diff --git a/cmd/root.go b/cmd/root.go
index eef5f5b9..8bbf8d0b 100644
--- a/cmd/root.go
+++ b/cmd/root.go
@@ -28,6 +28,7 @@ import (
 	pkgutil "github.com/GoogleContainerTools/container-diff/pkg/util"
 	"github.com/GoogleContainerTools/container-diff/util"
 	homedir "github.com/mitchellh/go-homedir"
+	"github.com/pkg/errors"
 	"github.com/sirupsen/logrus"
 	"github.com/spf13/cobra"
 	"github.com/spf13/pflag"
@@ -39,9 +40,12 @@ var save bool
 var types diffTypes
 var noCache bool
 
+var cacheDir string
 var LogLevel string
 var format string
 
+const containerDiffEnvCacheDir = "CONTAINER_DIFF_CACHEDIR"
+
 type validatefxn func(args []string) error
 
 var RootCmd = &cobra.Command{
@@ -129,7 +133,7 @@ func getImage(imageName string) (pkgutil.Image, error) {
 	var cachePath string
 	var err error
 	if !noCache {
-		cachePath, err = cacheDir(imageName)
+		cachePath, err = getCacheDir(imageName)
 		if err != nil {
 			return pkgutil.Image{}, err
 		}
@@ -137,12 +141,23 @@ func getImage(imageName string) (pkgutil.Image, error) {
 	return pkgutil.GetImage(imageName, includeLayers(), cachePath)
 }
 
-func cacheDir(imageName string) (string, error) {
-	dir, err := homedir.Dir()
-	if err != nil {
-		return "", err
+func getCacheDir(imageName string) (string, error) {
+	// First preference for cache is set at command line
+	if cacheDir == "" {
+		// second preference is environment
+		cacheDir = os.Getenv(containerDiffEnvCacheDir)
 	}
-	rootDir := filepath.Join(dir, ".container-diff", "cache")
+
+	// Third preference (default) is set at $HOME
+	if cacheDir == "" {
+		dir, err := homedir.Dir()
+		if err != nil {
+			return "", errors.Wrap(err, "retrieving home dir")
+		} else {
+			cacheDir = dir
+		}
+	}
+	rootDir := filepath.Join(cacheDir, ".container-diff", "cache")
 	imageName = strings.Replace(imageName, string(os.PathSeparator), "", -1)
 	return filepath.Join(rootDir, filepath.Clean(imageName)), nil
 }
@@ -185,4 +200,6 @@ func addSharedFlags(cmd *cobra.Command) {
 	cmd.Flags().BoolVarP(&save, "save", "s", false, "Set this flag to save rather than remove the final image filesystems on exit.")
 	cmd.Flags().BoolVarP(&util.SortSize, "order", "o", false, "Set this flag to sort any file/package results by descending size. Otherwise, they will be sorted by name.")
 	cmd.Flags().BoolVarP(&noCache, "no-cache", "n", false, "Set this to force retrieval of image filesystem on each run.")
+	cmd.Flags().StringVarP(&cacheDir, "cache-dir", "c", "", "cache directory base to create .container-diff (default is $HOME).")
+
 }
diff --git a/cmd/root_test.go b/cmd/root_test.go
index 319f7315..5ffa9a18 100644
--- a/cmd/root_test.go
+++ b/cmd/root_test.go
@@ -16,7 +16,81 @@ limitations under the License.
 
 package cmd
 
+import (
+	"os"
+	"path"
+	"path/filepath"
+	"testing"
+
+	homedir "github.com/mitchellh/go-homedir"
+)
+
 type testpair struct {
 	input       []string
 	shouldError bool
 }
+
+func TestCacheDir(t *testing.T) {
+	homeDir, err := homedir.Dir()
+	if err != nil {
+		t.Errorf("error getting home dir: %s", err.Error())
+	}
+	tests := []struct {
+		name        string
+		cliFlag     string
+		envVar      string
+		expectedDir string
+		imageName   string
+	}{
+		{
+			name:        "default cache is at $HOME",
+			cliFlag:     "",
+			envVar:      "",
+			expectedDir: filepath.Join(homeDir, ".container-diff", "cache"),
+			imageName:   "pancakes",
+		},
+		{
+			name:        "setting cache via --cache-dir",
+			cliFlag:     "/tmp",
+			envVar:      "",
+			expectedDir: "/tmp/.container-diff/cache",
+			imageName:   "pancakes",
+		},
+		{
+			name:        "setting cache via CONTAINER_DIFF_CACHEDIR",
+			cliFlag:     "",
+			envVar:      "/tmp",
+			expectedDir: "/tmp/.container-diff/cache",
+			imageName:   "pancakes",
+		},
+		{
+			name:        "command line --cache-dir takes preference to CONTAINER_DIFF_CACHEDIR",
+			cliFlag:     "/tmp",
+			envVar:      "/opt",
+			expectedDir: "/tmp/.container-diff/cache",
+			imageName:   "pancakes",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			// set any environment variables
+			if tt.envVar != "" {
+				os.Setenv("CONTAINER_DIFF_CACHEDIR", tt.envVar)
+			}
+			// Set global flag for cache based on --cache-dir
+			cacheDir = tt.cliFlag
+
+			// call getCacheDir and make sure return is equal to expected
+			actualDir, err := getCacheDir(tt.imageName)
+			if err != nil {
+				t.Errorf("Error getting cache dir %s: %s", tt.name, err.Error())
+			}
+
+			if path.Dir(actualDir) != tt.expectedDir {
+				t.Errorf("%s\nexpected: %v\ngot: %v", tt.name, tt.expectedDir, actualDir)
+			}
+		},
+		)
+	}
+}