diff --git a/README.md b/README.md
index 5cde882b4a..b9e141ba70 100644
--- a/README.md
+++ b/README.md
@@ -26,10 +26,11 @@ Assuming you already have all the usual building tools installed (e.g. gcc, meso
 * xcb-composite
 * xcb-image
 * xcb-present
-* xcb-xinerama (optional, disable with `-Dxinerama=false` meson configure flag)
+* xcb-xinerama (optional, disable with the `-Dxinerama=false` meson configure flag)
 * pixman
 * libdbus (optional, disable with the `-Ddbus=false` meson configure flag)
 * libconfig (optional, disable with the `-Dconfig_file=false` meson configure flag)
+* libxdg-basedir (optional, disable with the `-Dconfig_file=false` meson configure flag)
 * libGL (optional, disable with the `-Dopengl=false` meson configure flag)
 * libpcre (optional, disable with the `-Dregex=false` meson configure flag)
 * libev
diff --git a/src/config_libconfig.c b/src/config_libconfig.c
index 201f4d3f5b..c9e9910039 100644
--- a/src/config_libconfig.c
+++ b/src/config_libconfig.c
@@ -7,6 +7,7 @@
 
 #include <libgen.h>
 #include <libconfig.h>
+#include <basedir_fs.h>
 
 #include "common.h"
 #include "config.h"
@@ -36,79 +37,47 @@ lcfg_lookup_bool(const config_t *config, const char *path, bool *value) {
  */
 FILE *
 open_config_file(char *cpath, char **ppath) {
-  static const char *config_filename = "/compton.conf";
-  static const char *config_filename_legacy = "/.compton.conf";
-  static const char *config_home_suffix = "/.config";
-  static const char *config_system_dir = "/etc/xdg";
-
-  char *dir = NULL, *home = NULL;
-  char *path = cpath;
-  FILE *f = NULL;
-
-  if (path) {
-    f = fopen(path, "r");
-    if (f && ppath)
-      *ppath = path;
-    return f;
-  }
-
-  // Check user configuration file in $XDG_CONFIG_HOME firstly
-  if (!((dir = getenv("XDG_CONFIG_HOME")) && strlen(dir))) {
-    if (!((home = getenv("HOME")) && strlen(home)))
-      return NULL;
+  static const char *config_paths[] = {
+    "/compton.conf",
+    "/compton/compton.conf"
+  };
+  static const char config_filename_legacy[] = "/.compton.conf";
 
-    path = mstrjoin3(home, config_home_suffix, config_filename);
+  if (cpath) {
+    FILE *ret = fopen(cpath, "r");
+    if (ret && ppath)
+      *ppath = cpath;
+    return ret;
   }
-  else
-    path = mstrjoin(dir, config_filename);
-
-  f = fopen(path, "r");
 
-  if (f && ppath)
-    *ppath = path;
-  else
+  for (size_t i = 0; i < ARR_SIZE(config_paths); i++) {
+    char *path = xdgConfigFind(config_paths[i], NULL);
+    FILE *ret = fopen(path, "r");
+    if (ret) {
+      printf_errf("(): file is %s", path);
+      if (ppath) {
+        *ppath = strdup(path);
+      }
+    }
     free(path);
-  if (f)
-    return f;
-
-  // Then check user configuration file in $HOME
-  if ((home = getenv("HOME")) && strlen(home)) {
-    path = mstrjoin(home, config_filename_legacy);
-    f = fopen(path, "r");
-    if (f && ppath)
-      *ppath = path;
-    else
-      free(path);
-    if (f)
-      return f;
-  }
-
-  // Check system configuration file in $XDG_CONFIG_DIRS at last
-  if ((dir = getenv("XDG_CONFIG_DIRS")) && strlen(dir)) {
-    char *part = strtok(dir, ":");
-    while (part) {
-      path = mstrjoin(part, config_filename);
-      f = fopen(path, "r");
-      if (f && ppath)
-        *ppath = path;
-      else
-        free(path);
-      if (f)
-        return f;
-      part = strtok(NULL, ":");
+    if (ret) {
+      return ret;
     }
   }
-  else {
-    path = mstrjoin(config_system_dir, config_filename);
-    f = fopen(path, "r");
-    if (f && ppath)
+
+  // Fall back to legacy config file names
+  const char *home = getenv("HOME");
+  if (home && strlen(home)) {
+    auto path = ccalloc(strlen(home)+strlen(config_filename_legacy)+1, char);
+    strcpy(path, home);
+    strcpy(path+strlen(home), config_filename_legacy);
+    FILE *ret = fopen(path, "r");
+    if (ret && ppath)
       *ppath = path;
     else
       free(path);
-    if (f)
-      return f;
+    return ret;
   }
-
   return NULL;
 }
 
@@ -199,7 +168,7 @@ void parse_config_libconfig(session_t *ps, bool *shadow_enable,
     int read_result = config_read(&cfg, f);
     fclose(f);
     f = NULL;
-    if (CONFIG_FALSE == read_result) {
+    if (read_result == CONFIG_FALSE) {
       printf("Error when reading configuration file \"%s\", line %d: %s\n",
           path, config_error_line(&cfg), config_error_text(&cfg));
       config_destroy(&cfg);
@@ -210,7 +179,7 @@ void parse_config_libconfig(session_t *ps, bool *shadow_enable,
   config_set_auto_convert(&cfg, 1);
 
   if (path != ps->o.config_file) {
-    free(ps->o.config_file);
+    assert(ps->o.config_file == NULL);
     ps->o.config_file = path;
   }
 
diff --git a/src/diagnostic.c b/src/diagnostic.c
index 85d971a61d..0a37dd409b 100644
--- a/src/diagnostic.c
+++ b/src/diagnostic.c
@@ -17,6 +17,7 @@ void print_diagnostics(session_t *ps) {
 #ifdef __FAST_MATH__
 	printf("* Fast Math: Yes\n");
 #endif
+	printf("* Config file used: %s\n", ps->o.config_file ?: "None");
 }
 
 // vim: set noet sw=8 ts=8 :
diff --git a/src/meson.build b/src/meson.build
index bd874c4d0f..58f323e493 100644
--- a/src/meson.build
+++ b/src/meson.build
@@ -1,7 +1,7 @@
 deps = [
 	cc.find_library('m'),
 	cc.find_library('ev'),
-	dependency('xcb', version: '>=1.9.2')
+	dependency('xcb', version: '>=1.9.2'),
 ]
 
 srcs = ['compton.c', 'win.c', 'c2.c', 'x.c', 'config.c', 'diagnostic.c', 'string_utils.c']
@@ -25,7 +25,8 @@ if get_option('xinerama')
 endif
 
 if get_option('config_file')
-	deps += [dependency('libconfig', version: '>=1.4', required: true)]
+	deps += [dependency('libconfig', version: '>=1.4', required: true),
+	         dependency('libxdg-basedir', required: true)]
 	cflags += ['-DCONFIG_LIBCONFIG']
 	srcs += [ 'config_libconfig.c' ]
 endif