diff --git a/news/changelog-1.6.md b/news/changelog-1.6.md
index 031785e216..c7e8ef1743 100644
--- a/news/changelog-1.6.md
+++ b/news/changelog-1.6.md
@@ -87,3 +87,4 @@ All changes included in 1.6:
 - ([#10552](https://github.com/quarto-dev/quarto-cli/issues/10552)): Add `contents` shortcode.
 - ([#10581](https://github.com/quarto-dev/quarto-cli/issues/10581)): Add `.landscape` div processing to `typst`, `docx` and `pdf` formats to support pages in landscape orientation.
 - ([#10591](https://github.com/quarto-dev/quarto-cli/issues/10591)): Make fenced div syntax slightly more robust by removing spaces around the `=` sign ahead of Pandoc's reader.
+- ([#10821](https://github.com/quarto-dev/quarto-cli/issues/10821)): Be more conservative in stripping `echo: fenced` from fenced output.
diff --git a/src/core/jupyter/jupyter.ts b/src/core/jupyter/jupyter.ts
index ee86aaa445..f246c0a4e3 100644
--- a/src/core/jupyter/jupyter.ts
+++ b/src/core/jupyter/jupyter.ts
@@ -1464,7 +1464,7 @@ async function mdFromCodeCell(
     let source = ld.cloneDeep(cell.source);
     if (fenced) {
       const optionsSource = cell.optionsSource.filter((line) =>
-        line.search(/echo:\s+fenced/) === -1
+        line.search(/\|\s+echo:\s+fenced\s*$/) === -1
       );
       if (optionsSource.length > 0) {
         source = trimEmptyLines(source, "trailing");
diff --git a/src/resources/rmd/hooks.R b/src/resources/rmd/hooks.R
index 6982d47280..530cbd11b3 100644
--- a/src/resources/rmd/hooks.R
+++ b/src/resources/rmd/hooks.R
@@ -462,7 +462,7 @@ knitr_hooks <- function(format, resourceDir, handledLanguages) {
       lang <- NULL
       yamlCode <- lastYamlCode
       if (!is.null(yamlCode)) {
-        yamlCode <- Filter(function(line) !grepl("echo:\\s+fenced", line), yamlCode)
+        yamlCode <- Filter(function(line) !grepl("\\|\\s+echo:\\s+fenced\\s*$", line), yamlCode)
         yamlCode <- paste(yamlCode, collapse = "\n")
         if (!nzchar(yamlCode)) {
           x <- trimws(x, "left")
diff --git a/tests/docs/smoke-all/2024/09/24/issue-10821-b.qmd b/tests/docs/smoke-all/2024/09/24/issue-10821-b.qmd
new file mode 100644
index 0000000000..434e98a14c
--- /dev/null
+++ b/tests/docs/smoke-all/2024/09/24/issue-10821-b.qmd
@@ -0,0 +1,19 @@
+---
+title: issue-10821
+format: html
+_quarto:
+  tests:
+    html:
+      ensureFileRegexMatches:
+        - ['<span class="in">#\| fig-cap: ''This figure will have ''''echo: fenced'''' in its caption.''</span>']
+        - []
+        # - ['fig-cap']
+---
+
+```{python}
+#| echo: fenced
+#| label: fig-1
+#| fig-cap: "This figure will have 'echo: fenced' in its caption."
+import matplotlib.pyplot as plt
+plt.plot([1,2,3])
+```
diff --git a/tests/docs/smoke-all/2024/09/24/issue-10821.qmd b/tests/docs/smoke-all/2024/09/24/issue-10821.qmd
new file mode 100644
index 0000000000..5fb8830a28
--- /dev/null
+++ b/tests/docs/smoke-all/2024/09/24/issue-10821.qmd
@@ -0,0 +1,18 @@
+---
+title: issue-10821
+format: html
+_quarto:
+  tests:
+    html:
+      ensureFileRegexMatches:
+        - ['<span class="in">#\| fig-cap: "This figure will have ''echo: fenced'' in its caption."</span>']
+        - []
+---
+
+```{r}
+#| echo: fenced
+#| whatever: "echo: fenced"
+#| fig-cap: "This figure will have 'echo: fenced' in its caption."
+#| label: fig-1
+plot(1:100)
+```