diff --git a/docs/source/config_file.rst b/docs/source/config_file.rst
index ac919b6cbb63f..d01fa48936443 100644
--- a/docs/source/config_file.rst
+++ b/docs/source/config_file.rst
@@ -21,6 +21,10 @@ Most flags correspond closely to :ref:`command-line flags
 <command-line>` but there are some differences in flag names and some
 flags may take a different value based on the module being processed.
 
+Some flags support user home directory and environment variable expansion.
+To refer to the user home directory, use ``~`` at the beginning of the path.
+To expand environment variables use ``$VARNAME`` or ``${VARNAME}``.
+
 Config file format
 ******************
 
@@ -355,7 +359,8 @@ a list of import discovery options that may be used
 
 ``python_executable`` (string)
     Specifies the path to the Python executable to inspect to collect
-    a list of available :ref:`PEP 561 packages <installed-packages>`. Defaults to
+    a list of available :ref:`PEP 561 packages <installed-packages>`. User
+    home directory and environment variables will be expanded. Defaults to
     the executable used to run mypy.
 
 ``no_silence_site_packages`` (bool, default False)
@@ -366,13 +371,15 @@ a list of import discovery options that may be used
 ``mypy_path`` (string)
     Specifies the paths to use, after trying the paths from ``MYPYPATH`` environment
     variable.  Useful if you'd like to keep stubs in your repo, along with the config file.
+    Multiple paths are always separated with a ``:`` or ``,`` regardless of the platform.
+    User home directory and environment variables will be expanded.
 
 ``files`` (string)
     A comma-separated list of paths which should be checked by mypy if none are given on the command
     line. Supports recursive file globbing using
     [the glob library](https://docs.python.org/3/library/glob.html), where `*` (e.g. `*.py`) matches
     files in the current directory and `**/` (e.g. `**/*.py`) matches files in any directories below
-    the current one.
+    the current one. User home directory and environment variables will be expanded.
 
 
 Platform configuration
@@ -447,7 +454,8 @@ section of the command line docs.
 
 ``custom_typeshed_dir`` (string)
     Specifies an alternative directory to look for stubs instead of the
-    default ``typeshed`` directory.
+    default ``typeshed`` directory. User home directory and environment
+    variables will be expanded.
 
 ``warn_incomplete_stub`` (bool, default False)
     Warns about missing type annotations in typeshed.  This is only relevant
diff --git a/mypy/config_parser.py b/mypy/config_parser.py
index 509b2d5e84d77..47d6008f7299a 100644
--- a/mypy/config_parser.py
+++ b/mypy/config_parser.py
@@ -34,6 +34,14 @@ def parse_version(v: str) -> Tuple[int, int]:
     return major, minor
 
 
+def expand_path(path: str) -> str:
+    """Expand the user home directory and any environment variables contained within
+    the provided path.
+    """
+
+    return os.path.expandvars(os.path.expanduser(path))
+
+
 def split_and_match_files(paths: str) -> List[str]:
     """Take a string representing a list of files/directories (with support for globbing
     through the glob library).
@@ -45,7 +53,7 @@ def split_and_match_files(paths: str) -> List[str]:
     expanded_paths = []
 
     for path in paths.split(','):
-        path = path.strip()
+        path = expand_path(path.strip())
         globbed_files = fileglob.glob(path, recursive=True)
         if globbed_files:
             expanded_paths.extend(globbed_files)
@@ -63,8 +71,8 @@ def split_and_match_files(paths: str) -> List[str]:
     'python_version': parse_version,
     'strict_optional_whitelist': lambda s: s.split(),
     'custom_typing_module': str,
-    'custom_typeshed_dir': str,
-    'mypy_path': lambda s: [p.strip() for p in re.split('[,:]', s)],
+    'custom_typeshed_dir': expand_path,
+    'mypy_path': lambda s: [expand_path(p.strip()) for p in re.split('[,:]', s)],
     'files': split_and_match_files,
     'quickstart_file': str,
     'junit_xml': str,
@@ -75,6 +83,8 @@ def split_and_match_files(paths: str) -> List[str]:
     'always_true': lambda s: [p.strip() for p in s.split(',')],
     'always_false': lambda s: [p.strip() for p in s.split(',')],
     'package_root': lambda s: [p.strip() for p in s.split(',')],
+    'cache_dir': expand_path,
+    'python_executable': expand_path,
 }  # type: Final
 
 
@@ -223,8 +233,6 @@ def parse_section(prefix: str, template: Options,
         except ValueError as err:
             print("%s%s: %s" % (prefix, key, err), file=stderr)
             continue
-        if key == 'cache_dir':
-            v = os.path.expandvars(os.path.expanduser(v))
         if key == 'silent_imports':
             print("%ssilent_imports has been replaced by "
                   "ignore_missing_imports=True; follow_imports=skip" % prefix, file=stderr)