diff --git a/CHANGELOG.md b/CHANGELOG.md
index 26d2879..f484af4 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,6 @@
 # Change log
 ### vNEXT
+- Fix escaping of literal .graphql files [Simon Lydell](https://github.com/lydell/) in [#88](https://github.com/apollographql/eslint-plugin-graphql/pull/88)
 - Fix ESLint config validation [Simon Lydell](https://github.com/lydell/) in [#86](https://github.com/apollographql/eslint-plugin-graphql/pull/86)
 
 ### v1.3.0
diff --git a/src/index.js b/src/index.js
index c42eb1f..b56d60c 100644
--- a/src/index.js
+++ b/src/index.js
@@ -463,8 +463,16 @@ function strWithLen(len) {
 
 const gqlProcessor = {
   preprocess: function(text) {
-    const escaped = text.replace(/`/g, '\\`');
-
+    // Wrap the text in backticks and prepend the internal tag. First the text
+    // must be escaped, because of the three sequences that have special
+    // meaning in JavaScript template literals, and could change the meaning of
+    // the text or cause syntax errors.
+    // https://tc39.github.io/ecma262/#prod-TemplateCharacter
+    //
+    // - "`" would end the template literal.
+    // - "\" would start an escape sequence.
+    // - "${" would start an interpolation.
+    const escaped = text.replace(/[`\\]|\$\{/g, '\\$&');
     return [`${internalTag}\`${escaped}\``];
   },
   postprocess: function(messages) {
diff --git a/test/makeProcessors.js b/test/makeProcessors.js
index 7364094..ebc1dbe 100644
--- a/test/makeProcessors.js
+++ b/test/makeProcessors.js
@@ -42,9 +42,9 @@ describe('processors', () => {
     assert(includes(extensions, '.graphql'));
   });
 
-  it('should escape backticks and prepend internalTag', () => {
-    const query = 'query { someValueWith` }';
-    const expected = 'ESLintPluginGraphQLFile`query { someValueWith\\` }`';
+  it('should wrap with backticks, escape properly and prepend internalTag', () => {
+    const query = 'query { search(q: "` \\n ${}") { title } }';
+    const expected = 'ESLintPluginGraphQLFile`query { search(q: "\\` \\\\n \\${}") { title } }`';
     const preprocess = processors['.gql'].preprocess;
     const result = preprocess(query);