diff --git a/src/shell/execute.rs b/src/shell/execute.rs
index ce9754a..226dd55 100644
--- a/src/shell/execute.rs
+++ b/src/shell/execute.rs
@@ -589,12 +589,15 @@ async fn execute_subshell(
   )
   .await;
 
-  // sub shells do not cause an exit
   match result {
     ExecuteResult::Exit(code, handles) => {
+      // sub shells do not cause an exit
       ExecuteResult::Continue(code, Vec::new(), handles)
     }
-    ExecuteResult::Continue(_, _, _) => result,
+    ExecuteResult::Continue(code, _env_changes, handles) => {
+      // env changes are not propagated
+      ExecuteResult::Continue(code, Vec::new(), handles)
+    },
   }
 }
 
diff --git a/src/shell/test.rs b/src/shell/test.rs
index 6bd7b36..cc54547 100644
--- a/src/shell/test.rs
+++ b/src/shell/test.rs
@@ -672,6 +672,40 @@ async fn pwd() {
     .await;
 }
 
+#[tokio::test]
+async fn subshells() {
+  TestBuilder::new()
+    .command("(export TEST=1) && echo $TEST")
+    .assert_stdout("\n")
+    .assert_exit_code(0)
+    .run()
+    .await;
+  TestBuilder::new()
+    .directory("sub_dir")
+    .command("echo $PWD && (cd sub_dir && echo $PWD) && echo $PWD")
+    .assert_stdout(&format!("$TEMP_DIR\n$TEMP_DIR{FOLDER_SEPERATOR}sub_dir\n$TEMP_DIR\n"))
+    .assert_exit_code(0)
+    .run()
+    .await;
+  TestBuilder::new()
+    .command("export TEST=1 && (echo $TEST && unset TEST && echo $TEST) && echo $TEST")
+    .assert_stdout("1\n\n1\n")
+    .assert_exit_code(0)
+    .run()
+    .await;
+  TestBuilder::new()
+    .command("(exit 1) && echo 1")
+    .assert_exit_code(1)
+    .run()
+    .await;
+  TestBuilder::new()
+    .command("(exit 1) || echo 1")
+    .assert_stdout("1\n")
+    .assert_exit_code(0)
+    .run()
+    .await;
+}
+
 #[tokio::test]
 #[cfg(unix)]
 async fn pwd_logical() {