diff --git a/src/tmpfiles/tmpfiles.c b/src/tmpfiles/tmpfiles.c
index 518d8012da..e16f26d8d5 100644
--- a/src/tmpfiles/tmpfiles.c
+++ b/src/tmpfiles/tmpfiles.c
@@ -3358,7 +3358,7 @@ static int parse_line(
         r = extract_many_words(
                         &buffer,
                         NULL,
-                        EXTRACT_UNQUOTE,
+                        EXTRACT_UNQUOTE | EXTRACT_CUNESCAPE,
                         &action,
                         &path,
                         &mode,
diff --git a/test/units/testsuite-22.17.sh b/test/units/testsuite-22.17.sh
new file mode 100755
index 0000000000..f43aba5ad9
--- /dev/null
+++ b/test/units/testsuite-22.17.sh
@@ -0,0 +1,15 @@
+#!/bin/bash
+# SPDX-License-Identifier: LGPL-2.1-or-later
+#
+# Test for C-style escapes in file names and contents
+set -eux
+set -o pipefail
+
+data="\x20foo\nbar"
+dst="/tmp/x/\x20a\nb"
+
+systemd-tmpfiles --create - <<EOF
+f     "$dst" 0644 0 0 - $data
+EOF
+
+diff "$(printf "/tmp/x/\x20a\nb")" <(printf "\x20foo\nbar")