diff --git a/.changeset/yellow-otters-develop.md b/.changeset/yellow-otters-develop.md
new file mode 100644
index 000000000..278264061
--- /dev/null
+++ b/.changeset/yellow-otters-develop.md
@@ -0,0 +1,5 @@
+---
+"fnm": patch
+---
+
+Make installation script respect `$XDG_DATA_HOME`
diff --git a/.ci/install.sh b/.ci/install.sh
index ebe39b3f5..1494da5f6 100755
--- a/.ci/install.sh
+++ b/.ci/install.sh
@@ -2,10 +2,19 @@
 
 set -e
 
-INSTALL_DIR="$HOME/.fnm"
 RELEASE="latest"
 OS="$(uname -s)"
 
+if [ -d "$HOME/.fnm" ]; then
+  INSTALL_DIR="$HOME/.fnm"
+elif [ -n "$XDG_DATA_HOME" ]; then
+  INSTALL_DIR="$XDG_DATA_HOME/fnm"
+elif [ "$OS" = "Darwin" ]; then
+  INSTALL_DIR="$HOME/Library/Application Support/fnm"
+else
+  INSTALL_DIR="$HOME/.local/share/fnm"
+fi
+
 # Parse Flags
 parse_args() {
   while [[ $# -gt 0 ]]; do
@@ -154,12 +163,12 @@ setup_shell() {
     echo "Installing for Zsh. Appending the following to $CONF_FILE:"
     echo ""
     echo '  # fnm'
-    echo '  export PATH='"$INSTALL_DIR"':$PATH'
+    echo '  export PATH="'"$INSTALL_DIR"':$PATH"'
     echo '  eval "`fnm env`"'
 
     echo '' >>$CONF_FILE
     echo '# fnm' >>$CONF_FILE
-    echo 'export PATH='$INSTALL_DIR':$PATH' >>$CONF_FILE
+    echo 'export PATH="'$INSTALL_DIR':$PATH"' >>$CONF_FILE
     echo 'eval "`fnm env`"' >>$CONF_FILE
 
   elif [ "$CURRENT_SHELL" = "fish" ]; then
@@ -168,11 +177,11 @@ setup_shell() {
     echo "Installing for Fish. Appending the following to $CONF_FILE:"
     echo ""
     echo '  # fnm'
-    echo '  set PATH '"$INSTALL_DIR"' $PATH'
+    echo '  set PATH "'"$INSTALL_DIR"'" $PATH'
     echo '  fnm env | source'
 
     echo '# fnm' >>$CONF_FILE
-    echo 'set PATH '"$INSTALL_DIR"' $PATH' >>$CONF_FILE
+    echo 'set PATH "'"$INSTALL_DIR"'" $PATH' >>$CONF_FILE
     echo 'fnm env | source' >>$CONF_FILE
 
   elif [ "$CURRENT_SHELL" = "bash" ]; then
@@ -185,12 +194,12 @@ setup_shell() {
     echo "Installing for Bash. Appending the following to $CONF_FILE:"
     echo ""
     echo '  # fnm'
-    echo '  export PATH='"$INSTALL_DIR"':$PATH'
+    echo '  export PATH="'"$INSTALL_DIR"':$PATH"'
     echo '  eval "`fnm env`"'
 
     echo '' >>$CONF_FILE
     echo '# fnm' >>$CONF_FILE
-    echo 'export PATH='"$INSTALL_DIR"':$PATH' >>$CONF_FILE
+    echo 'export PATH="'"$INSTALL_DIR"':$PATH"' >>$CONF_FILE
     echo 'eval "`fnm env`"' >>$CONF_FILE
 
   else
diff --git a/.github/workflows/installation_script.yml b/.github/workflows/installation_script.yml
index b36a91af9..56440fb59 100644
--- a/.github/workflows/installation_script.yml
+++ b/.github/workflows/installation_script.yml
@@ -36,16 +36,16 @@ jobs:
             bash ./.ci/install.sh
 
             echo "fnm --version"
-            ~/.fnm/fnm --version
+            ~/.local/share/fnm/fnm --version
 
             echo "eval fnm env"
-            eval "$(~/.fnm/fnm env)"
+            eval "$(~/.local/share/fnm/fnm env)"
 
             echo "fnm install"
-            ~/.fnm/fnm install 12
+            ~/.local/share/fnm/fnm install 12
 
             echo "node -v"
-            ~/.fnm/fnm exec --using=12 -- node -v
+            ~/.local/share/fnm/fnm exec --using=12 -- node -v
           '
 
   test_against_latest_release: