diff --git a/winsup/utils/ChangeLog b/winsup/utils/ChangeLog
index 2011c34c7..c94c53f17 100644
--- a/winsup/utils/ChangeLog
+++ b/winsup/utils/ChangeLog
@@ -1,3 +1,8 @@
+2012-05-05  Corinna Vinschen  <corinna@vinschen.de>
+
+	* mkpasswd.c (current_user): Actually *use* $HOME if it's available.
+	Add comment to explain what we're doing here.
+
 2012-04-05  Corinna Vinschen  <corinna@vinschen.de>
 
 	* mkgroup.c (print_special_by_sid): Rename from print_special.  Change
diff --git a/winsup/utils/mkpasswd.c b/winsup/utils/mkpasswd.c
index 6ca4e5db3..5373719c5 100644
--- a/winsup/utils/mkpasswd.c
+++ b/winsup/utils/mkpasswd.c
@@ -172,9 +172,13 @@ current_user (const char *sep, const char *passed_home_path, DWORD id_offset,
 			     *GetSidSubAuthorityCount(curr_pgrp.psid) - 1);
   if (passed_home_path[0] == '\0')
     {
-      char *envhome = getenv ("HOME");	/* POSIX! */
+      char *envhome = getenv ("HOME");
 
-      if (!envhome || envhome[0] == '\0')
+      /* If $HOME exists and is non-empty, just copy it over to homedir_psx.
+	 Otherwise, generate a new path of the form "/home/$USER". */
+      if (envhome && envhome[0] != '\0')
+	strncat (homedir_psx, envhome, sizeof (homedir_psx) - 1);
+      else
 	{
 	  wcstombs (stpncpy (homedir_psx, "/home/", sizeof (homedir_psx)),
 		    user, sizeof (homedir_psx) - 6);