diff --git a/README.md b/README.md
index 6fc940814..dee7f8995 100644
--- a/README.md
+++ b/README.md
@@ -106,7 +106,9 @@ This command will retrieve the given package manager from the specified archive
 
 - `COREPACK_ENABLE_NETWORK` can be set to `0` to prevent Corepack from accessing the network (in which case you'll be responsible for hydrating the package manager versions that will be required for the projects you'll run, using `corepack hydrate`).
 
-- `COREPACK_HOME` can be set in order to define where Corepack should install the package managers. By default it is set to `$HOME/.node/corepack`.
+- `COREPACK_HOME` can be set in order to define where Corepack should install
+  the package managers. By default it is set to `%LOCALAPPDATA%\node\corepack`
+  on Windows, and to `$HOME/.cache/node/corepack` everywhere else.
 
 - `COREPACK_ROOT` has no functional impact on Corepack itself; it's automatically being set in your environment by Corepack when it shells out to the underlying package managers, so that they can feature-detect its presence (useful for commands like `yarn init`).
 
diff --git a/sources/folderUtils.ts b/sources/folderUtils.ts
index 75b803d25..1d2d70b83 100644
--- a/sources/folderUtils.ts
+++ b/sources/folderUtils.ts
@@ -1,10 +1,41 @@
-import {mkdirSync}        from 'fs';
-import {homedir, tmpdir}  from 'os';
-import {join}             from 'path';
-import type { NodeError } from './nodeUtils';
+import {existsSync, mkdirSync, renameSync} from 'fs';
+import {homedir, tmpdir}                   from 'os';
+import {join}                              from 'path';
+import process                             from 'process';
+
+import type {NodeError}                    from './nodeUtils';
 
 export function getInstallFolder() {
-  return process.env.COREPACK_HOME ?? join(homedir(), `.node/corepack`);
+  if (process.env.COREPACK_HOME == null) {
+    // TODO: remove this block on the next major.
+    const oldCorepackDefaultHome = join(homedir(), `.node`, `corepack`);
+    const newCorepackDefaultHome = join(
+      process.env.XDG_CACHE_HOME ??
+        process.env.LOCALAPPDATA ??
+        join(
+          homedir(),
+          process.platform === `win32` ? `AppData/Local` : `.cache`,
+        ),
+      `node/corepack`,
+    );
+    if (
+      existsSync(oldCorepackDefaultHome) &&
+      !existsSync(newCorepackDefaultHome)
+    ) {
+      mkdirSync(newCorepackDefaultHome, {recursive: true});
+      renameSync(oldCorepackDefaultHome, newCorepackDefaultHome);
+    }
+    return newCorepackDefaultHome;
+  }
+  return (
+    process.env.COREPACK_HOME ??
+    join(
+      process.env.XDG_CACHE_HOME ??
+        process.env.LOCALAPPDATA ??
+        join(homedir(), process.platform === `win32` ? `AppData/Local` : `.cache`),
+      `node/corepack`,
+    )
+  );
 }
 
 export function getTemporaryFolder(target: string = tmpdir()) {