diff --git a/usr.sbin/ppp/auth.c b/usr.sbin/ppp/auth.c
index cc22b5e91523..62a525f1e4d9 100644
--- a/usr.sbin/ppp/auth.c
+++ b/usr.sbin/ppp/auth.c
@@ -117,7 +117,7 @@ auth_SetPhoneList(const char *name, char *phone, int phonelen)
         continue;
       buff[strlen(buff) - 1] = '\0';
       memset(vector, '\0', sizeof vector);
-      if ((n = MakeArgs(buff, vector, VECSIZE(vector), 1)) < 0)
+      if ((n = MakeArgs(buff, vector, VECSIZE(vector), PARSE_REDUCE)) < 0)
         log_Printf(LogWARN, "%s: %d: Invalid line\n", SECRETFILE, lineno);
       if (n < 5)
         continue;
@@ -168,7 +168,7 @@ auth_Select(struct bundle *bundle, const char *name)
         continue;
       buff[strlen(buff) - 1] = '\0';
       memset(vector, '\0', sizeof vector);
-      if ((n = MakeArgs(buff, vector, VECSIZE(vector), 1)) < 0)
+      if ((n = MakeArgs(buff, vector, VECSIZE(vector), PARSE_REDUCE)) < 0)
         log_Printf(LogWARN, "%s: %d: Invalid line\n", SECRETFILE, lineno);
       if (n < 2)
         continue;
@@ -227,7 +227,7 @@ auth_Validate(struct bundle *bundle, const char *name,
         continue;
       buff[strlen(buff) - 1] = 0;
       memset(vector, '\0', sizeof vector);
-      if ((n = MakeArgs(buff, vector, VECSIZE(vector), 1)) < 0)
+      if ((n = MakeArgs(buff, vector, VECSIZE(vector), PARSE_REDUCE)) < 0)
         log_Printf(LogWARN, "%s: %d: Invalid line\n", SECRETFILE, lineno);
       if (n < 2)
         continue;
@@ -271,7 +271,7 @@ auth_GetSecret(struct bundle *bundle, const char *name, int len,
     if (buff[n] == '\n')
       buff[n] = '\0';	/* Trim the '\n' */
     memset(vector, '\0', sizeof vector);
-    if ((n = MakeArgs(buff, vector, VECSIZE(vector), 1)) < 0)
+    if ((n = MakeArgs(buff, vector, VECSIZE(vector), PARSE_REDUCE)) < 0)
       log_Printf(LogWARN, "%s: %d: Invalid line\n", SECRETFILE, lineno);
     if (n < 2)
       continue;
diff --git a/usr.sbin/ppp/chat.c b/usr.sbin/ppp/chat.c
index 499bc980b9a1..c6acdb1df38b 100644
--- a/usr.sbin/ppp/chat.c
+++ b/usr.sbin/ppp/chat.c
@@ -561,7 +561,7 @@ chat_Setup(struct chat *c, const char *data, const char *phone)
   } else {
     strncpy(c->script, data, sizeof c->script - 1);
     c->script[sizeof c->script - 1] = '\0';
-    c->argc = MakeArgs(c->script, c->argv, VECSIZE(c->argv), 0);
+    c->argc = MakeArgs(c->script, c->argv, VECSIZE(c->argv), PARSE_NOHASH);
   }
 
   c->arg = -1;
@@ -702,7 +702,8 @@ ExecStr(struct physical *physical, char *command, char *out, int olen)
   int stat, nb, argc, i;
 
   log_Printf(LogCHAT, "Exec: %s\n", command);
-  if ((argc = MakeArgs(command, vector, VECSIZE(vector), 1)) <= 0) {
+  if ((argc = MakeArgs(command, vector, VECSIZE(vector),
+                       PARSE_REDUCE|PARSE_NOHASH)) <= 0) {
     if (argc < 0)
       log_Printf(LogWARN, "Syntax error in exec command\n");
     *out = '\0';
diff --git a/usr.sbin/ppp/command.c b/usr.sbin/ppp/command.c
index 5ec071a7ae82..98ad92b53691 100644
--- a/usr.sbin/ppp/command.c
+++ b/usr.sbin/ppp/command.c
@@ -913,7 +913,7 @@ command_Interpret(char *buff, int nb, char *argv[MAXARGS])
     cp = buff + strcspn(buff, "\r\n");
     if (cp)
       *cp = '\0';
-    return MakeArgs(buff, argv, MAXARGS, 1);
+    return MakeArgs(buff, argv, MAXARGS, PARSE_REDUCE);
   }
   return 0;
 }
diff --git a/usr.sbin/ppp/defs.c b/usr.sbin/ppp/defs.c
index 31d355e2b802..bf7492d21baa 100644
--- a/usr.sbin/ppp/defs.c
+++ b/usr.sbin/ppp/defs.c
@@ -264,14 +264,14 @@ IntToSpeed(int nspeed)
 }
 
 char *
-findblank(char *p, int reduce)
+findblank(char *p, int flags)
 {
   int instring;
 
