diff --git a/ChangeLog b/ChangeLog
index 063f7877c..dbf7b11b0 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -13,6 +13,7 @@
    due dates, which are no longer relevant to a completed task (thanks to
    Cory Donnelly).
  + Fixed bug that was causing the 'completed' report to sort incorrectly.
+ + Fixed bug #322 which failed to propagate rc overrides to shell commands.
 
 ------ old releases ------------------------------
 
diff --git a/src/Context.cpp b/src/Context.cpp
index 1b7ba1072..ed76022ff 100644
--- a/src/Context.cpp
+++ b/src/Context.cpp
@@ -50,7 +50,8 @@ Context::Context ()
 , tdb ()
 , stringtable ()
 , program ("")
-, overrides ("")
+, file_override ("")
+, var_overrides ("")
 , cmd ()
 , inShadow (false)
 {
@@ -66,6 +67,7 @@ void Context::initialize (int argc, char** argv)
 {
   // Capture the args.
   for (int i = 0; i < argc; ++i)
+  {
     if (i == 0)
     {
       program = argv[i];
@@ -76,6 +78,7 @@ void Context::initialize (int argc, char** argv)
     }
     else
       args.push_back (argv[i]);
+  }
 
   initialize ();
 }
@@ -350,13 +353,14 @@ void Context::loadCorrectConfigFile ()
   std::string rc   = home + "/.taskrc";
   std::string data = home + "/.task";
 
-  // Is there an override for rc?
+  // Is there an file_override for rc:?
   foreach (arg, args)
   {
     if (*arg == "--")
       break;
     else if (arg->substr (0, 3) == "rc:")
     {
+      file_override = *arg;
       rc = arg->substr (3, std::string::npos);
 
       home = rc;
@@ -380,7 +384,7 @@ void Context::loadCorrectConfigFile ()
   if (config.get ("data.location") != "")
     data = config.get ("data.location");
 
-  // Is there an override for data?
+  // Are there any var_overrides for data.location?
   foreach (arg, args)
   {
     if (*arg == "--")
@@ -440,7 +444,7 @@ void Context::loadCorrectConfigFile ()
           n.getUntilEOS (value))
       {
         config.set (name, value);
-        overrides += " " + *arg;
+        var_overrides += " " + *arg;
         footnote (std::string ("Configuration override ") +  // TODO i18n
                   arg->substr (3, std::string::npos));
       }
@@ -658,15 +662,21 @@ void Context::parse (
   if (parseCmd.command == "" && parseArgs.size () == 0)
   {
     // Apply overrides, if any.
-    std::string defaultCommand = config.get ("default.command") + overrides;
+    std::string defaultCommand = config.get ("default.command");
     if (defaultCommand != "")
     {
+      // Add on the overrides.
+      defaultCommand += " " + file_override + " " + var_overrides;
+
       // Stuff the command line.
       args.clear ();
       split (args, defaultCommand, ' ');
       header ("[task " + defaultCommand + "]");
 
       // Reinitialize the context and recurse.
+      file_override = "";
+      var_overrides = "";
+      footnotes.clear ();
       initialize ();
       parse (args, cmd, task, sequence, subst, filter);
     }
@@ -691,6 +701,8 @@ void Context::clear ()
 //  stringtable.clear ();
   program = "";
   args.clear ();
+  file_override = "";
+  var_overrides = "";
   cmd.command = "";
   tagAdditions.clear ();
   tagRemovals.clear ();
diff --git a/src/Context.h b/src/Context.h
index e903bb8a7..bf56675bc 100644
--- a/src/Context.h
+++ b/src/Context.h
@@ -83,7 +83,8 @@ public:
   StringTable               stringtable;
   std::string               program;
   std::vector <std::string> args;
-  std::string               overrides;
+  std::string               file_override;
+  std::string               var_overrides;
   Cmd                       cmd;
   std::map <std::string, std::string> aliases;
   std::vector <std::string> tagAdditions;
diff --git a/src/command.cpp b/src/command.cpp
index c359171c7..2609d22a9 100644
--- a/src/command.cpp
+++ b/src/command.cpp
@@ -1169,13 +1169,9 @@ void handleShell ()
             << std::endl
             << std::endl;
 
