diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7273d39a..70ebcac6 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,7 @@
 
 ## Features
 
+- $BAT_CONFIG_DIR is now a recognized environment variable and has precedent over $XDG_CONFIG_HOME. (@billrisher)
 
 ## Bugfixes
 
diff --git a/src/bin/bat/directories.rs b/src/bin/bat/directories.rs
index 7bb3e7d5..1a2f1996 100644
--- a/src/bin/bat/directories.rs
+++ b/src/bin/bat/directories.rs
@@ -4,8 +4,9 @@ use std::path::{Path, PathBuf};
 use lazy_static::lazy_static;
 
 /// Wrapper for 'dirs' that treats MacOS more like Linux, by following the XDG specification.
-/// This means that the `XDG_CACHE_HOME` and `XDG_CONFIG_HOME` environment variables are
-/// checked first. The fallback directories are `~/.cache/bat` and `~/.config/bat`, respectively.
+/// The `XDG_CACHE_HOME` environment variable is checked first. `BAT_CONFIG_DIR`
+///  is then checked before the `XDG_CONFIG_HOME` environment variable.
+///  The fallback directories are `~/.cache/bat` and `~/.config/bat`, respectively.
 pub struct BatProjectDirs {
     cache_dir: PathBuf,
     config_dir: PathBuf,
@@ -14,17 +15,24 @@ pub struct BatProjectDirs {
 impl BatProjectDirs {
     fn new() -> Option<BatProjectDirs> {
         let cache_dir = BatProjectDirs::get_cache_dir()?;
+        
+        // Checks whether or not $BAT_CONFIG_DIR exists. If it doesn't, set our config dir
+        // to our system's default configuration home.
+        let config_dir = if let Some(config_dir_op) = env::var_os("BAT_CONFIG_DIR")
+            .map(PathBuf::from) {
+                config_dir_op
+            } else {
+                #[cfg(target_os = "macos")]
+                let config_dir_op = env::var_os("XDG_CONFIG_HOME")
+                    .map(PathBuf::from)
+                    .filter(|p| p.is_absolute())
+                    .or_else(|| dirs_next::home_dir().map(|d| d.join(".config")));
 
-        #[cfg(target_os = "macos")]
-        let config_dir_op = env::var_os("XDG_CONFIG_HOME")
-            .map(PathBuf::from)
-            .filter(|p| p.is_absolute())
-            .or_else(|| dirs_next::home_dir().map(|d| d.join(".config")));
+                #[cfg(not(target_os = "macos"))]
+                let config_dir_op = dirs_next::config_dir();
 
-        #[cfg(not(target_os = "macos"))]
-        let config_dir_op = dirs_next::config_dir();
-
-        let config_dir = config_dir_op.map(|d| d.join("bat"))?;
+                config_dir_op.map(|d| d.join("bat"))?
+            };
 
         Some(BatProjectDirs {
             cache_dir,
diff --git a/tests/integration_tests.rs b/tests/integration_tests.rs
index 18f16123..942894fd 100644
--- a/tests/integration_tests.rs
+++ b/tests/integration_tests.rs
@@ -747,6 +747,25 @@ fn config_location_when_generating() {
     assert!(tmp_config_path.exists());
 }
 
+#[test]
+fn config_location_from_bat_config_dir_variable() {
+    let bat_conf_dir = tempdir().expect("can't create temporary directory.").path().join("bat_conf_dir/");
+
+    // Create file at BAT_CONFIG_DIR
+    bat_with_config()
+        .env("BAT_CONFIG_DIR", bat_conf_dir.to_str().unwrap())
+        .arg("--generate-config-file")
+        .assert()
+        .success()
+        .stdout(
+            predicate::str::is_match("Success! Config file written to .*config\n")
+                .unwrap()
+        );
+
+    // Ensure generated config file exists.
+    assert!(bat_conf_dir.join("config").exists());
+}
+
 #[test]
 fn config_read_arguments_from_file() {
     bat_with_config()