diff --git a/pkg/build/gobuild.go b/pkg/build/gobuild.go
index 5db012771e..0ad585c368 100644
--- a/pkg/build/gobuild.go
+++ b/pkg/build/gobuild.go
@@ -261,6 +261,15 @@ func build(ctx context.Context, ip string, dir string, platform v1.Platform, con
 	}
 
 	if dir := os.Getenv("KOCACHE"); dir != "" {
+		dirInfo, err := os.Stat(dir)
+		if os.IsNotExist(err) {
+			if err := os.MkdirAll(dir, os.ModePerm); err != nil && !os.IsExist(err) {
+				return "", fmt.Errorf("could not create KOCACHE dir %s: %w", dir, err)
+			}
+		} else if !dirInfo.IsDir() {
+			return "", fmt.Errorf("KOCACHE should be a directory, %s is not a directory", dir)
+		}
+
 		// TODO(#264): if KOCACHE is unset, default to filepath.Join(os.TempDir(), "ko").
 		tmpDir = filepath.Join(dir, "bin", ip, platform.String())
 		if err := os.MkdirAll(tmpDir, os.ModePerm); err != nil {
diff --git a/pkg/build/gobuild_test.go b/pkg/build/gobuild_test.go
index 2fbe3eded1..63511b7ae2 100644
--- a/pkg/build/gobuild_test.go
+++ b/pkg/build/gobuild_test.go
@@ -23,9 +23,11 @@ import (
 	"fmt"
 	"io"
 	"io/ioutil"
+	"os"
 	"path"
 	"path/filepath"
 	"runtime"
+	"strconv"
 	"strings"
 	"testing"
 	"time"
@@ -772,6 +774,42 @@ func TestGoBuild(t *testing.T) {
 	})
 }
 
+func TestGoBuildWithKOCACHE(t *testing.T) {
+	now := time.Now() // current local time
+	sec := now.Unix()
+	koCacheDir := t.TempDir()
+	t.Setenv("KOCACHE", filepath.Join(koCacheDir, strconv.FormatInt(sec, 10)))
+	baseLayers := int64(3)
+	base, err := random.Image(1024, baseLayers)
+	if err != nil {
+		t.Fatalf("random.Image() = %v", err)
+	}
+	importpath := "github.com/google/ko"
+
+	creationTime := v1.Time{Time: time.Unix(5000, 0)}
+	ng, err := NewGo(
+		context.Background(),
+		"",
+		WithCreationTime(creationTime),
+		WithBaseImages(func(context.Context, string) (name.Reference, Result, error) { return baseRef, base, nil }),
+	)
+	if err != nil {
+		t.Fatalf("NewGo() = %v", err)
+	}
+
+	_, err = ng.Build(context.Background(), StrictScheme+filepath.Join(importpath, "test"))
+	if err != nil {
+		t.Fatalf("Build() = %v", err)
+	}
+
+	t.Run("check KOCACHE exists", func(t *testing.T) {
+		_, err := os.Stat(koCacheDir)
+		if os.IsNotExist(err) {
+			t.Fatalf("KOCACHE directory %s should be exists= %v", koCacheDir, err)
+		}
+	})
+}
+
 func TestGoBuildWithoutSBOM(t *testing.T) {
 	baseLayers := int64(3)
 	base, err := random.Image(1024, baseLayers)