diff --git a/src/vs/server/node/remoteTerminalChannel.ts b/src/vs/server/node/remoteTerminalChannel.ts
index 676847dd71a..fc9f72d62c5 100644
--- a/src/vs/server/node/remoteTerminalChannel.ts
+++ b/src/vs/server/node/remoteTerminalChannel.ts
@@ -69,7 +69,7 @@ class CustomVariableResolver extends AbstractVariableResolverService {
 			getLineNumber: (): string | undefined => {
 				return resolvedVariables['lineNumber'];
 			}
-		}, undefined, Promise.resolve(env));
+		}, undefined, Promise.resolve(os.homedir()), Promise.resolve(env));
 	}
 }
 
diff --git a/src/vs/workbench/api/common/extHostDebugService.ts b/src/vs/workbench/api/common/extHostDebugService.ts
index ac4d2f1542f..31921d3cbef 100644
--- a/src/vs/workbench/api/common/extHostDebugService.ts
+++ b/src/vs/workbench/api/common/extHostDebugService.ts
@@ -941,7 +941,12 @@ export class ExtHostDebugConsole {
 
 export class ExtHostVariableResolverService extends AbstractVariableResolverService {
 
-	constructor(folders: vscode.WorkspaceFolder[], editorService: ExtHostDocumentsAndEditors | undefined, configurationService: ExtHostConfigProvider, editorTabs: IExtHostEditorTabs, workspaceService?: IExtHostWorkspace) {
+	constructor(folders: vscode.WorkspaceFolder[],
+		editorService: ExtHostDocumentsAndEditors | undefined,
+		configurationService: ExtHostConfigProvider,
+		editorTabs: IExtHostEditorTabs,
+		workspaceService?: IExtHostWorkspace,
+		userHome?: string) {
 		function getActiveUri(): URI | undefined {
 			if (editorService) {
 				const activeEditor = editorService.activeEditor();
@@ -1019,7 +1024,7 @@ export class ExtHostVariableResolverService extends AbstractVariableResolverServ
 				}
 				return undefined;
 			}
-		}, undefined, Promise.resolve(process.env));
+		}, undefined, userHome ? Promise.resolve(userHome) : undefined, Promise.resolve(process.env));
 	}
 }
 
diff --git a/src/vs/workbench/api/node/extHostDebugService.ts b/src/vs/workbench/api/node/extHostDebugService.ts
index a0bb7828978..b235b34a8fc 100644
--- a/src/vs/workbench/api/node/extHostDebugService.ts
+++ b/src/vs/workbench/api/node/extHostDebugService.ts
@@ -5,6 +5,7 @@
 
 import * as nls from 'vs/nls';
 import type * as vscode from 'vscode';
+import { homedir } from 'os';
 import * as platform from 'vs/base/common/platform';
 import { DebugAdapterExecutable, ThemeIcon } from 'vs/workbench/api/common/extHostTypes';
 import { ExecutableDebugAdapter, SocketDebugAdapter, NamedPipeDebugAdapter } from 'vs/workbench/contrib/debug/node/debugAdapter';
@@ -155,7 +156,7 @@ export class ExtHostDebugService extends ExtHostDebugServiceBase {
 	}
 
 	protected createVariableResolver(folders: vscode.WorkspaceFolder[], editorService: ExtHostDocumentsAndEditors, configurationService: ExtHostConfigProvider): AbstractVariableResolverService {
-		return new ExtHostVariableResolverService(folders, editorService, configurationService, this._editorTabs, this._workspaceService);
+		return new ExtHostVariableResolverService(folders, editorService, configurationService, this._editorTabs, this._workspaceService, homedir());
 	}
 }
 
