diff --git a/internal/command/cliconfig/config_unix.go b/internal/command/cliconfig/config_unix.go
index 6dc1450b2364..9399eefb74cc 100644
--- a/internal/command/cliconfig/config_unix.go
+++ b/internal/command/cliconfig/config_unix.go
@@ -11,7 +11,12 @@ import (
 )
 
 func configFile() (string, error) {
-	dir, err := homeDir()
+	tfHomeDir, err := tfHomeDir()
+	if err != nil {
+		return filepath.Join(tfHomeDir, "terraformrc"), nil
+	}
+
+	dir, err := userHomeDir()
 	if err != nil {
 		return "", err
 	}
@@ -20,7 +25,12 @@ func configFile() (string, error) {
 }
 
 func configDir() (string, error) {
-	dir, err := homeDir()
+	tfHomeDir, err := tfHomeDir()
+	if err != nil {
+		return tfHomeDir, nil
+	}
+
+	dir, err := userHomeDir()
 	if err != nil {
 		return "", err
 	}
@@ -28,10 +38,17 @@ func configDir() (string, error) {
 	return filepath.Join(dir, ".terraform.d"), nil
 }
 
-func homeDir() (string, error) {
+func tfHomeDir() (string, error) {
+	if tfHome := os.Getenv("TF_HOME_DIR"); tfHome != "" {
+		return tfHome, nil
+	}
+	return "", errors.New("TF_HOME_DIR is not set")
+}
+
+func userHomeDir() (string, error) {
 	// First prefer the HOME environmental variable
 	if home := os.Getenv("HOME"); home != "" {
-		// FIXME: homeDir gets called from globalPluginDirs during init, before
+		// FIXME: userHomeDir gets called from globalPluginDirs during init, before
 		// the logging is set up.  We should move meta initializtion outside of
 		// init, but in the meantime we just need to silence this output.
 		//log.Printf("[DEBUG] Detected home directory from env var: %s", home)
diff --git a/internal/command/cliconfig/config_windows.go b/internal/command/cliconfig/config_windows.go
index 8f232fd5b65e..0fb58578beb2 100644
--- a/internal/command/cliconfig/config_windows.go
+++ b/internal/command/cliconfig/config_windows.go
@@ -17,7 +17,7 @@ var (
 const CSIDL_APPDATA = 26
 
 func configFile() (string, error) {
-	dir, err := homeDir()
+	dir, err := userHomeDir()
 	if err != nil {
 		return "", err
 	}
@@ -26,7 +26,7 @@ func configFile() (string, error) {
 }
 
 func configDir() (string, error) {
-	dir, err := homeDir()
+	dir, err := userHomeDir()
 	if err != nil {
 		return "", err
 	}
@@ -34,7 +34,7 @@ func configDir() (string, error) {
 	return filepath.Join(dir, "terraform.d"), nil
 }
 
-func homeDir() (string, error) {
+func userHomeDir() (string, error) {
 	b := make([]uint16, syscall.MAX_PATH)
 
