diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1308ec73e..8c2af39e5 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -11,6 +11,8 @@
   - Vagrant source now has a `contrib` directory where contributions of miscellaneous
     addons for Vagrant will be added.
   - Vagrantfiles are now loaded only once (instead of 4+ times) [GH-238]
+  - Ability to move home vagrant dir (~/.vagrant) by setting VAGRANT_HOME
+    environmental variable.
 
 ## 0.7.0.beta (December 24, 2010)
 
diff --git a/config/default.rb b/config/default.rb
index 99a58a4d6..f313af3b8 100644
--- a/config/default.rb
+++ b/config/default.rb
@@ -1,7 +1,6 @@
 Vagrant::Config.run do |config|
   # default config goes here
   config.vagrant.dotfile_name = ".vagrant"
-  config.vagrant.home = "~/.vagrant"
   config.vagrant.host = :detect
 
   config.ssh.username = "vagrant"
diff --git a/lib/vagrant/config/vagrant.rb b/lib/vagrant/config/vagrant.rb
index ee4856e0b..545ec4859 100644
--- a/lib/vagrant/config/vagrant.rb
+++ b/lib/vagrant/config/vagrant.rb
@@ -4,15 +4,10 @@ module Vagrant
       configures :vagrant
 
       attr_accessor :dotfile_name
-      attr_accessor :home
       attr_accessor :host
 
-      def initialize
-        @home = nil
-      end
-
       def validate(errors)
-        [:dotfile_name, :home, :host].each do |field|
+        [:dotfile_name, :host].each do |field|
           errors.add(I18n.t("vagrant.config.common.error_empty", :field => field)) if !instance_variable_get("@#{field}".to_sym)
         end
       end
diff --git a/lib/vagrant/environment.rb b/lib/vagrant/environment.rb
index 73bc26cf8..f10bf12f6 100644
--- a/lib/vagrant/environment.rb
+++ b/lib/vagrant/environment.rb
@@ -9,6 +9,7 @@ module Vagrant
     ROOTFILE_NAME = "Vagrantfile"
     HOME_SUBDIRS = ["tmp", "boxes", "logs"]
     DEFAULT_VM = :default
+    DEFAULT_HOME = "~/.vagrant"
 
     # Parent environment (in the case of multi-VMs)
     attr_reader :parent
@@ -82,12 +83,11 @@ module Vagrant
       root_path.join(config.vagrant.dotfile_name) rescue nil
     end
 
-    # The path to the home directory, expanded relative to the root path,
-    # and converted into a Pathname object.
+    # The path to the home directory and converted into a Pathname object.
     #
     # @return [Pathname]
     def home_path
-      @_home_path ||= Pathname.new(File.expand_path(config.vagrant.home, root_path))
+      @_home_path ||= Pathname.new(File.expand_path(ENV["VAGRANT_HOME"] || DEFAULT_HOME))
     end
 
     # The path to the Vagrant tmp directory
diff --git a/lib/vagrant/test_helpers.rb b/lib/vagrant/test_helpers.rb
index 231d66005..72cb58849 100644
--- a/lib/vagrant/test_helpers.rb
+++ b/lib/vagrant/test_helpers.rb
@@ -31,8 +31,8 @@ module Vagrant
 
       str  = args.shift || ""
       File.open(path.to_s, "w") do |f|
+        f.puts "ENV['VAGRANT_HOME'] = '#{home_path}'"
         f.puts "Vagrant::Config.run do |config|"
-        f.puts "config.vagrant.home = '#{home_path}'"
         f.puts "config.vm.base_mac = 'foo' if !config.vm.base_mac"
         f.puts "config.vm.box = 'base'"
         f.puts str
diff --git a/test/vagrant/config/vagrant_test.rb b/test/vagrant/config/vagrant_test.rb
index a2436dee0..4ca3091e6 100644
--- a/test/vagrant/config/vagrant_test.rb
+++ b/test/vagrant/config/vagrant_test.rb
@@ -8,7 +8,6 @@ class ConfigVagrantTest < Test::Unit::TestCase
   context "validation" do
     setup do
       @config.dotfile_name = "foo"
-      @config.home = "foo"
       @config.host = "foo"
 
       @errors = Vagrant::Config::ErrorRecorder.new
@@ -26,13 +25,6 @@ class ConfigVagrantTest < Test::Unit::TestCase
       assert !@errors.errors.empty?
     end
 
-    should "be invalid with no home" do
-      @config.home = nil
-
-      @config.validate(@errors)
-      assert !@errors.errors.empty?
-    end
-
     should "be invalid with no host" do
       @config.host = nil
 
diff --git a/test/vagrant/environment_test.rb b/test/vagrant/environment_test.rb
index 2810a6e3b..1932ef10d 100644
--- a/test/vagrant/environment_test.rb
+++ b/test/vagrant/environment_test.rb
@@ -61,8 +61,21 @@ class EnvironmentTest < Test::Unit::TestCase
     end
 
     context "home path" do
+      setup do
+        @env = @klass.new
+      end
+
       should "return the home path if it loaded" do
-        expected = Pathname.new(File.expand_path(@env.config.vagrant.home, @env.root_path))
+        ENV["VAGRANT_HOME"] = nil
+
+        expected = Pathname.new(File.expand_path(@klass::DEFAULT_HOME))
+        assert_equal expected, @env.home_path
+      end
+
+      should "return the home path set by the environmental variable" do
+        ENV["VAGRANT_HOME"] = "foo"
+
+        expected = Pathname.new(File.expand_path(ENV["VAGRANT_HOME"]))
         assert_equal expected, @env.home_path
       end
     end