diff --git a/System/Directory.hs b/System/Directory.hs
--- a/System/Directory.hs
+++ b/System/Directory.hs
@@ -1498,9 +1498,12 @@
 application-specific data here; use 'getXdgDirectory' or
 'getAppUserDataDirectory' instead.
 
-On Unix, 'getHomeDirectory' returns the value of the @HOME@
-environment variable.  On Windows, the system is queried for a
-suitable path; a typical path might be @C:\/Users\//\<user\>/@.
+On Unix, 'getHomeDirectory' behaves as follows:
+
+* Returns $HOME env variable if set (including to an empty string).
+* Otherwise uses home directory returned by `getpwuid_r` using the UID of the current proccesses user. This basically reads the /etc/passwd file. An empty home directory field is considered valid.
+
+On Windows, the system is queried for a suitable path; a typical path might be @C:\/Users\//\<user\>/@.
 
 The operation may fail with:
 
diff --git a/System/Directory/Internal/Posix.hsc b/System/Directory/Internal/Posix.hsc
--- a/System/Directory/Internal/Posix.hsc
+++ b/System/Directory/Internal/Posix.hsc
@@ -17,6 +17,7 @@
 import qualified Data.Time.Clock.POSIX as POSIXTime
 import qualified GHC.Foreign as GHC
 import qualified System.Posix as Posix
+import qualified System.Posix.User as PU
 
 createDirectoryInternal :: FilePath -> IO ()
 createDirectoryInternal path = Posix.createDirectory path 0o777
@@ -280,8 +281,14 @@
 getPath :: IO [FilePath]
 getPath = splitSearchPath <$> getEnv "PATH"
 
+-- | $HOME is preferred, because the user has control over it. However, POSIX
+-- doesn't define it as a mandatory variable, so fall back to `getpwuid_r`.
 getHomeDirectoryInternal :: IO FilePath
-getHomeDirectoryInternal = getEnv "HOME"
+getHomeDirectoryInternal = do
+  e <- lookupEnv "HOME"
+  case e of
+       Just fp -> pure fp
+       Nothing -> PU.homeDirectory <$> (PU.getEffectiveUserID >>= PU.getUserEntryForID)
 
 getXdgDirectoryFallback :: IO FilePath -> XdgDirectory -> IO FilePath
 getXdgDirectoryFallback getHomeDirectory xdgDir = do
diff --git a/System/Directory/Internal/Prelude.hs b/System/Directory/Internal/Prelude.hs
--- a/System/Directory/Internal/Prelude.hs
+++ b/System/Directory/Internal/Prelude.hs
@@ -47,7 +47,7 @@
 #if MIN_VERSION_base(4, 8, 0)
 import Data.Void (Void)
 #else
-import Control.Applicative (Applicative, (<*>), pure)
+import Control.Applicative (Applicative, (<*>), (*>), pure)
 import Data.Functor ((<$>), (<$))
 #endif
 import Control.Arrow (second)
diff --git a/changelog.md b/changelog.md
--- a/changelog.md
+++ b/changelog.md
@@ -1,6 +1,12 @@
 Changelog for the [`directory`][1] package
 ==========================================
 
+## 1.3.6.0 (January 2020)
+
+  * On non-Windows platforms, `getHomeDirectory` will fall back to
+    `getpwuid_r` if `HOME` is not set.
+    ([#102](https://github.com/haskell/directory/issues/102))
+
 ## 1.3.5.0 (December 2019)
 
