diff --git a/internal/config/expand.go b/internal/config/expand.go
index a268da3..c1d3702 100644
--- a/internal/config/expand.go
+++ b/internal/config/expand.go
@@ -2,12 +2,15 @@ package config
 
 import (
 	"os"
+	"path/filepath"
+	"strings"
 )
 
 // ExpandEnv expands environment variables in config values.
 // It processes:
 //   - env map values: expands $VAR and ${VAR} using provided environment
 //   - volumes paths: expands variables in volume mount strings
+//   - file paths: expands ~/ prefix to user's home directory in WorkingDir, Dockerfile, and Volumes
 //
 // Uses os.ExpandEnv behavior: undefined variables expand to empty string.
 // Returns a new Config with expanded values.
@@ -33,9 +36,30 @@ func ExpandEnv(cfg Config, environment []string) Config {
 	if cfg.Volumes != nil {
 		result.Volumes = make([]string, len(cfg.Volumes))
 		for i, volume := range cfg.Volumes {
-			result.Volumes[i] = os.Expand(volume, mapper)
+			expanded := os.Expand(volume, mapper)
+			result.Volumes[i] = expandHome(expanded)
 		}
 	}
 
+	// Expand home directory in file path fields
+	result.WorkingDir = expandHome(cfg.WorkingDir)
+	result.Dockerfile = expandHome(cfg.Dockerfile)
+
 	return result
 }
+
+// expandHome expands the tilde (~) prefix in a path to the user's home directory.
+// Only paths that start with ~/ are expanded. Other instances of ~ are left as literals.
+// If the path starts with ~/ but the home directory cannot be determined, the path is returned unchanged.
+func expandHome(path string) string {
+	if !strings.HasPrefix(path, "~/") {
+		return path
+	}
+	
+	home, err := os.UserHomeDir()
+	if err != nil || home == "" {
+		return path
+	}
+	
+	return filepath.Join(home, path[2:])
+}
diff --git a/internal/config/expand_test.go b/internal/config/expand_test.go
index 3f0686b..4884721 100644
--- a/internal/config/expand_test.go
+++ b/internal/config/expand_test.go
@@ -1,6 +1,8 @@
 package config
 
 import (
+	"os"
+	"path/filepath"
 	"testing"
 	"time"
 
@@ -183,3 +185,134 @@ func TestExpandEnv(t *testing.T) {
 		require.Equal(t, "/home/user/data:/data", result.Volumes[0])
 	})
 }
+
+func TestExpandHome(t *testing.T) {
+	t.Run("ExpandsHomeDirectory", func(t *testing.T) {
+		result := expandHome("~/config")
+		
+		// Should expand to actual home directory
+		home, err := os.UserHomeDir()
+		require.NoError(t, err)
+		require.Equal(t, filepath.Join(home, "config"), result)
+	})
+
+	t.Run("ExpandsHomeDirWithSubpath", func(t *testing.T) {
+		result := expandHome("~/projects/myapp")
+		
+		home, err := os.UserHomeDir()
+		require.NoError(t, err)
+		require.Equal(t, filepath.Join(home, "projects/myapp"), result)
+	})
+
+	t.Run("DoesNotExpandTildeNotAtStart", func(t *testing.T) {
+		result := expandHome("/path/to/~/file")
+		
+		require.Equal(t, "/path/to/~/file", result)
+	})
+
+	t.Run("DoesNotExpandTildeWithoutSlash", func(t *testing.T) {
+		result := expandHome("~file")
+		
+		require.Equal(t, "~file", result)
+	})
+
+	t.Run("HandlesRootPath", func(t *testing.T) {
+		result := expandHome("/absolute/path")
+		
+		require.Equal(t, "/absolute/path", result)
+	})
+
+	t.Run("HandlesEmptyPath", func(t *testing.T) {
+		result := expandHome("")
+		
+		require.Equal(t, "", result)
+	})
+}
+
+func TestExpandEnvWithHomeDirectory(t *testing.T) {
+	// Get actual home directory for test assertions
+	home, err := os.UserHomeDir()
+	require.NoError(t, err)
+
+	t.Run("ExpandsWorkingDir", func(t *testing.T) {
+		cfg := Config{
+			WorkingDir: "~/workspace",
+		}
+		environment := []string{}
+
+		result := ExpandEnv(cfg, environment)
+
+		require.Equal(t, filepath.Join(home, "workspace"), result.WorkingDir)
+	})
+
+	t.Run("ExpandsDockerfile", func(t *testing.T) {
+		cfg := Config{
+			Dockerfile: "~/dockerfiles/Dockerfile.dev",
+		}
+		environment := []string{}
+
+		result := ExpandEnv(cfg, environment)
+
+		require.Equal(t, filepath.Join(home, "dockerfiles/Dockerfile.dev"), result.Dockerfile)
+	})
+
+	t.Run("ExpandsHomeInVolumes", func(t *testing.T) {
+		cfg := Config{
+			Volumes: []string{
+				"~/data:/data",
+				"~/cache:/cache",
+			},
+		}
+		environment := []string{}
+
+		result := ExpandEnv(cfg, environment)
+
+		require.Equal(t, filepath.Join(home, "data")+":/data", result.Volumes[0])
+		require.Equal(t, filepath.Join(home, "cache")+":/cache", result.Volumes[1])
+	})
+
+	t.Run("ExpandsHomeAfterEnvVar", func(t *testing.T) {
+		cfg := Config{
+			Volumes: []string{
+				"$HOME/data:/data",
+			},
+		}
+		environment := []string{"HOME=" + home}
+
+		result := ExpandEnv(cfg, environment)
+
+		require.Equal(t, filepath.Join(home, "data")+":/data", result.Volumes[0])
+	})
+
+	t.Run("DoesNotExpandNonHomePrefix", func(t *testing.T) {
+		cfg := Config{
+			WorkingDir: "/workspace",
+			Dockerfile: "./Dockerfile",
+		}
+		environment := []string{}
+
+		result := ExpandEnv(cfg, environment)
+
+		require.Equal(t, "/workspace", result.WorkingDir)
+		require.Equal(t, "./Dockerfile", result.Dockerfile)
+	})
+
+	t.Run("ExpandsMultiplePathsWithHome", func(t *testing.T) {
+		cfg := Config{
+			WorkingDir: "~/app",
+			Dockerfile: "~/docker/Dockerfile",
+			Volumes: []string{
+				"~/data:/data",
+				"/absolute:/absolute",
+			},
+		}
+		environment := []string{}
+
+		result := ExpandEnv(cfg, environment)
+
+		require.Equal(t, filepath.Join(home, "app"), result.WorkingDir)
+		require.Equal(t, filepath.Join(home, "docker/Dockerfile"), result.Dockerfile)
+		require.Equal(t, filepath.Join(home, "data")+":/data", result.Volumes[0])
+		require.Equal(t, "/absolute:/absolute", result.Volumes[1])
+	})
+}