diff --git a/NEWS b/NEWS
index 3cc5562..3b676da 100644
--- a/NEWS
+++ b/NEWS
@@ -22,6 +22,16 @@ News file for Stow.
 
     Thanks to Joris Vankerschaver for this feature!
 
+*** Shell-like expansion in .stowrc files
+
+    For options within .stowrc files which describe file paths, "~" can
+    be included to expand to the current value of $HOME, and
+    environment variables can be referenced e.g. via "$FOO" or
+    "${FOO}".  To prevent expansion, escape with a backslash.
+
+    Thanks a lot to Charles LeDoux for his diligent work on this
+    feature!
+
 *** chkstow now honours the $STOW_DIR environment variable
 
     The stow script already honoured the $STOW_DIR environment
diff --git a/bin/stow.in b/bin/stow.in
index dd6fb8e..9afe2a1 100755
--- a/bin/stow.in
+++ b/bin/stow.in
@@ -343,6 +343,28 @@ Stow will re-fold the tree by removing the symlinks to the surviving
 package, removing the directory, then linking the directory back to
 the surviving package.
 
+=head1 RESOURCE FILES
+
+F<Stow> searches for default command line options at F<.stowrc> (current
+directory) and F<~/.stowrc> (home directory) in that order. If both
+locations are present, the files are effectively appended together.
+
+The effect of options in the resource file is similar to simply prepending
+the options to the command line. For options that provide a single value,
+such as F<--target> or F<--dir>, the command line option will overwrite any
+options in the resource file. For options that can be given more than once,
+F<--ignore> for example, command line options and resource options are
+appended together.
+
+Environment variables and the tilde character (F<~>) will be expanded for
+options that take a file path.
+
+The options F<-D>, F<-R>, F<-S>, and any packages listed in the resource
+file are ignored.
+
+See the info manual for more information on how stow handles resource
+file.
+
 =head1 SEE ALSO
 
 The full documentation for F<stow> is maintained as a Texinfo manual.
@@ -633,7 +655,8 @@ sub check_packages {
 # Throws    : a fatal error if a bad option is given
 # Comments  : Parses the contents of '~/.stowrc' and '.stowrc' with the same
 #             parser as the command line options. Additionally expands any
-#             environment variables in --target or --dir options.
+#             environment variables or ~ character in --target or --dir
+#             options.
 #=============================================================================
 sub get_config_file_options {
     my @defaults = ();
@@ -655,16 +678,36 @@ sub get_config_file_options {
     # Expand environment variables and glob characters.
     if (exists $rc_options->{target}) {
         $rc_options->{target} =
-            expand_environment($rc_options->{target}, '--target option');
+            expand_filepath($rc_options->{target}, '--target option');
     }
     if (exists $rc_options->{dir}) {
         $rc_options->{dir} =
-            expand_environment($rc_options->{dir}, '--dir option');
+            expand_filepath($rc_options->{dir}, '--dir option');
     }
 
     return ($rc_options, $rc_pkgs_to_unstow, $rc_pkgs_to_stow);
 }
 
+#===== SUBROUTINE ============================================================
+# Name      : expand_filepath()
+# Purpose   : Handles expansions that need to be applied to
+#           : file paths. Currently expands environment
+#           : variables and the tilde.
+# Parameters: $path => string to perform expansion on.
+#           : $source => where the string came from
+# Returns   : String with replacements performed.
+# Throws    : n/a
+# Comments  : n/a
+#=============================================================================
+sub expand_filepath {
+    my ($path, $source) = @_;
+
+    $path = expand_environment($path, $source);
+    $path = expand_tilde($path);
+
+    return $path;
+}
+
 #===== SUBROUTINE ============================================================
 # Name      : expand_environment()
 # Purpose   : Expands evironment variables.
@@ -700,6 +743,30 @@ sub _safe_expand_env_var {
     return $ENV{$var};
 }
 
+#===== SUBROUTINE ============================================================
+# Name      : expand_tilde()
+# Purpose   : Expands tilde to user's home directory path.
+# Parameters: $path => string to perform expansion on.
+# Returns   : String with replacements performed.
+# Throws    : n/a
+# Comments  : http://docstore.mik.ua/orelly/perl4/cook/ch07_04.htm
+#=============================================================================
+sub expand_tilde {
+    my ($path) = @_;
+    # Replace tilde with home path.
+	$path =~ s{ ^ ~ ( [^/]* ) }
+                  { $1
+                    ? (getpwnam($1))[7]
+                    : ( $ENV{HOME} || $ENV{LOGDIR}
+                         || (getpwuid($<))[7]
+                      )
+    }ex;
+    # Replace espaced tilde with regular tilde.
+    $path =~ s/\\~/~/g;
+	return $path
+}
+
+
 #===== SUBROUTINE ===========================================================
 # Name      : usage()
 # Purpose   : print program usage message and exit
diff --git a/doc/stow.texi b/doc/stow.texi
index 1042ad4..d4e4087 100644
--- a/doc/stow.texi
+++ b/doc/stow.texi
@@ -881,9 +881,10 @@ directory.
 
