diff --git a/CHANGELOG b/CHANGELOG
index 44d5938e..aaef1988 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,7 +1,8 @@
 Development Version
 -------------------
 
-Nothing yet.
+* Escape literal dollar signs in PHP output so SQL text is not interpreted
+  as PHP string interpolation.
 
 
 Release 0.6.0 (Aug 13, 2026)
diff --git a/sqlparse/filters/output.py b/sqlparse/filters/output.py
index d4e20f29..7c16914e 100644
--- a/sqlparse/filters/output.py
+++ b/sqlparse/filters/output.py
@@ -117,7 +117,8 @@ def _process(self, stream, varname, has_nl):
             # quote cannot break out of the generated string literal
             # (GHSA-3496-9g83-7v6x).
             else:
-                token.value = token.value.replace('\\', '\\\\').replace('"', '\\"')
+                token.value = (token.value.replace('\\', '\\\\')
+                               .replace('"', '\\"').replace('$', '\\$'))
 
             # Put the token
             yield sql.Token(T.Text, token.value)
diff --git a/tests/test_format.py b/tests/test_format.py
index 93495067..bb6859b1 100644
--- a/tests/test_format.py
+++ b/tests/test_format.py
@@ -800,3 +800,14 @@ def test_strip_ws_removes_trailing_ws_in_groups():  # issue782
                                 strip_whitespace=True)
     expected = '(where foo = bar) from'
     assert formatted == expected
+
+
+@pytest.mark.parametrize('query, expected', [
+    ("SELECT '$name'", r'''$sql = "SELECT '\$name'";'''),
+    ('SELECT $body$text$body$', r'''$sql = "SELECT \$body\$text\$body\$";'''),
+    ('SELECT "$table"', r'''$sql = "SELECT \"\$table\"";'''),
+    ('SELECT 1 /* $name */', r'''$sql = "SELECT 1 /* \$name */";'''),
+    ("SELECT '\\$name'", r'''$sql = "SELECT '\\\$name'";'''),
+])
+def test_php_output_preserves_literal_dollar_signs(query, expected):
+    assert sqlparse.format(query, output_format='php') == expected