diff --git a/src/vs/workbench/api/node/extHostTask.ts b/src/vs/workbench/api/node/extHostTask.ts
index 094e54aa851..c47e3203461 100644
--- a/src/vs/workbench/api/node/extHostTask.ts
+++ b/src/vs/workbench/api/node/extHostTask.ts
@@ -131,7 +131,7 @@ export class ExtHostTask extends ExtHostTaskBase {
 	private async getVariableResolver(workspaceFolders: vscode.WorkspaceFolder[]): Promise<ExtHostVariableResolverService> {
 		if (this._variableResolver === undefined) {
 			const configProvider = await this._configurationService.getConfigProvider();
-			this._variableResolver = new ExtHostVariableResolverService(workspaceFolders, this._editorService, configProvider, this.editorTabs, this.workspaceService);
+			this._variableResolver = new ExtHostVariableResolverService(workspaceFolders, this._editorService, configProvider, this.editorTabs, this.workspaceService, homedir());
 		}
 		return this._variableResolver;
 	}
diff --git a/src/vs/workbench/services/configurationResolver/browser/configurationResolverService.ts b/src/vs/workbench/services/configurationResolver/browser/configurationResolverService.ts
index 9917a6ffdda..473e7f2eca8 100644
--- a/src/vs/workbench/services/configurationResolver/browser/configurationResolverService.ts
+++ b/src/vs/workbench/services/configurationResolver/browser/configurationResolverService.ts
@@ -113,7 +113,7 @@ export abstract class BaseConfigurationResolverService extends AbstractVariableR
 				}
 				return undefined;
 			}
-		}, labelService, envVariablesPromise);
+		}, labelService, pathService.userHome().then(home => home.path), envVariablesPromise);
 	}
 
 	public override async resolveWithInteractionReplace(folder: IWorkspaceFolder | undefined, config: any, section?: string, variables?: IStringDictionary<string>, target?: ConfigurationTarget): Promise<any> {
diff --git a/src/vs/workbench/services/configurationResolver/common/variableResolver.ts b/src/vs/workbench/services/configurationResolver/common/variableResolver.ts
index 5f5a35e798f..3106a335007 100644
--- a/src/vs/workbench/services/configurationResolver/common/variableResolver.ts
+++ b/src/vs/workbench/services/configurationResolver/common/variableResolver.ts
@@ -28,6 +28,8 @@ export interface IVariableResolveContext {
 	getLineNumber(): string | undefined;
 }
 
+type Environment = { env?: IProcessEnvironment; userHome?: string };
+
 export class AbstractVariableResolverService implements IConfigurationResolverService {
 
 	static readonly VARIABLE_LHS = '${';
@@ -38,11 +40,13 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 	private _context: IVariableResolveContext;
 	private _labelService?: ILabelService;
 	private _envVariablesPromise?: Promise<IProcessEnvironment>;
+	private _userHomePromise?: Promise<string>;
 	protected _contributedVariables: Map<string, () => Promise<string | undefined>> = new Map();
 
-	constructor(_context: IVariableResolveContext, _labelService?: ILabelService, _envVariablesPromise?: Promise<IProcessEnvironment>) {
+	constructor(_context: IVariableResolveContext, _labelService?: ILabelService, _userHomePromise?: Promise<string>, _envVariablesPromise?: Promise<IProcessEnvironment>) {
 		this._context = _context;
 		this._labelService = _labelService;
+		this._userHomePromise = _userHomePromise;
 		if (_envVariablesPromise) {
 			this._envVariablesPromise = _envVariablesPromise.then(envVariables => {
 				return this.prepareEnv(envVariables);
@@ -70,7 +74,11 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 	public async resolveAsync(root: IWorkspaceFolder | undefined, value: string[]): Promise<string[]>;
 	public async resolveAsync(root: IWorkspaceFolder | undefined, value: IStringDictionary<string>): Promise<IStringDictionary<string>>;
 	public async resolveAsync(root: IWorkspaceFolder | undefined, value: any): Promise<any> {
-		return this.recursiveResolve(await this._envVariablesPromise, root ? root.uri : undefined, value);
+		const environment: Environment = {
+			env: await this._envVariablesPromise,
+			userHome: await this._userHomePromise
+		};
+		return this.recursiveResolve(environment, root ? root.uri : undefined, value);
 	}
 
 	private async resolveAnyBase(workspaceFolder: IWorkspaceFolder | undefined, config: any, commandValueMapping?: IStringDictionary<string>, resolvedVariables?: Map<string, string>): Promise<any> {
@@ -92,7 +100,11 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 		delete result.linux;
 
