diff --git a/compat/mingw.c b/compat/mingw.c
index 731fdcbaf21547..41eff1d3350560 100644
--- a/compat/mingw.c
+++ b/compat/mingw.c
@@ -2218,6 +2218,62 @@ int handle_long_path(wchar_t *path, int len, int max_path, int expand)
 	}
 }
 
+static void setup_windows_environment()
+{
+	char *tmp;
+
+	/* on Windows it is TMP and TEMP */
+	if (!getenv("TMPDIR")) {
+		if (!(tmp = getenv("TMP")))
+			tmp = getenv("TEMP");
+		if (tmp)
+			setenv("TMPDIR", tmp, 1);
+	}
+
+	if ((tmp = getenv("TMPDIR"))) {
+		/*
+		 * Convert all dir separators to forward slashes,
+		 * to help shell commands called from the Git
+		 * executable (by not mistaking the dir separators
+		 * for escape characters).
+		 */
+		for (; *tmp; tmp++)
+			if (*tmp == '\\')
+				*tmp = '/';
+	}
+
+	if (!getenv("TZ") && (tmp = getenv("MSYS2_TZ")))
+		setenv("TZ", tmp, 1);
+
+	/* simulate TERM to enable auto-color (see color.c) */
+	if (!getenv("TERM"))
+		setenv("TERM", "cygwin", 1);
+
+	/* calculate HOME if not set */
+	if (!getenv("HOME")) {
+		/*
+		 * try $HOMEDRIVE$HOMEPATH - the home share may be a network
+		 * location, thus also check if the path exists (i.e. is not
+		 * disconnected)
+		 */
+		if ((tmp = getenv("HOMEDRIVE"))) {
+			struct strbuf buf = STRBUF_INIT;
+			strbuf_addstr(&buf, tmp);
+			if ((tmp = getenv("HOMEPATH"))) {
+				strbuf_addstr(&buf, tmp);
+				if (is_directory(buf.buf))
+					setenv("HOME", buf.buf, 1);
+				else
+					tmp = NULL; /* use $USERPROFILE */
+			}
+			strbuf_release(&buf);
+		}
+		/* use $USERPROFILE if the home share is not available */
+		if (!tmp && (tmp = getenv("USERPROFILE")))
+			setenv("HOME", tmp, 1);
+	}
+}
+
 /*
  * Disable MSVCRT command line wildcard expansion (__getmainargs called from
  * mingw startup code, see init.c in mingw runtime).
@@ -2287,26 +2343,8 @@ void mingw_startup()
 	__argv[0] = wcstoutfdup_startup(buffer, _wpgmptr, maxlen);
 	for (i = 1; i < argc; i++)
 		__argv[i] = wcstoutfdup_startup(buffer, wargv[i], maxlen);
-	for (i = 0; wenv[i]; i++) {
+	for (i = 0; wenv[i]; i++)
 		environ[i] = wcstoutfdup_startup(buffer, wenv[i], maxlen);
-		if (!strncasecmp(environ[i], "MSYS2_TZ=", 9)) {
-			char *to_free = environ[i];
-			environ[i] = xstrdup(to_free + 6);
-			free(to_free);
-		}
-		if (!strncasecmp(environ[i], "TMP=", 4)) {
-			/*
-			 * Convert all dir separators to forward slashes,
-			 * to help shell commands called from the Git
-			 * executable (by not mistaking the dir separators
-			 * for escape characters).
-			 */
-			char *p;
-			for (p = environ[i]; *p; p++)
-				if (*p == '\\')
-					*p = '/';
-		}
-	}
 	environ[i] = NULL;
 	free(buffer);
 
@@ -2314,19 +2352,7 @@ void mingw_startup()
 	qsort(environ, i, sizeof(char*), compareenv);
 
 	/* fix Windows specific environment settings */
-
-	/* on Windows it is TMP and TEMP */
-	if (!mingw_getenv("TMPDIR")) {
-		const char *tmp = mingw_getenv("TMP");
-		if (!tmp)
-			tmp = mingw_getenv("TEMP");
-		if (tmp)
-			setenv("TMPDIR", tmp, 1);
-	}
-
-	/* simulate TERM to enable auto-color (see color.c) */
-	if (!getenv("TERM"))
-		setenv("TERM", "cygwin", 1);
+	setup_windows_environment();
 
 	/*
 	 * Avoid a segmentation fault when cURL tries to set the CHARSET
diff --git a/compat/win32/git-wrapper.c b/compat/win32/git-wrapper.c
index 714c3d8ef85fd6..619070b8c2b20f 100644
--- a/compat/win32/git-wrapper.c
+++ b/compat/win32/git-wrapper.c
@@ -48,21 +48,33 @@ static void setup_environment(LPWSTR exepath, int full_path)
 		L"MINGW%d", (int) sizeof(void *) * 8);
 	SetEnvironmentVariable(L"MSYSTEM", msystem);
 
-	/* if not set, set TERM to cygwin */
-	if (!GetEnvironmentVariable(L"TERM", NULL, 0))
-		SetEnvironmentVariable(L"TERM", L"cygwin");
-
 	/* if not set, set PLINK_PROTOCOL to ssh */
 	if (!GetEnvironmentVariable(L"PLINK_PROTOCOL", NULL, 0))
 		SetEnvironmentVariable(L"PLINK_PROTOCOL", L"ssh");
 
-	/* set HOME to %HOMEDRIVE%%HOMEPATH% or %USERPROFILE%
+	/*
+	 * set HOME to %HOMEDRIVE%%HOMEPATH% or %USERPROFILE%
 	 * With roaming profiles: HOMEPATH is the roaming location and
 	 * USERPROFILE is the local location
 	 */
 	if (!GetEnvironmentVariable(L"HOME", NULL, 0)) {
 		LPWSTR e = NULL;
 		len = GetEnvironmentVariable(L"HOMEPATH", NULL, 0);
+		if (len) {
+			DWORD attr, drvlen = GetEnvironmentVariable(L"HOMEDRIVE", NULL, 0);
+			e = (LPWSTR)malloc(sizeof(WCHAR) * (drvlen + len));
+			drvlen = GetEnvironmentVariable(L"HOMEDRIVE", e, drvlen);
+			GetEnvironmentVariable(L"HOMEPATH", e + drvlen, len);
+			/* check if the path exists */
+			attr = GetFileAttributesW(e);
+			if (attr != INVALID_FILE_ATTRIBUTES
+					&& (attr & FILE_ATTRIBUTE_DIRECTORY))
+				SetEnvironmentVariable(L"HOME", e);
+			else
+				len = 0; /* use USERPROFILE */
+			free(e);
+		}
+
 		if (len == 0) {
 			len = GetEnvironmentVariable(L"USERPROFILE", NULL, 0);
 			if (len != 0) {
@@ -72,15 +84,6 @@ static void setup_environment(LPWSTR exepath, int full_path)
 				free(e);
 			}
 		}
-		else {
-			int n;
-			len += GetEnvironmentVariable(L"HOMEDRIVE", NULL, 0);
-			e = (LPWSTR)malloc(sizeof(WCHAR) * (len + 2));
-			n = GetEnvironmentVariable(L"HOMEDRIVE", e, len);
-			GetEnvironmentVariable(L"HOMEPATH", &e[n], len-n);
-			SetEnvironmentVariable(L"HOME", e);
-			free(e);
-		}
 	}
 
 	/* extend the PATH */