diff --git a/railties/lib/rails/commands/application.rb b/railties/lib/rails/commands/application.rb
index 7d84d3ae0e5f7..2ff29418c6f8d 100644
--- a/railties/lib/rails/commands/application.rb
+++ b/railties/lib/rails/commands/application.rb
@@ -10,8 +10,12 @@
 else
   ARGV.shift
   unless ARGV.delete("--no-rc")
-    customrc = ARGV.index('--rc')
-    railsrc = customrc ? ARGV.slice!(customrc, 2).last : File.join(File.expand_path("~"), '.railsrc')
+    customrc = ARGV.index{ |x| x.include?("--rc=") }
+    railsrc = if customrc
+                File.expand_path(ARGV.delete_at(customrc).gsub(/--rc=/, ""))
+              else
+                File.join(File.expand_path("~"), '.railsrc')
+              end
     if File.exist?(railsrc)
       extra_args_string = File.read(railsrc)
       extra_args = extra_args_string.split(/\n+/).map {|l| l.split}.flatten