diff --git a/packages/plugin-ext/src/hosted/node/hosted-plugin-process.ts b/packages/plugin-ext/src/hosted/node/hosted-plugin-process.ts
index 3515e3d323eeb..992076ae09833 100644
--- a/packages/plugin-ext/src/hosted/node/hosted-plugin-process.ts
+++ b/packages/plugin-ext/src/hosted/node/hosted-plugin-process.ts
@@ -112,6 +112,8 @@ export class HostedPluginProcess implements ServerPluginRunner {
         // create env and add PATH to it so any executable from root process is available
         const env = createIpcEnv();
         env.PATH = process.env.PATH;
+        // add HOME to env since some plug-ins need to read files from user's home dir
+        env.HOME = process.env.HOME;
 
         const forkOptions: cp.ForkOptions = {
             silent: true,