diff --git a/_pytest/config.py b/_pytest/config.py
index 4fe8bd10682..12be0c49660 100644
--- a/_pytest/config.py
+++ b/_pytest/config.py
@@ -1055,9 +1055,10 @@ def _warn_about_missing_assertion(self, mode):
                                  "(are you using python -O?)\n")
 
     def _preparse(self, args, addopts=True):
-        self._initini(args)
         if addopts:
             args[:] = shlex.split(os.environ.get('PYTEST_ADDOPTS', '')) + args
+        self._initini(args)
+        if addopts:
             args[:] = self.getini("addopts") + args
         self._checkversion()
         self._consider_importhook(args)
diff --git a/changelog/2824.feature b/changelog/2824.feature
new file mode 100644
index 00000000000..690ca939a0b
--- /dev/null
+++ b/changelog/2824.feature
@@ -0,0 +1 @@
+Allow setting ``file_or_dir``, ``-c``, and ``-o`` in PYTEST_ADDOPTS.
diff --git a/testing/test_config.py b/testing/test_config.py
index d049725cdc1..9881a5d4135 100644
--- a/testing/test_config.py
+++ b/testing/test_config.py
@@ -843,3 +843,11 @@ def test_with_existing_file_in_subdir(self, tmpdir):
             rootdir, inifile, inicfg = determine_setup(None, ['a/exist'])
             assert rootdir == tmpdir
             assert inifile is None
+
+    def test_addopts_before_initini(self, testdir, tmpdir, monkeypatch):
+        cache_dir = '.custom_cache'
+        monkeypatch.setenv('PYTEST_ADDOPTS', '-o cache_dir=%s' % cache_dir)
+        from _pytest.config import get_config
+        config = get_config()
+        config._preparse([], addopts=True)
+        assert config._override_ini == [['cache_dir=%s' % cache_dir]]