diff --git a/lib/fs.js b/lib/fs.js
index ed1914a..98d458f 100644
--- a/lib/fs.js
+++ b/lib/fs.js
@@ -74,12 +74,13 @@ var twoPathMethods = [
  */
 exports.create = function (options) {
   var pwd = options.pwd;
-  if (typeof pwd === 'string') {
-    var _pwd = pwd;
+  if ('function' !== (typeof pwd)) {
+    var _pwd = ('string' === (typeof pwd)) ? pwd : process.env.PWD;
     pwd = function () {
       return _pwd;
     };
   }
+
   var _limitRootDir = options.limitRoot || pwd();
   _limitRootDir = _limitRootDir.replace(/\/+$/, '') + '/';
 
diff --git a/test/fs.test.js b/test/fs.test.js
index ec1d967..570d7c3 100644
--- a/test/fs.test.js
+++ b/test/fs.test.js
@@ -306,6 +306,12 @@ describe('fs.test.js', function () {
         fs.renameSync('../../../../../etc/hosts', 'foo/bar/rename_hosts.js');
       }).should.throw("EACCES, permission denied '../../../../../etc/hosts'");
     });
+
+    it('should undefined function pwd works fine', function () {
+      var yafs = require('../').create({
+        limitRoot: path.join(__dirname, 'fixtures'),
+      });
+    });
   });
 
 });