diff --git a/CHANGELOG.md b/CHANGELOG.md
index ae4085ee6..3ec563956 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,6 +8,7 @@
 * Add checkboxes to graphic insertion wizard for relative width or height
 
 ### Fixed
+* Fix parse error when using commands with arguments in parameter of \href or \url
 * Fix parse error when using parentheses in a group in a key value command argument
 
 ## [0.9.10-alpha.4] - 2024-12-21
diff --git a/src/nl/hannahsten/texifyidea/grammar/LatexLexer.flex b/src/nl/hannahsten/texifyidea/grammar/LatexLexer.flex
index 035ef11e0..e9fc6686c 100644
--- a/src/nl/hannahsten/texifyidea/grammar/LatexLexer.flex
+++ b/src/nl/hannahsten/texifyidea/grammar/LatexLexer.flex
@@ -42,6 +42,7 @@ import static nl.hannahsten.texifyidea.psi.LatexTypes.*;
    */
   private int verbatimOptionalArgumentBracketsCount = 0;
   private int verbatimRequiredArgumentBracketsCount = 0;
+  private int verbatimUrlBracesCount = 0;
 
   /**
    * Keep track of braces in the PARTIAL_DEFINITION state.
@@ -98,10 +99,11 @@ PLAIN_VERBATIM_COMMAND=\\verb | \\verb\* | \\path
 
 // Verbatim commands which can also have normal optional/required parameters (or a same-character delimiter)
 VERBATIM_COMMAND=\\directlua | \\luaexec | \\lstinline
- // These can contain unescaped % for example.
- | \\url | \\href
  // PythonTex Python code commands
  | \\py | \\pyb | \\pyc | \\pys | \\pyv
+// These can contain unescaped # and %, but braces have to be balanced
+URL_COMMAND=\\url | \\href
+
 // Commands which are partial definitions, in the sense that they define only the begin or end of a pair of definitions, and thus can contain \begin commands without \end, or single $
 PARTIAL_DEFINITION_COMMAND=(\\pretitle|\\posttitle|\\preauthor|\\postauthor|\\predate|\\postdate)
 
@@ -143,7 +145,7 @@ END_IFS=\\fi
 
 // Every inline verbatim delimiter gets a separate state, to avoid quitting the state too early due to delimiter confusion
 // States are exclusive to avoid matching expressions with an empty set of associated states, i.e. to avoid matching normal LaTeX expressions
-%xstates INLINE_VERBATIM_PLAIN_START INLINE_VERBATIM INLINE_VERBATIM_NORMAL_START
+%xstates INLINE_VERBATIM_PLAIN_START INLINE_VERBATIM INLINE_VERBATIM_NORMAL_START URL_VERBATIM
 
 %states POSSIBLE_VERBATIM_BEGIN VERBATIM_OPTIONAL_ARG VERBATIM_REQUIRED_ARG VERBATIM_START VERBATIM_END INLINE_VERBATIM_OPTIONAL_ARG
 %xstates VERBATIM POSSIBLE_VERBATIM_ARG POSSIBLE_VERBATIM_END
@@ -163,6 +165,7 @@ END_IFS=\\fi
 // Use a separate state to start verbatim, to be able to return a command token for \verb
 {PLAIN_VERBATIM_COMMAND}  { yypushState(INLINE_VERBATIM_PLAIN_START); return COMMAND_TOKEN; }
 {VERBATIM_COMMAND}        { yypushState(INLINE_VERBATIM_NORMAL_START); return COMMAND_TOKEN; }
+{URL_COMMAND}             { verbatimUrlBracesCount = 0; yypushState(URL_VERBATIM); return COMMAND_TOKEN; }
 
 // This is like INLINE_VERBATIM_START, but because lstinline supports normal optional/required parameters instead of two of the same delimiters,
 // it is a separate state so that other verbatim commands are unlikely to be picked up incorrectly
@@ -210,6 +213,16 @@ END_IFS=\\fi
     [^]                 { return com.intellij.psi.TokenType.BAD_CHARACTER; }
 }
 
+<URL_VERBATIM> {
+    {OPEN_BRACE}        { verbatimUrlBracesCount++; return OPEN_BRACE; }
+    {CLOSE_BRACE}       { verbatimUrlBracesCount--; if (verbatimUrlBracesCount == 0) { yypopState(); } return CLOSE_BRACE; }
+    // There can be whitespace between command and argument
+    {WHITE_SPACE}       { return com.intellij.psi.TokenType.WHITE_SPACE; }
+    {ANY_CHAR}          { return RAW_TEXT_TOKEN; }
+    // Because the state is exclusive, we have to handle bad characters here as well (in case of an open \verb|... for example)
+    [^]                 { return com.intellij.psi.TokenType.BAD_CHARACTER; }
+}
+
 /*
  * Verbatim environments
  */
diff --git a/test/nl/hannahsten/texifyidea/psi/LatexParserTest.kt b/test/nl/hannahsten/texifyidea/psi/LatexParserTest.kt
index a3f2378b4..b2ca8725f 100644
--- a/test/nl/hannahsten/texifyidea/psi/LatexParserTest.kt
+++ b/test/nl/hannahsten/texifyidea/psi/LatexParserTest.kt
@@ -26,6 +26,8 @@ class LatexParserTest : BasePlatformTestCase() {
             \newcolumntype{P}[1]{>{\raggedright\arraybackslash}p{#1}}
             
             \anycommand{test = {Some text with (Round Brackets)}}
+            
+            \href{\thefield{#%}}{#1}
             """.trimIndent()
         )
         myFixture.checkHighlighting()