diff --git a/README.md b/README.md
index e7b426e3..c88b0ada 100644
--- a/README.md
+++ b/README.md
@@ -151,7 +151,8 @@ alias precmd 'set prompt="`powerline-shell --shell tcsh $?`"'
 ### Config File
 
 Powerline-shell is customizable through the use of a config file. This file is
-expected to be located at `~/.powerline-shell.json`. You can generate the
+expected to be located at `~/.powerline-shell.json` or 
+`$XDG_CONFIG_HOME/powerline-shell/config.json`. You can generate the
 default config at this location using:
 
 ```
diff --git a/powerline_shell/__init__.py b/powerline_shell/__init__.py
index 53eed96a..db9f7125 100644
--- a/powerline_shell/__init__.py
+++ b/powerline_shell/__init__.py
@@ -134,6 +134,7 @@ def find_config():
     for location in [
         "powerline-shell.json",
         "~/.powerline-shell.json",
+        os.path.join(os.environ.get("XDG_CONFIG_HOME", "~/.config"), "powerline-shell", "config.json"),
     ]:
         full = os.path.expanduser(location)
         if os.path.exists(full):