diff --git a/python-tox-Fix-command-expansion-and-parsing.patch b/python-tox-Fix-command-expansion-and-parsing.patch
new file mode 100644
index 0000000..c5450cc
--- /dev/null
+++ b/python-tox-Fix-command-expansion-and-parsing.patch
@@ -0,0 +1,93 @@
+# HG changeset patch
+# User Clark Boylan <clark.boylan@gmail.com>
+# Date 1391830704 28800
+# Node ID 62fe57a8fd3f8f44be8957e59846387d2f505227
+# Parent  b0360a54ab368ef428c7f83601ba6b64f6fec64f
+Fix command expansion and parsing.
+
+Tox testenv commands are parsed to expand variable substitutions and
+construct the argv list that will be passed to exec. Prior to this
+commit this parsing ate quotes surrounding variables and treated
+multiword variables as single argv items. Neither behavior was correct.
+To fix this create the expanded command before handing it off to shlex
+to do the tokenization of the argv list. Doing the parsing in this
+order ensures it is correct.
+
+diff --git a/tests/test_config.py b/tests/test_config.py
+--- a/tests/test_config.py
++++ b/tests/test_config.py
+@@ -278,7 +278,7 @@
+         #    "reader.getargvlist('section', 'key1')")
+         assert reader.getargvlist('section', 'key1') == []
+         x = reader.getargvlist("section", "key2")
+-        assert x == [["cmd1", "with space", "grr"],
++        assert x == [["cmd1", "with", "space", "grr"],
+                      ["cmd2", "grr"]]
+ 
+     def test_argvlist_windows_escaping(self, tmpdir, newconfig):
+@@ -304,7 +304,7 @@
+         #    "reader.getargvlist('section', 'key1')")
+         assert reader.getargvlist('section', 'key1') == []
+         x = reader.getargvlist("section", "key2")
+-        assert x == [["cmd1", "with space", "grr"]]
++        assert x == [["cmd1", "with", "space", "grr"]]
+ 
+ 
+     def test_argvlist_quoting_in_command(self, tmpdir, newconfig):
+diff --git a/tox/_config.py b/tox/_config.py
+--- a/tox/_config.py
++++ b/tox/_config.py
+@@ -527,30 +527,35 @@
+     def _processcommand(self, command):
+         posargs = getattr(self, "posargs", None)
+ 
+-        # special treat posargs which might contain multiple arguments
+-        # in their defaults
++        # Iterate through each word of the command substituting as
++        # appropriate to construct the new command string. This
++        # string is then broken up into exec argv components using
++        # shlex.
+         newcommand = ""
+         for word in CommandParser(command).words():
+-            if word.startswith("{posargs:") and word.endswith("}"):
++            if word == "{posargs}" or word == "[]":
+                 if posargs:
+-                    word = "{posargs}"
++                    newcommand += " ".join(posargs)
++                continue
++            elif word.startswith("{posargs:") and word.endswith("}"):
++                if posargs:
++                    newcommand += " ".join(posargs)
++                    continue
+                 else:
+                     word = word[9:-1]
+-            newcommand += word
++            new_arg = ""
++            new_word = self._replace(word)
++            new_word = self._replace(new_word)
++            new_arg += new_word
++            newcommand += new_arg
+ 
+-        # now we can properly parse the command
+-        argv = []
+-        for arg in shlex.split(newcommand):
+-            if arg in ('[]', "{posargs}"):
+-                if posargs:
+-                    argv.extend(posargs)
+-                continue
+-            new_arg = ""
+-            for word in CommandParser(arg).words():
+-                new_word = self._replace(word)
+-                new_word = self._replace(new_word)
+-                new_arg += new_word
+-            argv.append(new_arg)
++        # Construct shlex object that will not escape any values,
++        # use all values as is in argv.
++        shlexer = shlex.shlex(newcommand, posix=True)
++        shlexer.whitespace_split = True
++        shlexer.escape = ''
++        shlexer.commenters = ''
++        argv = list(shlexer)
+         return argv
+ 
+     def getargv(self, section, name, default=None, replace=True):
diff --git a/python-tox.spec b/python-tox.spec
index 5d14301..1647f97 100644
--- a/python-tox.spec
+++ b/python-tox.spec
@@ -12,7 +12,7 @@
 %global pypiname tox
 Name:           python-tox
 Version:        1.7.1
-Release:        2%{?dist}
+Release:        3%{?dist}
 Summary:        Virtualenv-based automation of test activities
 
 # file toxbootstrap.py is licensed under MIT License
@@ -20,6 +20,8 @@ License:        GPLv2+ and MIT
 URL:            http://codespeak.net/tox
 Source0:        http://pypi.python.org/packages/source/t/%{pypiname}/%{pypiname}-%{version}.tar.gz
 
+Patch0:         python-tox-Fix-command-expansion-and-parsing.patch
+
 BuildArch:      noarch
 BuildRequires:  python2-devel
 BuildRequires:  python-setuptools
@@ -66,6 +68,8 @@ can use for:
 
 %prep 
 %setup -q -n %{pypiname}-%{version}
+%patch0 -p1
+
 %if 0%{?with_python3}
 rm -rf %{py3dir}
 cp -a . %{py3dir}
@@ -120,6 +124,10 @@ TOXENV=py27 %{__python} setup.py test
 
 
 %changelog
+* Wed Aug 13 2014 Matthias Runge <mrunge@redhat.com> - 1.7.1-3
+- Fix ConfigError: ConfigError: substitution key 'posargs' not found
+  (rhbz#1127961, rhbz#1128562)
+
 * Wed Jul 30 2014 Matthias Runge <mrunge@redhat.com> - 1.7.1-2
 - require virtualenv >= 1.11.2 (rhbz#1122603)