diff --git a/CHANGELOG.md b/CHANGELOG.md
index fa81cc6e..2aa68d9b 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,6 +10,7 @@ project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
 ### Fixed
 
 - Strip a leading UTF-8 BOM from `.env` file contents so the first variable is no longer silently lost when the file is saved with BOM (e.g. by some JetBrains IDEs on Windows) by [@h1whelan] in [#640]
+- `set_key` now writes values containing `'` using a double-quoted, escaped form so the resulting `.env` line is valid shell and round-trips through the parser (#543)
 
 ## [1.2.2] - 2026-03-01
 
diff --git a/src/dotenv/main.py b/src/dotenv/main.py
index 3c4608d5..c83d7d3a 100644
--- a/src/dotenv/main.py
+++ b/src/dotenv/main.py
@@ -216,7 +216,12 @@ def set_key(
     )
 
     if quote:
-        value_out = "'{}'".format(value_to_set.replace("'", "\\'"))
+        if "'" in value_to_set:
+            # a single quote can't be escaped in a single-quoted value; use double quotes
+            escaped = value_to_set.replace("\\", "\\\\").replace('"', '\\"')
+            value_out = '"{}"'.format(escaped)
+        else:
+            value_out = "'{}'".format(value_to_set)
     else:
         value_out = value_to_set
     if export:
diff --git a/tests/test_main.py b/tests/test_main.py
index 1c33c808..b0d71886 100644
--- a/tests/test_main.py
+++ b/tests/test_main.py
@@ -29,10 +29,11 @@ def test_set_key_no_file(tmp_path):
     [
         ("", "a", "", (True, "a", ""), "a=''\n"),
         ("", "a", "b", (True, "a", "b"), "a='b'\n"),
-        ("", "a", "'b'", (True, "a", "'b'"), "a='\\'b\\''\n"),
+        ("", "a", "'b'", (True, "a", "'b'"), "a=\"'b'\"\n"),
         ("", "a", '"b"', (True, "a", '"b"'), "a='\"b\"'\n"),
-        ("", "a", "b'c", (True, "a", "b'c"), "a='b\\'c'\n"),
+        ("", "a", "b'c", (True, "a", "b'c"), 'a="b\'c"\n'),
         ("", "a", 'b"c', (True, "a", 'b"c'), "a='b\"c'\n"),
+        ("", "a", 'I\'m "in"', (True, "a", 'I\'m "in"'), 'a="I\'m \\"in\\""\n'),
         ("a=b", "a", "c", (True, "a", "c"), "a='c'\n"),
         ("a=b\n", "a", "c", (True, "a", "c"), "a='c'\n"),
         ("a=b\n\n", "a", "c", (True, "a", "c"), "a='c'\n\n"),