diff --git a/mypy/main.py b/mypy/main.py
index b7668b98d45f..faf7e79a4f95 100644
--- a/mypy/main.py
+++ b/mypy/main.py
@@ -1004,6 +1004,8 @@ def parse_section(prefix: str, template: Options,
         except ValueError as err:
             print("%s: %s: %s" % (prefix, key, err), file=sys.stderr)
             continue
+        if key == 'cache_dir':
+            v = os.path.expanduser(v)
         if key == 'silent_imports':
             print("%s: silent_imports has been replaced by "
                   "ignore_missing_imports=True; follow_imports=skip" % prefix, file=sys.stderr)