diff --git a/Doc/lib/libposixpath.tex b/Doc/lib/libposixpath.tex
index 1dbe32f..3687c6d 100644
--- a/Doc/lib/libposixpath.tex
+++ b/Doc/lib/libposixpath.tex
@@ -58,18 +58,20 @@
 \end{funcdesc}
 
 \begin{funcdesc}{expanduser}{path}
-On \UNIX, return the argument with an initial component of \samp{\~} or
-\samp{\~\var{user}} replaced by that \var{user}'s home directory.
-An initial \samp{\~} is replaced by the environment variable
+On \UNIX and Windows, return the argument with an initial component of
+\samp{\~} or \samp{\~\var{user}} replaced by that \var{user}'s home directory.
+
+On \UNIX, an initial \samp{\~} is replaced by the environment variable
 \envvar{HOME} if it is set; otherwise the current user's home directory
 is looked up in the password directory through the built-in module
 \refmodule{pwd}\refbimodindex{pwd}.
 An initial \samp{\~\var{user}} is looked up directly in the
 password directory.
 
-On Windows, only \samp{\~} is supported; it is replaced by the
-environment variable \envvar{HOME} or by a combination of
-\envvar{HOMEDRIVE} and \envvar{HOMEPATH}.
+On Windows, \envvar{HOME} and \envvar{USERPROFILE} will be used if set,
+otherwise a combination of \envvar{HOMEPATH} and \envvar{HOMEDRIVE} will be
+used.  An initial \samp{\~\var{user}} is handled by stripping the last
+directory component from the created user path derived above.
 
 If the expansion fails or if the
 path does not begin with a tilde, the path is returned unchanged.
@@ -81,6 +83,9 @@
 replaced by the value of environment variable \var{name}.  Malformed
 variable names and references to non-existing variables are left
 unchanged.
+
+On Windows, \samp{\%\var{name}\%} expansions are supported in addition to
+\samp{\$\var{name}} and \samp{\$\{\var{name}\}}.
 \end{funcdesc}
 
 \begin{funcdesc}{getatime}{path}
diff --git a/Lib/ntpath.py b/Lib/ntpath.py
index 2ea3358..60c1fd0 100644
--- a/Lib/ntpath.py
+++ b/Lib/ntpath.py
@@ -278,36 +278,44 @@
     i, n = 1, len(path)
     while i < n and path[i] not in '/\\':
         i = i + 1
-    if i == 1:
-        if 'HOME' in os.environ:
-            userhome = os.environ['HOME']
-        elif not 'HOMEPATH' in os.environ:
-            return path
-        else:
-            try:
-                drive = os.environ['HOMEDRIVE']
-            except KeyError:
-                drive = ''
-            userhome = join(drive, os.environ['HOMEPATH'])
-    else:
+
+    if 'HOME' in os.environ:
+        userhome = os.environ['HOME']
+    elif 'USERPROFILE' in os.environ:
+        userhome = os.environ['USERPROFILE']
+    elif not 'HOMEPATH' in os.environ:
         return path
+    else:
+        try:
+            drive = os.environ['HOMEDRIVE']
+        except KeyError:
+            drive = ''
+        userhome = join(drive, os.environ['HOMEPATH'])
+
+    if i != 1: #~user
+        userhome = join(dirname(userhome), path[1:i])
+
     return userhome + path[i:]
 
 
 # Expand paths containing shell variable substitutions.
 # The following rules apply:
 #       - no expansion within single quotes
-#       - no escape character, except for '$$' which is translated into '$'
+#       - '$$' is translated into '$'
+#       - '%%' is translated into '%' if '%%' are not seen in %var1%%var2%
 #       - ${varname} is accepted.
-#       - varnames can be made out of letters, digits and the character '_'
+#       - $varname is accepted.
+#       - %varname% is accepted.
+#       - varnames can be made out of letters, digits and the characters '_-'
+#         (though is not verifed in the ${varname} and %varname% cases)
 # XXX With COMMAND.COM you can use any characters in a variable name,
 # XXX except '^|<>='.
 
 def expandvars(path):
-    """Expand shell variables of form $var and ${var}.
+    """Expand shell variables of the forms $var, ${var} and %var%.
 
     Unknown variables are left unchanged."""
-    if '$' not in path:
+    if '$' not in path and '%' not in path:
         return path
     import string
     varchars = string.ascii_letters + string.digits + '_-'
@@ -325,6 +333,24 @@
             except ValueError:
                 res = res + path
                 index = pathlen - 1
+        elif c == '%':  # variable or '%'
+            if path[index + 1:index + 2] == '%':
+                res = res + c
+                index = index + 1
+            else:
+                path = path[index+1:]
+                pathlen = len(path)
+                try:
+                    index = path.index('%')
+                except ValueError:
+                    res = res + '%' + path
+                    index = pathlen - 1
+                else:
+                    var = path[:index]
+                    if var in os.environ:
+                        res = res + os.environ[var]
+                    else:
+                        res = res + '%' + var + '%'
         elif c == '$':  # variable or '$$'
             if path[index + 1:index + 2] == '$':
                 res = res + c
diff --git a/Lib/test/test_ntpath.py b/Lib/test/test_ntpath.py
index da80bc6..703e5c8 100644
--- a/Lib/test/test_ntpath.py
+++ b/Lib/test/test_ntpath.py
@@ -134,6 +134,13 @@
     tester('ntpath.expandvars("${{foo}}")', "baz1}")
     tester('ntpath.expandvars("$foo$foo")', "barbar")
     tester('ntpath.expandvars("$bar$bar")', "$bar$bar")
+    tester('ntpath.expandvars("%foo% bar")', "bar bar")
+    tester('ntpath.expandvars("%foo%bar")', "barbar")
+    tester('ntpath.expandvars("%foo%%foo%")', "barbar")
+    tester('ntpath.expandvars("%%foo%%foo%foo%")', "%foo%foobar")
+    tester('ntpath.expandvars("%?bar%")', "%?bar%")
+    tester('ntpath.expandvars("%foo%%bar")', "bar%bar")
+    tester('ntpath.expandvars("\'%foo%\'%bar")', "\'%foo%\'%bar")
 finally:
     os.environ.clear()
     os.environ.update(oldenv)
diff --git a/Misc/NEWS b/Misc/NEWS
index 595d1ea..d9bf14f 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -170,6 +170,10 @@
 Library
 -------
 
+- Patch #957650: "%var%" environment variable references are now properly
+  expanded in ntpath.expandvars(), also "~user" home directory references
+  are recognized and handled on Windows.
+
 - Patch #1429539: pdb now correctly initializes the __main__ module for
   the debugged script, which means that imports from __main__ work
   correctly now.