cmdline), &unesc_command, UNESCAPE_DEFAULT) &&
+            expand_command_token(ctx, exp_command) &&
             unescape_string(previous_argument, &arg_data.previous_argument, UNESCAPE_DEFAULT) &&
             unescape_string(current_argument, &arg_data.current_argument, UNESCAPE_INCOMPLETE);
         if (unescaped) {
             // Have to walk over the command and its entire wrap chain. If any command
             // disables do_file, then they all do.
-            walk_wrap_chain(unesc_command, cmdline, command_range, &arg_data);
+            walk_wrap_chain(exp_command, cmdline, command_range, &arg_data);
             do_file = arg_data.do_file;
 
             // If we're autosuggesting, and the token is empty, don't do file suggestions.
@@ -1689,7 +1698,7 @@ void completer_t::perform_for_commandline(wcstring cmdline) {
 
         // Hack. If we're cd, handle it specially (issue #1059, others).
         handle_as_special_cd =
-            (unesc_command == L"cd") || arg_data.visited_wrapped_commands.count(L"cd");
+            (exp_command == L"cd") || arg_data.visited_wrapped_commands.count(L"cd");
     }
 
     // Maybe apply variable assignments.
diff --git a/tests/checks/complete.fish b/tests/checks/complete.fish
index f3991cca2..50076af04 100644
--- a/tests/checks/complete.fish
+++ b/tests/checks/complete.fish
@@ -410,6 +410,12 @@ complete -p $PWD/command-not-in-path -xa relative-path
 complete -C './command-not-in-path '
 # CHECK: relative-path
 
+# Expand variables and tildes in command.
+complete -C '$PWD/command-not-in-path '
+# CHECK: relative-path
+HOME=$PWD complete -C '~/command-not-in-path '
+# CHECK: relative-path
+
 # Non-canonical command path
 mkdir -p subdir
 : >subdir/command-in-subdir
@@ -427,3 +433,24 @@ end
 
 cd -
 rm -r $dir
+
+# Expand variables and tildes in command.
+complete cat -xa +pet
+set -l path_to_cat (command -v cat)
+complete -C '$path_to_cat '
+# CHECK: +pet
+HOME=$path_to_cat/.. complete -C '~/cat '
+# CHECK: +pet
+
+# Do not expand command substitutions.
+complete -C '(echo cat) ' | string match +pet
+# Give up if we expand to multiple arguments (we'd need to handle the arguments).
+complete -C '{cat,arg1,arg2} ' | string match +pet
+# Don't expand wildcards though we could.
+complete -C '$path_to_cat* ' | string match +pet
+
+# Also expand wrap targets.
+function crookshanks --wraps '$path_to_cat'
+end
+complete -C 'crookshanks '
+# CHECK: +pet