diff --git a/env.c b/env.c
index 5534ca308..008521ad5 100644
--- a/env.c
+++ b/env.c
@@ -52,6 +52,9 @@
 #include "env_universal.h"
 #include "input_common.h"
 #include "event.h"
+#include "path.h"
+#include "halloc.h"
+#include "halloc_util.h"
 
 #include "complete.h"
 
@@ -710,6 +713,19 @@ int env_set( const wchar_t *key,
 	
 	CHECK( key, ENV_INVALID );
 		
+	if( val && CONTAINS( key, L"PWD", L"HOME" ) )
+	{
+		void *context = halloc( 0, 0 );
+		const wchar_t *val_canonical = path_make_canonical( context, val );
+		if( wcscmp( val_canonical, val ) )
+		{
+			int res = env_set( key, val_canonical, var_mode );
+			halloc_free( context );
+			return res;
+		}
+		halloc_free( context );
+	}
+
 	if( (var_mode & ENV_USER ) && 
 		hash_get( &env_read_only, key ) )
 	{
diff --git a/fish_tests.c b/fish_tests.c
index 31ea2b049..e7c180183 100644
--- a/fish_tests.c
+++ b/fish_tests.c
@@ -44,6 +44,8 @@
 #include "output.h"
 #include "exec.h"
 #include "event.h"
+#include "path.h"
+#include "halloc.h"
 #include "halloc_util.h"
 
 /**
@@ -600,6 +602,26 @@ static void test_expand()
 	
 }
 
+static void test_path()
+{
+	say( L"Testing path functions" );
+
+	void *context = halloc( 0, 0 );
+	
+
+	wchar_t *can = path_make_canonical( context, L"//foo//////bar/" );
+	
+	if( wcscmp( can, L"/foo/bar" ) )
+	{
+		err( L"Bug in canonical PATH code" );
+	}
+	
+	halloc_free( context );
+	
+}
+
+
+
 /**
    Test speed of completion calculations
 */
@@ -673,6 +695,9 @@ void perf_complete()
 	
 }
 
+
+
+
 /**
    Main test 
 */
@@ -697,6 +722,7 @@ int main( int argc, char **argv )
 	test_tok();
 	test_parser();
 	test_expand();
+	test_path();
 		
 	say( L"Encountered %d errors in low-level tests", err_count );
 
diff --git a/path.c b/path.c
index 469c702c0..7cb3e0a5a 100644
--- a/path.c
+++ b/path.c
@@ -266,3 +266,38 @@ wchar_t *path_get_config( void *context)
 	
 }
 
+wchar_t *path_make_canonical( void *context, const wchar_t *path )
+{
+	wchar_t *res = halloc_wcsdup( context, path );
+	wchar_t *in, *out;
+	
+	in = out = res;
+	
+	while( *in )
+	{
+		if( *in == L'/' )
+		{
+			while( *(in+1) == L'/' )
+			{
+				in++;
+			}
+		}
+		*out = *in;
+	
+		out++;
+		in++;
+	}
+
+	while( 1 )
+	{
+		if( out == res )
+			break;
+		if( *(out-1) != L'/' )
+			break;
+		out--;
+	}
+	*out = 0;
+		
+	return res;
+}
+
diff --git a/path.h b/path.h
index c825160b6..51213b5d3 100644
--- a/path.h
+++ b/path.h
@@ -40,4 +40,8 @@ wchar_t *path_get_path( void *context, const wchar_t *cmd );
 */
 wchar_t *path_get_cdpath( void *context, wchar_t *in );
 
+
+wchar_t *path_make_canonical( void *context, const wchar_t *path );
+
+
 #endif