diff --git a/ChangeLog b/ChangeLog
index 0fd403628c88..490ac16aefe6 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,5 +1,10 @@
 # -*- coding: utf-8 -*-
 
+2010-07-10  Luis Lavena <luislavena@gmail.com>
+
+	* lib/rubygems.rb: Expand Windows user home canditates for Ruby 1.8
+	  Bug #28371
+
 2010-05-13  Eric Hodel  <drbrain@segment7.net>
 
 	* lib/rubygems.rb:  1.3.7.
diff --git a/lib/rubygems.rb b/lib/rubygems.rb
index 665b7852cdad..f5fb08a1604d 100644
--- a/lib/rubygems.rb
+++ b/lib/rubygems.rb
@@ -499,11 +499,11 @@ def self.find_files(path)
   def self.find_home
     unless RUBY_VERSION > '1.9' then
       ['HOME', 'USERPROFILE'].each do |homekey|
-        return ENV[homekey] if ENV[homekey]
+        return File.expand_path(ENV[homekey]) if ENV[homekey]
       end
 
       if ENV['HOMEDRIVE'] && ENV['HOMEPATH'] then
-        return "#{ENV['HOMEDRIVE']}#{ENV['HOMEPATH']}"
+        return File.expand_path("#{ENV['HOMEDRIVE']}#{ENV['HOMEPATH']}")
       end
     end
 
diff --git a/test/test_gem.rb b/test/test_gem.rb
index 9568ea418431..8e310cd786bc 100644
--- a/test/test_gem.rb
+++ b/test/test_gem.rb
@@ -597,27 +597,48 @@ def test_self_user_home
     end
   end
 
+  def test_self_user_home_userprofile
+    skip 'Ruby 1.9 properly handles ~ path expansion' if RUBY_VERSION > '1.9'
+
+    Gem.clear_paths
+
+    # safe-keep env variables
+    orig_home, orig_user_profile = ENV['HOME'], ENV['USERPROFILE']
+
+    # prepare for the test
+    ENV.delete('HOME')
+    ENV['USERPROFILE'] = "W:\\Users\\RubyUser"
+
+    assert_equal 'W:/Users/RubyUser', Gem.user_home
+
+  ensure
+    ENV['HOME'] = orig_home
+    ENV['USERPROFILE'] = orig_user_profile
+  end
+
   def test_self_user_home_user_drive_and_path
+    skip 'Ruby 1.9 properly handles ~ path expansion' if RUBY_VERSION > '1.9'
+
     Gem.clear_paths
 
     # safe-keep env variables
     orig_home, orig_user_profile = ENV['HOME'], ENV['USERPROFILE']
-    orig_user_drive, orig_user_path = ENV['HOMEDRIVE'], ENV['HOMEPATH']
+    orig_home_drive, orig_home_path = ENV['HOMEDRIVE'], ENV['HOMEPATH']
 
     # prepare the environment
     ENV.delete('HOME')
     ENV.delete('USERPROFILE')
     ENV['HOMEDRIVE'] = 'Z:'
-    ENV['HOMEPATH'] = '\\Users\\RubyUser'
+    ENV['HOMEPATH'] = "\\Users\\RubyUser"
 
-    assert_equal "Z:\\Users\\RubyUser", Gem.user_home
+    assert_equal 'Z:/Users/RubyUser', Gem.user_home
 
   ensure
     ENV['HOME'] = orig_home
     ENV['USERPROFILE'] = orig_user_profile
-    ENV['USERDRIVE'] = orig_user_drive
-    ENV['USERPATH'] = orig_user_path
-  end if '1.9' > RUBY_VERSION
+    ENV['HOMEDRIVE'] = orig_home_drive
+    ENV['HOMEPATH'] = orig_home_path
+  end
 
   def test_load_plugins
     with_plugin('load') { Gem.load_plugins }