   instring = 0;
   while (*p) {
     if (*p == '\\') {
-      if (reduce) {
+      if (flags & PARSE_REDUCE) {
         memmove(p, p + 1, strlen(p));
         if (!*p)
           break;
@@ -281,7 +281,8 @@ findblank(char *p, int reduce)
       memmove(p, p + 1, strlen(p));
       instring = !instring;
       continue;
-    } else if (!instring && (issep(*p) || *p == '#'))
+    } else if (!instring && (issep(*p) ||
+                             (*p == '#' && !(flags & PARSE_NOHASH))))
       return p;
     p++;
   }
@@ -290,7 +291,7 @@ findblank(char *p, int reduce)
 }
 
 int
-MakeArgs(char *script, char **pvect, int maxargs, int reduce)
+MakeArgs(char *script, char **pvect, int maxargs, int flags)
 {
   int nargs;
 
@@ -302,7 +303,7 @@ MakeArgs(char *script, char **pvect, int maxargs, int reduce)
 	break;
       *pvect++ = script;
       nargs++;
-      script = findblank(script, reduce);
+      script = findblank(script, flags);
       if (script == NULL)
         return -1;
       else if (*script == '#')
diff --git a/usr.sbin/ppp/defs.h b/usr.sbin/ppp/defs.h
index 2cd375bb0619..a47c12eb4cd8 100644
--- a/usr.sbin/ppp/defs.h
+++ b/usr.sbin/ppp/defs.h
@@ -91,6 +91,11 @@
 #define PHYS_FOREGROUND		64 /* Pseudo mode, same as background */
 #define PHYS_ALL		127
 
+/* flags passed to findblank() and MakeArgs() */
+#define PARSE_NORMAL	0
+#define PARSE_REDUCE	1
+#define PARSE_NOHASH	2
+
 extern void randinit(void);
 extern ssize_t fullread(int, void *, size_t);
 extern const char *mode2Nam(int);
diff --git a/usr.sbin/ppp/exec.c b/usr.sbin/ppp/exec.c
index cc899644b99a..e9bf01a1db5d 100644
--- a/usr.sbin/ppp/exec.c
+++ b/usr.sbin/ppp/exec.c
@@ -141,7 +141,8 @@ exec_Create(struct physical *p)
 
           log_Printf(LogDEBUG, "Exec'ing ``%s''\n", p->name.base);
 
-          if ((argc = MakeArgs(p->name.base, argv, VECSIZE(argv), 1)) < 0) {
+          if ((argc = MakeArgs(p->name.base, argv, VECSIZE(argv),
+                               PARSE_REDUCE|PARSE_NOHASH)) < 0) {
             log_Printf(LogWARN, "Syntax error in exec command\n");
             _exit(127);
           }
diff --git a/usr.sbin/ppp/systems.c b/usr.sbin/ppp/systems.c
index 9574648212e9..a570ceb6253c 100644
--- a/usr.sbin/ppp/systems.c
+++ b/usr.sbin/ppp/systems.c
@@ -265,28 +265,22 @@ xgets(char *buf, int buflen, FILE *fp)
 static char *
 GetLabel(char *line, const char *filename, int linenum)
 {
-  char *wp;
+  char *argv[MAXARGS];
+  int argc, len;
 
-  if ((wp = findblank(line, 1)) != NULL) {
-    while (issep(*wp))
-      *wp++ = '\0';
-    if (*wp == '#')
-      *wp = '\0';
-    if (*wp != '\0') {
-      log_Printf(LogWARN, "Bad label in %s (line %d) - too many words.\n",
-                   filename, linenum);
-      return NULL;
-    }
-  }
-  wp = strchr(line, ':');
-  if (wp == NULL || wp[1] != '\0') {
-      log_Printf(LogWARN, "Bad rule in %s (line %d) - missing colon.\n",
+  argc = MakeArgs(line, argv, MAXARGS, PARSE_REDUCE);
+
+  if (argc == 2 && !strcmp(argv[1], ":"))
+    return argv[0];
+
+  if (argc != 1 || (len = strlen(argv[0])) < 2 || argv[0][len-1] != ':') {
+      log_Printf(LogWARN, "Bad label in %s (line %d) - missing colon\n",
                  filename, linenum);
       return NULL;
   }
-  *wp = '\0';
+  argv[0][len-1] = '\0';	/* Lose the ':' */
 
-  return line;
+  return argv[0];
 }
 
 /* Returns -2 for ``file not found'' and -1 for ``label not found'' */
@@ -349,7 +343,6 @@ ReadSystem(struct bundle *bundle, const char *name, const char *file,
     default:
       if ((cp = GetLabel(cp, filename, linenum)) == NULL)
         continue;
-      cp = strip(cp);  /* lose any spaces between the label and the ':' */
 
       if (strcmp(cp, name) == 0) {
         /* We're in business */
@@ -365,7 +358,7 @@ ReadSystem(struct bundle *bundle, const char *name, const char *file,
 
           if (!indent) {			/* start of next section */
             if (*cp != '!' && how == SYSTEM_EXEC)
-              GetLabel(cp, filename, linenum);
+              cp = GetLabel(cp, filename, linenum);
             break;
           }