diff --git a/.changeset/fix-windows-models-cache-path.md b/.changeset/fix-windows-models-cache-path.md
new file mode 100644
index 000000000..2b471e863
--- /dev/null
+++ b/.changeset/fix-windows-models-cache-path.md
@@ -0,0 +1,5 @@
+---
+"@nanocollective/nanocoder": patch
+---
+
+Fixed models cache path on Windows by using `os.homedir()` instead of `process.env.HOME`, which is undefined on Windows. The cache now writes to the correct location instead of creating a literal `~` folder.
diff --git a/scripts/fetch-models.js b/scripts/fetch-models.js
index ad3460b3f..34bd57c6a 100755
--- a/scripts/fetch-models.js
+++ b/scripts/fetch-models.js
@@ -6,6 +6,7 @@
  */
 
 import * as fs from 'node:fs';
+import * as os from 'node:os';
 import * as path from 'node:path';
 import {request} from 'undici';
 import {xdgCache} from 'xdg-basedir';
@@ -16,8 +17,8 @@ const CACHE_EXPIRATION_MS = 7 * 24 * 60 * 60 * 1000; // 7 days
 // Get cache directory
 const DEFAULT_CACHE_DIR =
 	process.platform === 'darwin'
-		? path.join(process.env.HOME || '~', 'Library', 'Caches')
-		: path.join(process.env.HOME || '~', '.cache');
+		? path.join(os.homedir(), 'Library', 'Caches')
+		: path.join(os.homedir(), '.cache');
 
 const cacheBase = xdgCache || DEFAULT_CACHE_DIR;
 const cacheDir = path.join(cacheBase, 'nanocoder');
diff --git a/source/models/models-cache.spec.ts b/source/models/models-cache.spec.ts
index cbc8a2092..8f5eb45d8 100644
--- a/source/models/models-cache.spec.ts
+++ b/source/models/models-cache.spec.ts
@@ -2,7 +2,7 @@ import test from 'ava';
 import { unlink, writeFile, readFile, mkdir } from 'node:fs/promises';
 import { existsSync } from 'node:fs';
 import { join } from 'node:path';
-import { tmpdir } from 'node:os';
+import { homedir, tmpdir } from 'node:os';
 import type { CachedModelsData } from './models-types.js';
 import {
 	readCache,
@@ -20,8 +20,8 @@ async function getCacheFilePath(): Promise<string> {
 
 	const DEFAULT_CACHE_DIR =
 		process.platform === 'darwin'
-			? path.join(process.env.HOME || '~', 'Library', 'Caches')
-			: path.join(process.env.HOME || '~', '.cache');
+			? path.join(homedir(), 'Library', 'Caches')
+			: path.join(homedir(), '.cache');
 
 	const cacheBase = xdgCache || DEFAULT_CACHE_DIR;
 	return path.join(cacheBase, 'nanocoder', 'models.json');
@@ -212,3 +212,53 @@ test('writeCache overwrites existing cache', async t => {
 	t.truthy(readResult);
 	t.deepEqual(readResult?.data, secondData);
 });
+
+// ============================================================================
+// Windows regression: cache path must use os.homedir(), not process.env.HOME
+// Regression for https://github.com/Nano-Collective/nanocoder/pull/886
+// When process.env.HOME is undefined (Windows default), the old code produced
+// a literal "~" directory instead of resolving the user's home directory.
+// ============================================================================
+
+test('os.homedir() resolves correctly when HOME env is undefined (unlike process.env.HOME)', t => {
+	const savedHome = process.env.HOME;
+	delete process.env.HOME;
+
+	try {
+		// The old broken pattern: process.env.HOME || '~'
+		const brokenPath = join(process.env.HOME || '~', '.cache');
+		// The fixed pattern: os.homedir()
+		const fixedPath = join(homedir(), '.cache');
+
+		// On Windows, process.env.HOME is undefined, so old code yields literal "~"
+		t.true(
+			brokenPath.startsWith('~'),
+			`Old code produces literal ~ directory: ${brokenPath}`,
+		);
+		// os.homedir() always resolves to the real home directory
+		t.false(
+			fixedPath.startsWith('~'),
+			`Fixed code resolves real home: ${fixedPath}`,
+		);
+		t.not(brokenPath, fixedPath, 'Fix must produce a different path than the old code');
+	} finally {
+		if (savedHome === undefined) {
+			delete process.env.HOME;
+		} else {
+			process.env.HOME = savedHome;
+		}
+	}
+});
+
+test('actual cache path does not contain literal ~', async t => {
+	const {xdgCache} = await import('xdg-basedir');
+	const DEFAULT_CACHE_DIR =
+		process.platform === 'darwin'
+			? join(homedir(), 'Library', 'Caches')
+			: join(homedir(), '.cache');
+	const cacheBase = xdgCache || DEFAULT_CACHE_DIR;
+	const cachePath = join(cacheBase, 'nanocoder', 'models.json');
+
+	t.false(cachePath.includes('~'), `Cache path must not contain literal ~: ${cachePath}`);
+	t.true(cachePath.startsWith(homedir()), `Cache path must be under home directory: ${cachePath}`);
+});
diff --git a/source/models/models-cache.ts b/source/models/models-cache.ts
index 524268d14..822dd61ac 100644
--- a/source/models/models-cache.ts
+++ b/source/models/models-cache.ts
@@ -5,6 +5,7 @@
 
 import {constants} from 'node:fs';
 import {access, mkdir, readFile, writeFile} from 'node:fs/promises';
+import * as os from 'node:os';
 import * as path from 'node:path';
 import {xdgCache} from 'xdg-basedir';
 import {CACHE_MODELS_EXPIRATION_MS} from '@/constants';
@@ -14,8 +15,8 @@ import type {CachedModelsData, ModelsDevDatabase} from './models-types.js';
 
 const DEFAULT_CACHE_DIR =
 	process.platform === 'darwin'
-		? path.join(process.env.HOME || '~', 'Library', 'Caches')
-		: path.join(process.env.HOME || '~', '.cache');
+		? path.join(os.homedir(), 'Library', 'Caches')
+		: path.join(os.homedir(), '.cache');
 
 function getCacheDir(): string {
 	const cacheBase = xdgCache || DEFAULT_CACHE_DIR;