 	// See: http://msdn.microsoft.com/en-us/library/windows/desktop/bb762181(v=vs.85).aspx
diff --git a/plugins.go b/plugins.go
index be576e81ac51..263d51e22b14 100644
--- a/plugins.go
+++ b/plugins.go
@@ -17,7 +17,7 @@ import (
 // older versions where both satisfy the provider version constraints.
 func globalPluginDirs() []string {
 	var ret []string
-	// Look in ~/.terraform.d/plugins/ , or its equivalent on non-UNIX
+	// Look in "${TF_HOME_DIR:-~/.terraform.d}/plugins/" , or its equivalent on non-UNIX
 	dir, err := cliconfig.ConfigDir()
 	if err != nil {
 		log.Printf("[ERROR] Error finding global config directory: %s", err)
diff --git a/provider_source.go b/provider_source.go
index f27ca54b2a79..1f0490152e5b 100644
--- a/provider_source.go
+++ b/provider_source.go
@@ -93,7 +93,7 @@ func implicitProviderSource(services *disco.Disco) getproviders.Source {
 	//   way to include them in bundles uploaded to Terraform Cloud, where
 	//   there has historically otherwise been no way to use custom providers.
 	// - The "plugins" subdirectory of the CLI config search directory.
-	//   (thats ~/.terraform.d/plugins on Unix systems, equivalents elsewhere)
+	//   (thats "${TF_HOME_DIR:-~/.terraform.d}/plugins" on Unix systems, equivalents elsewhere)
 	// - The "plugins" subdirectory of any platform-specific search paths,
 	//   following e.g. the XDG base directory specification on Unix systems,
 	//   Apple's guidelines on OS X, and "known folders" on Windows.
diff --git a/website/docs/cli/config/config-file.mdx b/website/docs/cli/config/config-file.mdx
index accdc465fc13..9bae43d69975 100644
--- a/website/docs/cli/config/config-file.mdx
+++ b/website/docs/cli/config/config-file.mdx
@@ -42,7 +42,7 @@ general syntax; see the following section for information on the meaning
 of each of these settings:
 
 ```hcl
-plugin_cache_dir   = "$HOME/.terraform.d/plugin-cache"
+plugin_cache_dir   = "${TF_HOME_DIR:-$HOME/.terraform.d}/plugin-cache"
 disable_checkpoint = true
 ```
 
@@ -298,10 +298,10 @@ The set of directories Terraform can select as filesystem mirrors depends on
 the operating system where you are running Terraform:
 
 * **Windows:** `%APPDATA%/terraform.d/plugins` and `%APPDATA%/HashiCorp/Terraform/plugins`
-* **Mac OS X:** `$HOME/.terraform.d/plugins`,
+* **Mac OS X:** `${TF_HOME_DIR:-$HOME/.terraform.d}/plugins`,
   `~/Library/Application Support/io.terraform/plugins`, and
   `/Library/Application Support/io.terraform/plugins`
-* **Linux and other Unix-like systems**:`$HOME/.terraform.d/plugins` and
+* **Linux and other Unix-like systems**:`${TF_HOME_DIR:-$HOME/.terraform.d}/plugins` and
   `terraform/plugins` located within a valid
   [XDG Base Directory](https://specifications.freedesktop.org/basedir-spec/basedir-spec-latest.html)
   data directory such as `$XDG_DATA_HOME/terraform/plugins`.
@@ -343,7 +343,7 @@ To enable the plugin cache, use the `plugin_cache_dir` setting in
 the CLI configuration file. For example:
 
 ```hcl
-plugin_cache_dir = "$HOME/.terraform.d/plugin-cache"
+plugin_cache_dir = "${TF_HOME_DIR:-$HOME/.terraform.d}/plugin-cache"
 ```
 
 This directory must already exist before Terraform will cache plugins;
@@ -359,7 +359,7 @@ variable can be used to enable caching or to override an existing cache
 directory within a particular shell session:
 
 ```bash
-export TF_PLUGIN_CACHE_DIR="$HOME/.terraform.d/plugin-cache"
+export TF_PLUGIN_CACHE_DIR="${TF_HOME_DIR:-$HOME/.terraform.d}/plugin-cache"
 ```
 
 When a plugin cache directory is enabled, the `terraform init` command will
diff --git a/website/docs/language/resources/provisioners/syntax.mdx b/website/docs/language/resources/provisioners/syntax.mdx
index c05221f1143a..14679da9b3b7 100644
--- a/website/docs/language/resources/provisioners/syntax.mdx
+++ b/website/docs/language/resources/provisioners/syntax.mdx
@@ -166,7 +166,7 @@ provisioners must connect to the remote system using SSH or WinRM.
 You must include [a `connection` block](/terraform/language/resources/provisioners/connection) so that Terraform knows how to communicate with the server.
 
 Terraform includes several built-in provisioners. You can also use third-party provisioners as plugins, by placing them
-in `%APPDATA%\terraform.d\plugins`, `~/.terraform.d/plugins`, or the same
+in `%APPDATA%\terraform.d\plugins`, `${TF_HOME_DIR:-~/.terraform.d}/plugins`, or the same
 directory where the Terraform binary is installed. However, we do not recommend
 using any provisioners except the built-in `file`, `local-exec`, and
 `remote-exec` provisioners.