 		// substitute all variables recursively in string values
-		return this.recursiveResolve(await this._envVariablesPromise, workspaceFolder ? workspaceFolder.uri : undefined, result, commandValueMapping, resolvedVariables);
+		const environmentPromises: Environment = {
+			env: await this._envVariablesPromise,
+			userHome: await this._userHomePromise
+		};
+		return this.recursiveResolve(environmentPromises, workspaceFolder ? workspaceFolder.uri : undefined, result, commandValueMapping, resolvedVariables);
 	}
 
 	public async resolveAnyAsync(workspaceFolder: IWorkspaceFolder | undefined, config: any, commandValueMapping?: IStringDictionary<string>): Promise<any> {
@@ -121,7 +133,7 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 		}
 	}
 
-	private recursiveResolve(environment: IProcessEnvironment | undefined, folderUri: uri | undefined, value: any, commandValueMapping?: IStringDictionary<string>, resolvedVariables?: Map<string, string>): any {
+	private recursiveResolve(environment: Environment, folderUri: uri | undefined, value: any, commandValueMapping?: IStringDictionary<string>, resolvedVariables?: Map<string, string>): any {
 		if (types.isString(value)) {
 			return this.resolveString(environment, folderUri, value, commandValueMapping, resolvedVariables);
 		} else if (types.isArray(value)) {
@@ -137,7 +149,7 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 		return value;
 	}
 
-	private resolveString(environment: IProcessEnvironment | undefined, folderUri: uri | undefined, value: string, commandValueMapping: IStringDictionary<string> | undefined, resolvedVariables?: Map<string, string>): string {
+	private resolveString(environment: Environment, folderUri: uri | undefined, value: string, commandValueMapping: IStringDictionary<string> | undefined, resolvedVariables?: Map<string, string>): string {
 
 		// loop through all variables occurrences in 'value'
 		const replaced = value.replace(AbstractVariableResolverService.VARIABLE_REGEXP, (match: string, variable: string) => {
@@ -166,7 +178,7 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 		return this._labelService ? this._labelService.getUriLabel(displayUri, { noPrefix: true }) : displayUri.fsPath;
 	}
 
-	private evaluateSingleVariable(environment: IProcessEnvironment | undefined, match: string, variable: string, folderUri: uri | undefined, commandValueMapping: IStringDictionary<string> | undefined): string {
+	private evaluateSingleVariable(environment: Environment, match: string, variable: string, folderUri: uri | undefined, commandValueMapping: IStringDictionary<string> | undefined): string {
 
 		// try to separate variable arguments from variable name
 		let argument: string | undefined;
@@ -225,9 +237,9 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 
 			case 'env':
 				if (argument) {
-					if (environment) {
+					if (environment.env) {
 						// Depending on the source of the environment, on Windows, the values may all be lowercase.
-						const env = environment[isWindows ? argument.toLowerCase() : argument];
+						const env = environment.env[isWindows ? argument.toLowerCase() : argument];
 						if (types.isString(env)) {
 							return env;
 						}
@@ -270,6 +282,13 @@ export class AbstractVariableResolverService implements IConfigurationResolverSe
 					case 'workspaceFolderBasename':
 						return paths.basename(this.fsPath(getFolderUri()));
 
+					case 'userHome': {
+						if (environment.userHome) {
+							return environment.userHome;
+						}
+						throw new Error(localize('canNotResolveUserHome', "Variable {0} can not be resolved. UserHome path is not defined", match));
+					}
+
 					case 'lineNumber': {
 						const lineNumber = this._context.getLineNumber();
 						if (lineNumber) {