diff --git a/service/lib/agama/cmdline_args.rb b/service/lib/agama/cmdline_args.rb
index ffd104a71c..2863f86856 100644
--- a/service/lib/agama/cmdline_args.rb
+++ b/service/lib/agama/cmdline_args.rb
@@ -43,7 +43,7 @@ def self.read_from(path)
       options.split.each do |option|
         next unless option.start_with?(CMDLINE_PREFIX)
 
-        key, value = option.split("=")
+        key, value = option.split("=", 2)
         key.gsub!(CMDLINE_PREFIX, "")
         # Omit config_url from Config options
         next args.config_url = value if key == "config_url"
diff --git a/service/package/rubygem-agama-yast.changes b/service/package/rubygem-agama-yast.changes
index 73e1b06740..e24aa09ae9 100644
--- a/service/package/rubygem-agama-yast.changes
+++ b/service/package/rubygem-agama-yast.changes
@@ -1,3 +1,9 @@
+-------------------------------------------------------------------
+Tue Dec  3 20:32:08 UTC 2024 - Josef Reidinger <jreidinger@suse.com>
+
+- Fix parsing agama.install_url that contain '='
+  (gh#agama-project/agama#1803)
+
 -------------------------------------------------------------------
 Tue Dec  3 16:43:08 UTC 2024 - Imobach Gonzalez Sosa <igonzalezsosa@suse.com>
 
diff --git a/service/test/agama/cmdline_args_test.rb b/service/test/agama/cmdline_args_test.rb
index d5048900e3..fee3a392f8 100644
--- a/service/test/agama/cmdline_args_test.rb
+++ b/service/test/agama/cmdline_args_test.rb
@@ -29,8 +29,28 @@
   describe ".read_from" do
     it "reads the kernel command line options and return a CmdlineArgs object" do
       args = described_class.read_from(File.join(workdir, "/proc/cmdline"))
-      expect(args.data).to eql("web" => { "ssl" => true })
+      expect(args.data["auto"]).to eq("http://mydomain.org/tumbleweed.jsonnet")
+    end
+
+    it "sets #config_url if specified on cmdline" do
+      args = described_class.read_from(File.join(workdir, "/proc/cmdline"))
       expect(args.config_url).to eql("http://example.org/agama.yaml")
     end
+
+    it "converts 'true' and  'false' values into booleans" do
+      args = described_class.read_from(File.join(workdir, "/proc/cmdline"))
+      expect(args.data["web"]).to eql({ "ssl" => true })
+    end
+
+    it "converts keys with dots after 'agama.' to hash" do
+      args = described_class.read_from(File.join(workdir, "/proc/cmdline"))
+      # here fixture has agama.web.ssl=true and result is this hash
+      expect(args.data["web"]).to eq({ "ssl" => true })
+    end
+
+    it "properly parse values that contain '='" do
+      args = described_class.read_from(File.join(workdir, "/proc/cmdline"))
+      expect(args.data["install_url"]).to eq("cd:/?devices=/dev/sr1")
+    end
   end
 end
diff --git a/service/test/fixtures/root_dir/proc/cmdline b/service/test/fixtures/root_dir/proc/cmdline
index 1943d63962..425b336d2b 100644
--- a/service/test/fixtures/root_dir/proc/cmdline
+++ b/service/test/fixtures/root_dir/proc/cmdline
@@ -1 +1 @@
-agama.config_url=http://example.org/agama.yaml agama.web.ssl=true
+agama.config_url=http://example.org/agama.yaml agama.web.ssl=true agama.install_url=cd:/?devices=/dev/sr1 agama.auto=http://mydomain.org/tumbleweed.jsonnet