diff --git a/os_client_config/config.py b/os_client_config/config.py
index 4c054bf..ce4f045 100644
--- a/os_client_config/config.py
+++ b/os_client_config/config.py
@@ -69,6 +69,8 @@ VENDOR_FILES = [
 
 BOOL_KEYS = ('insecure', 'cache')
 
+FORMAT_EXCLUSIONS = frozenset(['password'])
+
 
 # NOTE(dtroyer): This turns out to be not the best idea so let's move
 #                overriding defaults to a kwarg to OpenStackConfig.__init__()
@@ -1089,7 +1091,7 @@ class OpenStackConfig(object):
 
         # If any of the defaults reference other values, we need to expand
         for (key, value) in config.items():
-            if hasattr(value, 'format'):
+            if hasattr(value, 'format') and key not in FORMAT_EXCLUSIONS:
                 config[key] = value.format(**config)
 
         force_ipv4 = config.pop('force_ipv4', self.force_ipv4)
@@ -1184,7 +1186,7 @@ class OpenStackConfig(object):
 
         # If any of the defaults reference other values, we need to expand
         for (key, value) in config.items():
-            if hasattr(value, 'format'):
+            if hasattr(value, 'format') and key not in FORMAT_EXCLUSIONS:
                 config[key] = value.format(**config)
 
         force_ipv4 = config.pop('force_ipv4', self.force_ipv4)
diff --git a/os_client_config/tests/test_config.py b/os_client_config/tests/test_config.py
index 5a8a99c..8ea6ee1 100644
--- a/os_client_config/tests/test_config.py
+++ b/os_client_config/tests/test_config.py
@@ -376,6 +376,66 @@ class TestConfig(base.TestCase):
         self.assertEqual(region, {'name': 'no-cloud-region', 'values': {}})
 
 
+class TestExcludedFormattedConfigValue(base.TestCase):
+    # verify LaunchPad bug #1635696
+    #
+    # get_one_cloud() and get_one_cloud_osc() iterate over config
+    # values and try to expand any variables in those values by
+    # calling value.format(), however some config values
+    # (e.g. password) should never have format() applied to them, not
+    # only might that change the password but it will also cause the
+    # format() function to raise an exception if it can not parse the
+    # format string. Examples would be single brace (e.g. 'foo{')
+    # which raises an ValueError because it's looking for a matching
+    # end brace or a brace pair with a key value that cannot be found
+    # (e.g. 'foo{bar}') which raises a KeyError.
+
+    def setUp(self):
+        super(TestExcludedFormattedConfigValue, self).setUp()
+
+        self.args = dict(
+            auth_url='http://example.com/v2',
+            username='user',
+            project_name='project',
+            region_name='region2',
+            snack_type='cookie',
+            os_auth_token='no-good-things',
+        )
+
+        self.options = argparse.Namespace(**self.args)
+
+    def test_get_one_cloud_password_brace(self):
+        c = config.OpenStackConfig(config_files=[self.cloud_yaml],
+                                   vendor_files=[self.vendor_yaml])
+
+        password = 'foo{'       # Would raise ValueError, single brace
+        self.options.password = password
+        cc = c.get_one_cloud(
+            cloud='_test_cloud_regions', argparse=self.options, validate=False)
+        self.assertEqual(cc.password, password)
+
+        password = 'foo{bar}'   # Would raise KeyError, 'bar' not found
+        self.options.password = password
+        cc = c.get_one_cloud(
+            cloud='_test_cloud_regions', argparse=self.options, validate=False)
+        self.assertEqual(cc.password, password)
+
+    def test_get_one_cloud_osc_password_brace(self):
+        c = config.OpenStackConfig(config_files=[self.cloud_yaml],
+                                   vendor_files=[self.vendor_yaml])
+        password = 'foo{'       # Would raise ValueError, single brace
+        self.options.password = password
+        cc = c.get_one_cloud_osc(
+            cloud='_test_cloud_regions', argparse=self.options, validate=False)
+        self.assertEqual(cc.password, password)
+
+        password = 'foo{bar}'   # Would raise KeyError, 'bar' not found
+        self.options.password = password
+        cc = c.get_one_cloud_osc(
+            cloud='_test_cloud_regions', argparse=self.options, validate=False)
+        self.assertEqual(cc.password, password)
+
+
 class TestConfigArgparse(base.TestCase):
 
     def setUp(self):