diff --git a/src/host/path_isabsolute.c b/src/host/path_isabsolute.c
index 85ba254e..19731709 100644
--- a/src/host/path_isabsolute.c
+++ b/src/host/path_isabsolute.c
@@ -17,13 +17,59 @@ int path_isabsolute(lua_State* L)
 
 int do_isabsolute(const char* path)
 {
-	return (
-		path[0] == '/' ||
-		path[0] == '\\' ||
-		path[0] == '$' ||
-		path[0] == '%' ||
-		(path[0] == '"' && path[1] == '$') ||
-		(path[0] == '"' && path[1] == '%') ||
-		(path[0] != '\0' && path[1] == ':')
-	);
+	char c;
+	char* closing;
+
+	if (path[0] == '/' || path[0] == '\\')
+		return 1;
+	if (isalpha(path[0]) && path[1] == ':')
+		return 1;
+	if (path[0] == '"')
+		return do_isabsolute(path + 1);
+
+	// $(foo)
+	if (path[0] == '$' && path[1] == '(')
+	{
+		path += 2;
+		closing = strchr(path, ')');
+		if (closing == NULL)
+			return 0;
+
+		// only alpha, digits and _ allowed inside $()
+		while (path < closing) {
+			c = *path++;
+			if (!isalpha(c) && !isdigit(c) && c != '_')
+				return 0;
+		}
+
+		return 1;
+	}
+
+	// $ORIGIN.
+	if (path[0] == '$')
+		return 1;
+
+	// %foo%
+	if (path[0] == '%')
+	{
+		// find the second closing %
+		path += 1;
+		closing = strchr(path, '%');
+		if (closing == NULL)
+			return 0;
+
+		// need at least one character between the %%
+		if (path == closing)
+			return 0;
+
+		// only alpha, digits and _ allowed inside %..%
+		while (path < closing) {
+			c = *path++;
+			if (!isalpha(c) && !isdigit(c) && c != '_')
+				return 0;
+		}
+		return 1;
+	}
+
+	return 0;
 }
diff --git a/tests/base/test_path.lua b/tests/base/test_path.lua
index 182c2f14..548bcebb 100755
--- a/tests/base/test_path.lua
+++ b/tests/base/test_path.lua
@@ -238,10 +238,30 @@
 		test.isfalse(path.isabsolute("a/b/c"))
 	end
 
-	function suite.isabsolute_ReturnsTrue_OnDollarSign()
+	function suite.isabsolute_ReturnsTrue_OnDollarToken()
 		test.istrue(path.isabsolute("$(SDK_HOME)/include"))
 	end
 
+	function suite.isabsolute_ReturnsTrue_OnJustADollarSign()
+		test.istrue(path.isabsolute("$foo/include"))
+	end
+
+	function suite.isabsolute_ReturnsFalse_OnIncompleteDollarToken()
+		test.isfalse(path.isabsolute("$(foo/include"))
+	end
+
+	function suite.isabsolute_ReturnsTrue_OnEnvVar()
+		test.istrue(path.isabsolute("%FOO%/include"))
+	end
+
+	function suite.isabsolute_ReturnsFalse_OnEmptyEnvVar()
+		test.isfalse(path.isabsolute("%%/include"))
+	end
+
+	function suite.isabsolute_ReturnsFalse_OnToken()
+		test.isfalse(path.isabsolute("%{foo}/include"))
+	end
+
 
 --
 -- path.join() tests
@@ -339,6 +359,21 @@
 		test.isequal("p1/./../p2", path.join("p1/.", "../p2"))
 	end
 
+	function suite.join_absolute_second_part()
+		test.isequal("$ORIGIN", path.join("foo/bar", "$ORIGIN"))
+	end
+
+	function suite.join_absolute_second_part1()
+		test.isequal("$(FOO)/bar", path.join("foo/bar", "$(FOO)/bar"))
+	end
+
+	function suite.join_absolute_second_part2()
+		test.isequal("%ROOT%/foo", path.join("foo/bar", "%ROOT%/foo"))
+	end
+
+	function suite.join_token_in_second_part()
+		test.isequal("foo/bar/%{test}/foo", path.join("foo/bar", "%{test}/foo"))
+	end
 
 --
 -- path.rebase() tests