diff --git a/spring-web/src/main/java/org/springframework/web/util/UriComponents.java b/spring-web/src/main/java/org/springframework/web/util/UriComponents.java
index bc3281b959..a3658cb158 100644
--- a/spring-web/src/main/java/org/springframework/web/util/UriComponents.java
+++ b/spring-web/src/main/java/org/springframework/web/util/UriComponents.java
@@ -243,7 +243,7 @@ public abstract class UriComponents implements Serializable {
 
 	@Nullable
 	static String expandUriComponent(@Nullable String source, UriTemplateVariables uriVariables,
-			@Nullable UnaryOperator<String> variableEncoder) {
+			@Nullable UnaryOperator<String> encoder) {
 
 		if (source == null) {
 			return null;
@@ -258,15 +258,14 @@ public abstract class UriComponents implements Serializable {
 		StringBuffer sb = new StringBuffer();
 		while (matcher.find()) {
 			String match = matcher.group(1);
-			String variableName = getVariableName(match);
-			Object variablesValue = uriVariables.getValue(variableName);
-			if (UriTemplateVariables.SKIP_VALUE.equals(variablesValue)) {
+			String varName = getVariableName(match);
+			Object varValue = uriVariables.getValue(varName);
+			if (UriTemplateVariables.SKIP_VALUE.equals(varValue)) {
 				continue;
 			}
-			String formattedValue = getVariableValueAsString(variablesValue);
-			formattedValue = Matcher.quoteReplacement(formattedValue);
-			formattedValue = variableEncoder != null ? variableEncoder.apply(formattedValue) : formattedValue;
-			matcher.appendReplacement(sb, formattedValue);
+			String formatted = getVariableValueAsString(varValue);
+			formatted = encoder != null ? encoder.apply(formatted) : Matcher.quoteReplacement(formatted);
+			matcher.appendReplacement(sb, formatted);
 		}
 		matcher.appendTail(sb);
 		return sb.toString();
diff --git a/spring-web/src/test/java/org/springframework/web/util/UriComponentsTests.java b/spring-web/src/test/java/org/springframework/web/util/UriComponentsTests.java
index 1fd87a5856..59f701fa9c 100644
--- a/spring-web/src/test/java/org/springframework/web/util/UriComponentsTests.java
+++ b/spring-web/src/test/java/org/springframework/web/util/UriComponentsTests.java
@@ -74,6 +74,12 @@ public class UriComponentsTests {
 		assertEquals("/hotel%20list/Z%C3%BCrich%20specials?q=a%2Bb", uri.expand("a+b").toString());
 	}
 
+	@Test // SPR-17168
+	public void encodeAndExpandWithDollarSign() {
+		UriComponents uri = UriComponentsBuilder.fromPath("/path").queryParam("q", "{value}").encode().build();
+		assertEquals("/path?q=JavaClass%241.class", uri.expand("JavaClass$1.class").toString());
+	}
+
 	@Test
 	public void toUriEncoded() throws URISyntaxException {
 		UriComponents uriComponents = UriComponentsBuilder.fromUriString(