diff --git a/powerlevel9k.zsh-theme b/powerlevel9k.zsh-theme
index b37f12c7..b08155ed 100755
--- a/powerlevel9k.zsh-theme
+++ b/powerlevel9k.zsh-theme
@@ -794,7 +794,7 @@ prompt_dir() {
   fi
 
   if [[ "${POWERLEVEL9K_HOME_FOLDER_ABBREVIATION}" != "~" ]]; then
-    current_path="$( echo "${current_path}" | sed "s/^~/${POWERLEVEL9K_HOME_FOLDER_ABBREVIATION}/")"
+    current_path=${current_path/#\~/${POWERLEVEL9K_HOME_FOLDER_ABBREVIATION}}
   fi
 
   typeset -AH dir_states
diff --git a/test/segments/dir.spec b/test/segments/dir.spec
index b2991175..f4842f38 100755
--- a/test/segments/dir.spec
+++ b/test/segments/dir.spec
@@ -272,6 +272,31 @@ function testChangingDirPathSeparator() {
   unset POWERLEVEL9K_DIR_PATH_SEPARATOR
 }
 
+function testHomeFolderAbbreviation() {
+  local POWERLEVEL9K_HOME_FOLDER_ABBREVIATION
+  local dir=$PWD
+
+  cd ~/
+  # default
+  POWERLEVEL9K_HOME_FOLDER_ABBREVIATION='~'
+  assertEquals "%K{blue} %F{black}~ %k%F{blue}%f " "$(build_left_prompt)"
+
+  # substituted
+  POWERLEVEL9K_HOME_FOLDER_ABBREVIATION='qQq'
+  assertEquals "%K{blue} %F{black}qQq %k%F{blue}%f " "$(build_left_prompt)"
+
+  cd /tmp
+  # default
+  POWERLEVEL9K_HOME_FOLDER_ABBREVIATION='~'
+  assertEquals "%K{blue} %F{black}/tmp %k%F{blue}%f " "$(build_left_prompt)"
+
+  # substituted
+  POWERLEVEL9K_HOME_FOLDER_ABBREVIATION='qQq'
+  assertEquals "%K{blue} %F{black}/tmp %k%F{blue}%f " "$(build_left_prompt)"
+
+  cd "$dir"
+}
+
 function testOmittingFirstCharacterWorks() {
   POWERLEVEL9K_DIR_OMIT_FIRST_CHARACTER=true
   POWERLEVEL9K_FOLDER_ICON='folder-icon'