diff --git a/README.md b/README.md
index 38771f0..2151f8c 100644
--- a/README.md
+++ b/README.md
@@ -54,8 +54,10 @@ wget -qO- https://raw.githubusercontent.com/creationix/nvm/v0.33.11/install.sh |
 
 <sub>The script clones the nvm repository to `~/.nvm` and adds the source line to your profile (`~/.bash_profile`, `~/.zshrc`, `~/.profile`, or `~/.bashrc`).</sub>
 
+<sub>**Note:** If the environment variable `$XDG_CONFIG_HOME` is present, it will place the `nvm` files there.</sub>
+
 ```sh
-export NVM_DIR="$HOME/.nvm"
+export NVM_DIR="${XDG_CONFIG_HOME/:-$HOME/.}nvm"
 [ -s "$NVM_DIR/nvm.sh" ] && \. "$NVM_DIR/nvm.sh" # This loads nvm
 ```
 
diff --git a/install.sh b/install.sh
index 7bf62df..2115f3f 100755
--- a/install.sh
+++ b/install.sh
@@ -7,7 +7,13 @@ nvm_has() {
 }
 
 nvm_install_dir() {
-  command printf %s "${NVM_DIR:-"$HOME/.nvm"}"
+  if [ ! -z "$NVM_DIR" ]; then
+    printf %s "${NVM_DIR}"
+  elif [ ! -z "$XDG_CONFIG_HOME" ]; then
+    printf %s "${XDG_CONFIG_HOME/nvm}"
+  else
+    printf %s "$HOME/.nvm"
+  fi
 }
 
 nvm_latest_version() {
diff --git a/test/install_script/nvm_install_dir b/test/install_script/nvm_install_dir
index 1aeea18..78da611 100755
--- a/test/install_script/nvm_install_dir
+++ b/test/install_script/nvm_install_dir
@@ -16,9 +16,10 @@ install_dir=$(nvm_install_dir)
 [ "_$install_dir" = "_$NVM_DIR" ] || die "nvm_install_dir should use \$NVM_DIR if it exists. Current output: $install_dir"
 
 unset NVM_DIR
-
 # NVM_DIR is not set
 install_dir=$(nvm_install_dir)
-[ "_$install_dir" = "_$HOME/.nvm" ] || die "nvm_install_dir should default to \$HOME/.nvm. Current output: $install_dir"
+fallback_dir=""
+[ ! -z "$XDG_CONFIG_HOME" ] && fallback_dir="$XDG_CONFIG_HOME/nvm" || fallback_dir="$HOME/.nvm"
+[ "_$install_dir" = "_$fallback_dir" ] || die "nvm_install_dir should default to \$XDG_CONFIG_DIR/.nvm. Current output: $install_dir"
 
 cleanup