 Default command line options may be set in @file{.stowrc} (current
 directory) or @file{~/.stowrc} (home directory). These are parsed in
-that order, and effectively prepended to the command line arguments
-(with the notable difference that they won't be processed by the shell).
-This feature can be used for some interesting effects.
+that order, and are appended together if they both exist. The effect of
+the options in the resource file is similar to simply prepending the
+options to the command line. This feature can be used for some
+interesting effects.
 
 For example, suppose your site uses more than one stow directory, perhaps in
 order to share around responsibilities with a number of systems
@@ -922,6 +923,22 @@ immediate parent directory @file{/usr/local/stow}), overriding any
 pre-existing links to bin files or man pages, and ignoring some cruft
 that gets installed by default.
 
+If an option is provided both on the command line and in a resource file,
+the command line option takes precedence. For options that provide a single
+value, such as @command{--target} or @command{--dir}, the command line
+option will overwrite any options in the resource file. For options that can
+be given more than once, @command{--ignore} for example, command line
+options and resource options are appended together.
+
+For options that take a file path, environment variables and the tilde
+character (@command{~}) are expanded. An environment variable can be
+given in either the @command{$VAR} or @command{$@{VAR@}} form. To
+prevent expansion, escape the @command{$} or @command{~} with a
+backslash.
+
+The options @command{-D}, @command{-S}, and @command{-R} are ignored in
+resource files. This is also true of any package names given in the
+resource file.
 
 @c ===========================================================================
 @node Compile-time vs Install-time, Bootstrapping, Resource Files, Top
diff --git a/t/rc_options.t b/t/rc_options.t
index c6c2061..6905df5 100755
--- a/t/rc_options.t
+++ b/t/rc_options.t
@@ -7,7 +7,7 @@
 use strict;
 use warnings;
 
-use Test::More tests => 15;
+use Test::More tests => 23;
 
 use testutil;
 
@@ -107,6 +107,16 @@ delete $ENV{'WITH_UNDERSCORE'};
 # Expansion with escaped $
 is(expand_environment('\$HOME/stow'), '$HOME/stow', 'expand \$HOME');
 
+#
+# Test tilde (~) expansion
+#
+# Basic expansion
+is(expand_tilde('~/path'), "$ENV{HOME}/path", 'tilde expansion to $HOME');
+# Should not expand if middle of path
+is(expand_tilde('/path/~/here'), '/path/~/here', 'middle ~ not expanded');
+# Test escaped ~
+is(expand_tilde('\~/path'), '~/path', 'escaped tilde');
+
 #
 # Test that environment variable expansion is applied.
 #
@@ -130,6 +140,29 @@ is_deeply($options->{defer}, [qr(\A\$HOME)],
 is_deeply($options->{override}, [qr(\A\$HOME)],
     "environment expansion not applied on --override");
 
+#
+# Test that tilde expansion is applied in correct places.
+#
+$rc_contents = <<'HERE';
+--dir=~/stow
+--target=~/stow
+--ignore=~/stow
+--defer=~/stow
+--override=~/stow
+HERE
+make_file($RC_FILE, $rc_contents);
+($options, $pkgs_to_delete, $pkgs_to_stow) = get_config_file_options();
+is($options->{dir}, "$OUT_DIR/stow",
+    "apply environment expansion on stowrc --dir");
+is($options->{target}, "$OUT_DIR/stow",
+    "apply environment expansion on stowrc --target");
+is_deeply($options->{ignore}, [qr(~/stow\z)],
+    "environment expansion not applied on --ignore");
+is_deeply($options->{defer}, [qr(\A~/stow)],
+    "environment expansion not applied on --defer");
+is_deeply($options->{override}, [qr(\A~/stow)],
+    "environment expansion not applied on --override");
+
 # Clean up files used for testing.
 #
 unlink $RC_FILE or die "Unable to clean up $RC_FILE.\n";