diff --git a/make/ide/vscode/hotspot/CreateVSCodeProject.gmk b/make/ide/vscode/hotspot/CreateVSCodeProject.gmk
index 8b82c38a751..bc56e878de6 100644
--- a/make/ide/vscode/hotspot/CreateVSCodeProject.gmk
+++ b/make/ide/vscode/hotspot/CreateVSCodeProject.gmk
@@ -29,6 +29,13 @@ default: all
 include $(SPEC)
 include MakeBase.gmk
 
+################################################################################
+# SedEscape
+#
+# Escape special characters for use in SED replacement string
+################################################################################
+SedEscape = $(subst !,\!,$(subst \,\\,$1))
+
 ################################################################################
 # Return the full path to an indexer-specific file fragment.
 #
@@ -78,15 +85,15 @@ define CreateFromTemplate
 	$(SED) -e '/{{INDEXER_EXTENSIONS}}/r $(call GetIndexerFragment,extensions)' \
 	    -e '/{{INDEXER_SETTINGS}}/r $(call GetIndexerFragment,settings)' \
 	    -e '/{{EXTRA_WORKSPACE_ROOT}}/r $(call GetExtraWorkspaceRoot)' $1 | \
-	$(SED) -e 's!{{TOPDIR}}!$(call FixPath,$(TOPDIR))!g' \
-	    -e 's!{{TOPDIR_RELATIVE}}!$(call FixPath,$(strip \
-	        $(call RelativePath,$(OUTPUTDIR),$(TOPDIR))))!g' \
-	    -e 's!{{WORKSPACE_ROOT}}!$(call FixPath,$(WORKSPACE_ROOT))!g' \
-	    -e 's!{{OUTPUTDIR}}!$(call FixPath,$(OUTPUTDIR))!g' \
+	$(SED) -e 's!{{TOPDIR}}!$(call SedEscape,$(call FixPath,$(TOPDIR)))!g' \
+	    -e 's!{{TOPDIR_RELATIVE}}!$(call SedEscape,$(call FixPath,$(strip \
+	        $(call RelativePath,$(OUTPUTDIR),$(TOPDIR)))))!g' \
+	    -e 's!{{WORKSPACE_ROOT}}!$(call SedEscape,$(call FixPath,$(WORKSPACE_ROOT)))!g' \
+	    -e 's!{{OUTPUTDIR}}!$(call SedEscape,$(call FixPath,$(OUTPUTDIR)))!g' \
 	    -e 's!{{CONF_NAME}}!$(CONF_NAME)!g' \
-	    -e 's!{{COMPILER}}!$(call FixPath,$(CXX)) $(SYSROOT_CFLAGS)!g' \
-	    -e 's!{{MAKE}}!$(call FixPath,$(MAKE))!g' \
-	    -e 's!{{PATH}}!$(call FixPath,$(PATH))!g' \
+	    -e 's!{{COMPILER}}!$(call SedEscape,$(call FixPath,$(CXX))) $(SYSROOT_CFLAGS)!g' \
+	    -e 's!{{MAKE}}!$(call SedEscape,$(call FixPath,$(MAKE)))!g' \
+	    -e 's!{{PATH}}!$(call SedEscape,$(call FixPath,$(PATH)))!g' \
 	    -e 's!{{DEBUGENGINENAME}}!$(call DebugEngineName)!g' \
 	    -e '/{{INDEXER_EXTENSIONS}}/d' \
 	    -e '/{{INDEXER_SETTINGS}}/d' \