-  // Preserve any special override arguments, and reapply them for each
-  // shell command.
-  std::vector <std::string> special;
-  foreach (arg, context.args)
-    if (arg->substr (0, 3) == "rc." ||
-        arg->substr (0, 3) == "rc:")
-      special.push_back (*arg);
+  // Make a copy because context.clear will delete them.
+  std::string permanentOverrides = " " + context.file_override
+                                 + " " + context.var_overrides;
 
   std::string quit = "quit"; // TODO i18n
   std::string command;
@@ -1187,8 +1183,10 @@ void handleShell ()
 
     command = "";
     std::getline (std::cin, command);
-    command = trim (command);
+    std::string decoratedCommand = trim (command + permanentOverrides);
 
+    // When looking for the 'quit' command, use 'command', not
+    // 'decoratedCommand'.
     if (command.length ()   >  0              &&
         command.length ()   <= quit.length () &&
         lowerCase (command) == quit.substr (0, command.length ()))
@@ -1202,8 +1200,7 @@ void handleShell ()
         context.clear ();
 
         std::vector <std::string> args;
-        split (args, command, ' ');
-        foreach (arg, special) context.args.push_back (*arg);
+        split (args, decoratedCommand, ' ');
         foreach (arg, args)    context.args.push_back (*arg);
 
         context.initialize ();
diff --git a/src/text.cpp b/src/text.cpp
index d980b7c34..793ebc0f1 100644
--- a/src/text.cpp
+++ b/src/text.cpp
@@ -57,14 +57,16 @@ void wrapText (
 void split (
   std::vector<std::string>& results,
   const std::string& input,
-  const char delimiter)
+  const char delimiter,
+  bool nontrivial /* = true */)
 {
   results.clear ();
   std::string::size_type start = 0;
   std::string::size_type i;
   while ((i = input.find (delimiter, start)) != std::string::npos)
   {
-    results.push_back (input.substr (start, i - start));
+    if (!nontrivial || i != start)
+      results.push_back (input.substr (start, i - start));
     start = i + 1;
   }
 
@@ -76,7 +78,8 @@ void split (
 void split (
   std::vector<std::string>& results,
   const std::string& input,
-  const std::string& delimiter)
+  const std::string& delimiter,
+  bool nontrivial /* = true */)
 {
   results.clear ();
   std::string::size_type length = delimiter.length ();
@@ -85,7 +88,8 @@ void split (
   std::string::size_type i;
   while ((i = input.find (delimiter, start)) != std::string::npos)
   {
-    results.push_back (input.substr (start, i - start));
+    if (!nontrivial || i != start)
+      results.push_back (input.substr (start, i - start));
     start = i + length;
   }
 
diff --git a/src/text.h b/src/text.h
index 95eb718a7..bb82cb6fa 100644
--- a/src/text.h
+++ b/src/text.h
@@ -38,8 +38,8 @@ std::string trimRight (const std::string& in, const std::string& t = " ");
 std::string trim (const std::string& in, const std::string& t = " ");
 std::string unquoteText (const std::string&);
 void extractLine (std::string&, std::string&, int);
-void split (std::vector<std::string>&, const std::string&, const char);
-void split (std::vector<std::string>&, const std::string&, const std::string&);
+void split (std::vector<std::string>&, const std::string&, const char, bool nontrivial = true);
+void split (std::vector<std::string>&, const std::string&, const std::string&, bool nontrivial = true);
 void join (std::string&, const std::string&, const std::vector<std::string>&);
 std::string commify (const std::string&);
 std::string lowerCase (const std::string&);