diff --git a/crates/bashkit/src/interpreter/mod.rs b/crates/bashkit/src/interpreter/mod.rs
index 043c007d..dc35fef2 100644
--- a/crates/bashkit/src/interpreter/mod.rs
+++ b/crates/bashkit/src/interpreter/mod.rs
@@ -3394,6 +3394,18 @@ impl Interpreter {
                 self.variables.remove(&marker);
             }
 
+            // Post-process: shift builtin updates positional parameters
+            if let Some(shift_str) = self.variables.remove("_SHIFT_COUNT") {
+                let n: usize = shift_str.parse().unwrap_or(1);
+                if let Some(frame) = self.call_stack.last_mut() {
+                    if n <= frame.positional.len() {
+                        frame.positional.drain(..n);
+                    } else {
+                        frame.positional.clear();
+                    }
+                }
+            }
+
             // Handle output redirections
             return self.apply_redirections(result, &command.redirects).await;
         }
diff --git a/crates/bashkit/tests/issue_290_test.rs b/crates/bashkit/tests/issue_290_test.rs
new file mode 100644
index 00000000..bd88838f
--- /dev/null
+++ b/crates/bashkit/tests/issue_290_test.rs
@@ -0,0 +1,38 @@
+//! Regression test for #290: while/case arg parsing hits MaxLoopIterations
+
+use bashkit::Bash;
+use std::path::Path;
+
+#[tokio::test]
+async fn issue_290_while_case_shift_loop() {
+    let mut bash = Bash::new();
+    let fs = bash.fs();
+    fs.write_file(
+        Path::new("/parse_args.sh"),
+        b"#!/bin/bash\nset -e\n\nwhile [[ $# -gt 0 ]]; do\n    case $1 in\n        --name)\n            NAME=\"$2\"\n            shift 2\n            ;;\n        --value)\n            VALUE=\"$2\"\n            shift 2\n            ;;\n        *)\n            echo \"Unknown: $1\"\n            exit 1\n            ;;\n    esac\ndone\n\necho \"name=$NAME value=$VALUE\"",
+    )
+    .await
+    .unwrap();
+    fs.chmod(Path::new("/parse_args.sh"), 0o755).await.unwrap();
+    let r = bash
+        .exec("/parse_args.sh --name foo --value bar")
+        .await
+        .unwrap();
+    assert_eq!(r.stdout.trim(), "name=foo value=bar");
+    assert_eq!(r.exit_code, 0);
+}
+
+#[tokio::test]
+async fn issue_290_shift_1_default() {
+    let mut bash = Bash::new();
+    let fs = bash.fs();
+    fs.write_file(
+        Path::new("/shift1.sh"),
+        b"#!/bin/bash\nwhile [[ $# -gt 0 ]]; do\n    echo \"$1\"\n    shift\ndone",
+    )
+    .await
+    .unwrap();
+    fs.chmod(Path::new("/shift1.sh"), 0o755).await.unwrap();
+    let r = bash.exec("/shift1.sh a b c").await.unwrap();
+    assert_eq!(r.stdout.trim(), "a\nb\nc");
+}