diff --git a/cmd/ipfswatch/main.go b/cmd/ipfswatch/main.go
index 836b7e8f6..d4beb6208 100644
--- a/cmd/ipfswatch/main.go
+++ b/cmd/ipfswatch/main.go
@@ -30,9 +30,15 @@ func main() {
 	// 1. --repo flag
 	// 2. IPFS_PATH environment variable
 	// 3. default repo path
-	ipfsPath := config.DefaultPathRoot
+	var ipfsPath string
 	if *repoPath != "" {
 		ipfsPath = *repoPath
+	} else {
+		var err error
+		ipfsPath, err = fsrepo.BestKnownPath()
+		if err != nil {
+			log.Fatal(err)
+		}
 	}
 
 	if err := run(ipfsPath, *watchPath); err != nil {
@@ -43,7 +49,7 @@ func main() {
 func run(ipfsPath, watchPath string) error {
 
 	proc := process.WithParent(process.Background())
-	log.Printf("running IPFSWatch on %s using repo at %s...", watchPath, ipfsPath)
+	log.Printf("running IPFSWatch on '%s' using repo at '%s'...", watchPath, ipfsPath)
 
 	ipfsPath, err := homedir.Expand(ipfsPath)
 	if err != nil {
diff --git a/repo/fsrepo/misc.go b/repo/fsrepo/misc.go
new file mode 100644
index 000000000..07730b961
--- /dev/null
+++ b/repo/fsrepo/misc.go
@@ -0,0 +1,23 @@
+package fsrepo
+
+import (
+	"os"
+
+	homedir "github.com/jbenet/go-ipfs/Godeps/_workspace/src/github.com/mitchellh/go-homedir"
+	"github.com/jbenet/go-ipfs/repo/config"
+)
+
+// BestKnownPath returns the best known fsrepo path. If the ENV override is
+// present, this function returns that value. Otherwise, it returns the default
+// repo path.
+func BestKnownPath() (string, error) {
+	ipfsPath := config.DefaultPathRoot
+	if os.Getenv(config.EnvDir) != "" {
+		ipfsPath = os.Getenv(config.EnvDir)
+	}
+	ipfsPath, err := homedir.Expand(ipfsPath)
+	if err != nil {
+		return "", err
+	}
+	return ipfsPath, nil
+}