diff --git a/hack/make-rules/test-integration.sh b/hack/make-rules/test-integration.sh
index b69124df07c..1206b7d0d89 100755
--- a/hack/make-rules/test-integration.sh
+++ b/hack/make-rules/test-integration.sh
@@ -68,10 +68,12 @@ runTests() {
   kube::log::status "Running integration test cases"
 
   KUBE_RACE="-race"
-  make -C "${KUBE_ROOT}" test \
+  # KUBE_TEST_ARGS may contain '$' character which has special meaning in make,
+  # pass it through process environment instead.
+  KUBE_TEST_ARGS="${KUBE_TEST_ARGS:-} ${SHORT:--short=true} --vmodule=${KUBE_TEST_VMODULE} --alsologtostderr=true" \
+    make -C "${KUBE_ROOT}" test \
       WHAT="${WHAT:-$(kube::test::find_integration_test_dirs | paste -sd' ' -)}" \
       GOFLAGS="${GOFLAGS:-}" \
-      KUBE_TEST_ARGS="${KUBE_TEST_ARGS:-} ${SHORT:--short=true} --vmodule=${KUBE_TEST_VMODULE} --alsologtostderr=true" \
       KUBE_RACE="" \
       KUBE_TIMEOUT="${KUBE_TIMEOUT}" \
       KUBE_TEST_API_VERSIONS="$1"