diff --git a/guix/utils.scm b/guix/utils.scm
index ded31142aab2741c3dd99e1c6eacc2ecb0fc3c02..decadf64a600558732642a86a643c464a95794d0 100644
--- a/guix/utils.scm
+++ b/guix/utils.scm
@@ -375,13 +375,24 @@ (define (default-keyword-arguments args defaults)
       (()
        args))))
 
+(define-syntax collect-default-args
+  (syntax-rules ()
+    ((_)
+     '())
+    ((_ (_ _) rest ...)
+     (collect-default-args rest ...))
+    ((_ (kw _ dflt) rest ...)
+     (cons* kw dflt (collect-default-args rest ...)))))
+
 (define-syntax substitute-keyword-arguments
   (syntax-rules ()
     "Return a new list of arguments where the value for keyword arg KW is
-replaced by EXP.  EXP is evaluated in a context where VAR is boud to the
-previous value of the keyword argument."
-    ((_ original-args ((kw var) exp) ...)
-     (let loop ((args    original-args)
+replaced by EXP.  EXP is evaluated in a context where VAR is bound to the
+previous value of the keyword argument, or DFLT if given."
+    ((_ original-args ((kw var dflt ...) exp) ...)
+     (let loop ((args (default-keyword-arguments
+                        original-args
+                        (collect-default-args (kw var dflt ...) ...)))
                 (before '()))
        (match args
          ((kw var rest (... ...))
diff --git a/tests/utils.scm b/tests/utils.scm
index 960928c842f36fe0a16f771922a683db078d9764..bcfaa14faac0041b2739ad3b32e2be42eb1ef67f 100644
--- a/tests/utils.scm
+++ b/tests/utils.scm
@@ -123,6 +123,26 @@ (define temp-file
         (default-keyword-arguments '(#:bar 3) '(#:foo 2))
         (default-keyword-arguments '(#:foo 2 #:bar 3) '(#:bar 6))))
 
+(test-equal "substitute-keyword-arguments"
+  '((#:foo 3)
+    (#:foo 3)
+    (#:foo 3 #:bar (1 2))
+    (#:bar (1 2) #:foo 3)
+    (#:foo 3))
+  (list (substitute-keyword-arguments '(#:foo 2)
+          ((#:foo f) (1+ f)))
+        (substitute-keyword-arguments '()
+          ((#:foo f 2) (1+ f)))
+        (substitute-keyword-arguments '(#:foo 2 #:bar (2))
+          ((#:foo f) (1+ f))
+          ((#:bar b) (cons 1 b)))
+        (substitute-keyword-arguments '(#:foo 2)
+          ((#:foo _) 3)
+          ((#:bar b '(2)) (cons 1 b)))
+        (substitute-keyword-arguments '(#:foo 2)
+          ((#:foo f 1) (1+ f))
+          ((#:bar b) (cons 42 b)))))
+
 (test-assert "filtered-port, file"
   (let* ((file  (search-path %load-path "guix.scm"))
          (input (open-file file "r0b")))