   * Revert change introduced in the version `1.3.3.2`: Non-absolute `XDG_*`
diff --git a/directory.cabal b/directory.cabal
--- a/directory.cabal
+++ b/directory.cabal
@@ -1,5 +1,5 @@
 name:           directory
-version:        1.3.5.0
+version:        1.3.6.0
 license:        BSD3
 license-file:   LICENSE
 maintainer:     libraries@haskell.org
@@ -96,6 +96,7 @@
         GetDirContents002
         GetFileSize
         GetHomeDirectory001
+        GetHomeDirectory002
         GetPermissions001
         LongPaths
         MakeAbsolute
diff --git a/tests/GetHomeDirectory002.hs b/tests/GetHomeDirectory002.hs
new file mode 100644
--- /dev/null
+++ b/tests/GetHomeDirectory002.hs
@@ -0,0 +1,17 @@
+{-# LANGUAGE CPP #-}
+module GetHomeDirectory002 where
+
+#if !defined(mingw32_HOST_OS)
+import System.Posix.Env
+#endif
+#include "util.inl"
+
+-- Test that the getpwuid_r fallback works.
+-- This is only relevant on unix.
+main :: TestEnv -> IO ()
+main _t = do
+#if !defined(mingw32_HOST_OS)
+  unsetEnv "HOME"
+#endif
+  _ <- getHomeDirectory
+  T(expect) () True -- avoid warnings about redundant imports
diff --git a/tests/Main.hs b/tests/Main.hs
--- a/tests/Main.hs
+++ b/tests/Main.hs
@@ -16,6 +16,7 @@
 import qualified GetDirContents002
 import qualified GetFileSize
 import qualified GetHomeDirectory001
+import qualified GetHomeDirectory002
 import qualified GetPermissions001
 import qualified LongPaths
 import qualified MakeAbsolute
@@ -49,6 +50,7 @@
   T.isolatedRun _t "GetDirContents002" GetDirContents002.main
   T.isolatedRun _t "GetFileSize" GetFileSize.main
   T.isolatedRun _t "GetHomeDirectory001" GetHomeDirectory001.main
+  T.isolatedRun _t "GetHomeDirectory002" GetHomeDirectory002.main
   T.isolatedRun _t "GetPermissions001" GetPermissions001.main
   T.isolatedRun _t "LongPaths" LongPaths.main
   T.isolatedRun _t "MakeAbsolute" MakeAbsolute.main
diff --git a/tests/Util.hs b/tests/Util.hs
--- a/tests/Util.hs
+++ b/tests/Util.hs
@@ -1,10 +1,16 @@
 {-# LANGUAGE BangPatterns #-}
+{-# LANGUAGE CPP #-}
 -- | A rudimentary testing framework
 module Util where
 import Prelude ()
 import System.Directory.Internal.Prelude
 import System.Directory
 import Data.Time.Clock (NominalDiffTime, UTCTime, diffUTCTime)
+#if MIN_VERSION_base(4, 7, 0)
+import System.Environment (getEnvironment, setEnv, unsetEnv)
+#elif !defined(mingw32_HOST_OS)
+import qualified System.Posix as Posix
+#endif
 import System.FilePath ((</>), normalise)
 import qualified Data.List as List
 
@@ -141,6 +147,37 @@
   where cleanup dir' | keep      = return ()
                      | otherwise = removePathForcibly dir'
 
+isolateEnvironment :: IO a -> IO a
+isolateEnvironment = bracket getEnvs setEnvs . const
+  where
+    getEnvs = List.sort . filter (\(k, _) -> k /= "") <$> getEnvironment
+    setEnvs target = do
+      current <- getEnvs
+      updateEnvs current target
+      new <- getEnvs
+      when (target /= new) $ do
+        -- Environment variables may be sensitive, so don't log them.
+        throwIO (userError "isolateEnvironment.setEnvs failed")
+    updateEnvs kvs1@((k1, v1) : kvs1') kvs2@((k2, v2) : kvs2') =
+      case compare k1 k2 of
+        LT -> unsetEnv k1 *> updateEnvs kvs1' kvs2
+        EQ | v1 == v2 -> updateEnvs kvs1' kvs2'
+           | otherwise -> setEnv k1 v2 *> updateEnvs kvs1' kvs2'
+        GT -> setEnv k2 v2 *> updateEnvs kvs1 kvs2'
+    updateEnvs [] [] = pure ()
+    updateEnvs kvs1 [] = for_ kvs1 (unsetEnv . fst)
+    updateEnvs [] kvs2 = for_ kvs2 (uncurry setEnv)
+#if MIN_VERSION_base(4, 7, 0)
+#elif !defined(mingw32_HOST_OS)
+    getEnvironment = Posix.getEnvironment
+    setEnv k v = Posix.setEnv k v True
+    unsetEnv = Posix.unsetEnv
+#else
+    getEnvironment = pure []
+    setEnv _ _ = pure ()
+    unsetEnv _ = pure ()
+#endif
+
 isolateWorkingDirectory :: Bool -> FilePath -> IO a -> IO a
 isolateWorkingDirectory keep dir action = do
   when (normalise dir `List.elem` [".", "./"]) $
@@ -160,9 +197,11 @@
     Right () -> return ()
 
 isolatedRun :: TestEnv -> String -> (TestEnv -> IO ()) -> IO ()
-isolatedRun t@TestEnv{testKeepDirs = keep} name =
-  run t name .
-  (isolateWorkingDirectory keep ("dist/test-" <> name <> ".tmp") .)
+isolatedRun t@TestEnv{testKeepDirs = keep} name = run t name . (isolate .)
+  where
+    isolate =
+      isolateEnvironment .
+      isolateWorkingDirectory keep ("dist/test-" <> name <> ".tmp")
 
 tryRead :: Read a => String -> Maybe a
 tryRead s =