diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index b9368f7492f..45945e68bb2 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -209,11 +209,11 @@ Also, please bear the following coding guidelines in mind:
   code is accepted into the distribution, a lot of people will try it
   out, so try to do a thorough job of eradicating all the bugs before
   you send it to us. If at all practical, **add test cases** to our
-  test suite (in the test/ dir) that verify that the code does what it
+  test suite (in the `test/` dir) that verify that the code does what it
   is intended to do, fixes issues it intends to fix, etc.
 
-- In addition to running the test suite, there are a few scripts in the test/
-  dir that catch some common issues, see and use for example runLint.
+- In addition to running the test suite, there are a few scripts in the `test/`
+  dir that catch some common issues, see and use for example `runLint`.
 
 - Make sure you have Python 3.7 or later installed. This is required for
   running the development tooling, linters etc. Rest of the development
diff --git a/bash_completion b/bash_completion
index 4e488d44564..1bb79cf7fb2 100644
--- a/bash_completion
+++ b/bash_completion
@@ -1483,6 +1483,27 @@ _comp_initialize()
     local redir='@(?(+([0-9])|{[a-zA-Z_]*([a-zA-Z_0-9])})@(>?([>|&])|<?([>&])|<<?([-<]))|&>?(>))'
     _comp_get_words -n "$exclude<>&" cur prev words cword
 
+    # If the current word is a command substitution $(, reset the completion context to be the
+    # command line *inside* the substitution.
+    if [[ $cur == '$('* ]]; then
+        local inner_line=${cur#\$\(}
+
+        # Replace the completion variables with ones that reflect the inner context.
+        COMP_LINE=$inner_line
+        read -ra COMP_WORDS <<<"$inner_line"
+        COMP_CWORD=$((${#COMP_WORDS[@]} - 1))
+        cur=${COMP_WORDS[COMP_CWORD]}
+        # Also update words and cword used by the rest of _comp_initialize
+        words=("${COMP_WORDS[@]}")
+        cword=$COMP_CWORD
+        # Handle case where there's only one word in the substitution
+        if ((COMP_CWORD > 0)); then
+            prev=${COMP_WORDS[COMP_CWORD - 1]}
+        else
+            prev=""
+        fi
+    fi
+
     # Complete variable names.
     _comp_compgen_variables && return 1
 
diff --git a/test/t/unit/test_unit_command_substitution.py b/test/t/unit/test_unit_command_substitution.py
new file mode 100644
index 00000000000..e481573e81f
--- /dev/null
+++ b/test/t/unit/test_unit_command_substitution.py
@@ -0,0 +1,45 @@
+import pytest
+
+from conftest import TestUnitBase
+
+
+@pytest.mark.bashcomp(
+    cmd=None,
+    ignore_env=r"^[+-](COMP(_(WORDS|CWORD|LINE|POINT)|REPLY)|"
+    r"cur|prev|cword|words)=",
+)
+class TestUnitCommandSubstitution(TestUnitBase):
+    def test_command_substitution_completion(self, bash):
+        """Test that command substitution completion works correctly"""
+        # Test basic command substitution: $(echo
+        output = self._test_unit(
+            "_comp_initialize %s; echo $COMP_LINE,$COMP_CWORD,$cur,$prev",
+            bash,
+            "(echo '$(echo')",
+            1,
+            "echo '$(echo'",
+            12,
+        )
+        assert output == "echo,0,echo,"
+
+        # Test command substitution with arguments: $(ls -l
+        output = self._test_unit(
+            "_comp_initialize %s; echo $COMP_LINE,$COMP_CWORD,$cur,$prev",
+            bash,
+            "(echo '$(ls -l')",
+            1,
+            "echo '$(ls -l'",
+            13,
+        )
+        assert output == "ls -l,1,-l,ls"
+
+        # Test that normal completion is not affected
+        output = self._test_unit(
+            "_comp_initialize %s; echo $COMP_LINE,$COMP_CWORD,$cur,$prev",
+            bash,
+            "(echo hello)",
+            1,
+            "echo hello",
+            10,
+        )
+        assert output == "echo hello,1,hello,echo"