diff --git a/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala b/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala
index 328d9ec21..62e5ace14 100644
--- a/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala
+++ b/launcher-package/integration-test/src/test/scala/RunnerScriptTest.scala
@@ -122,6 +122,14 @@ object RunnerScriptTest extends verify.BasicTestSuite with ShellScriptUtil:
     assert(out.contains[String]("-Dsbt.boot.directory=project/.boot"))
     assert(out.contains[String]("-Dsbt.ivy.home=project/.ivy"))
 
+  testOutput(
+    "sbt with XDG_CONFIG_HOME set uses it for sbt.global.base (Closes #3681)",
+    machineSbtoptsContents = "-v",
+    windowsSupport = false,
+  )("compile", "-v"): (out: List[String]) =>
+    val hasGlobalBase = out.exists(s => s.contains("-Dsbt.global.base=") && s.contains("/sbt"))
+    assert(hasGlobalBase, s"Expected -Dsbt.global.base=.../sbt in output (XDG): ${out.mkString(System.lineSeparator())}")
+
   testOutput("accept `--ivy` in `SBT_OPTS`", sbtOpts = "--ivy /ivy/dir")("-v"):
     (out: List[String]) =>
       if (isWindows) cancel("Test not supported on windows")
diff --git a/launcher-package/src/universal/bin/sbt.bat b/launcher-package/src/universal/bin/sbt.bat
index b694ca349..6dabbfff4 100755
--- a/launcher-package/src/universal/bin/sbt.bat
+++ b/launcher-package/src/universal/bin/sbt.bat
@@ -675,6 +675,8 @@ if defined sbt_args_sbt_version (
 
 if defined sbt_args_sbt_dir (
   set _SBT_OPTS=-Dsbt.global.base=!sbt_args_sbt_dir! !_SBT_OPTS!
+) else if defined LOCALAPPDATA (
+  set _SBT_OPTS=-Dsbt.global.base=!LOCALAPPDATA!\sbt !_SBT_OPTS!
 )
 
 if defined sbt_args_sbt_boot (
diff --git a/main/src/main/scala/sbt/BuildPaths.scala b/main/src/main/scala/sbt/BuildPaths.scala
index 5eb560332..0f6c014d3 100644
--- a/main/src/main/scala/sbt/BuildPaths.scala
+++ b/main/src/main/scala/sbt/BuildPaths.scala
@@ -12,10 +12,10 @@ import java.io.File
 import java.util.Locale
 import KeyRanks.DSetting
 
-import sbt.io.{ GlobFilter, Path }
+import sbt.io.GlobFilter
 import sbt.internal.util.AttributeKey
 
-object BuildPaths {
+object BuildPaths:
   val globalBaseDirectory = AttributeKey[File](
     "global-base-directory",
     "The base directory for global sbt configuration and staging.",
@@ -106,7 +106,7 @@ object BuildPaths {
   }
 
   def defaultVersionedGlobalBase(sbtVersion: String): File = defaultGlobalBase / sbtVersion
-  def defaultGlobalBase = Path.userHome / ConfigDirectoryName
+  def defaultGlobalBase: File = internal.SysProp.defaultGlobalBaseDirectory
 
   private def binarySbtVersion(state: State): String =
     sbt.internal.librarymanagement.cross.CrossVersionUtil
@@ -145,4 +145,4 @@ object BuildPaths {
 
   def crossPath(base: File, instance: xsbti.compile.ScalaInstance): File =
     base / ("scala_" + instance.version)
-}
+end BuildPaths
diff --git a/main/src/main/scala/sbt/internal/SysProp.scala b/main/src/main/scala/sbt/internal/SysProp.scala
index 341f028cf..e48eeae12 100644
--- a/main/src/main/scala/sbt/internal/SysProp.scala
+++ b/main/src/main/scala/sbt/internal/SysProp.scala
@@ -25,7 +25,7 @@ import sbt.nio.Keys.*
 
 // See also BuildPaths.scala
 // See also LineReader.scala
-object SysProp {
+object SysProp:
   def booleanOpt(name: String): Option[Boolean] =
     sys.props.get(name) match {
       case Some(x) => parseBoolean(x)
@@ -204,6 +204,25 @@ object SysProp {
   private def file(value: String): File = new File(value)
   private def home: File = file(sys.props("user.home"))
 
+  /**
+   * Default directory for global sbt config (plugins, settings). Respects XDG Base Directory
+   * and platform conventions: SBT_CONFIG_HOME, then XDG_CONFIG_HOME/sbt (Unix), then
+   * LOCALAPPDATA/sbt (Windows), else user.home/.sbt.
+   */
+  def defaultGlobalBaseDirectory: File =
+    def fromEnv(name: String): Option[File] =
+      sys.env.get(name).filter(_.nonEmpty).map(p => file(p.trim))
+    val propBase =
+      sys.props.get(BuildPaths.GlobalBaseProperty).filter(_.nonEmpty).map(p => file(p.trim))
+    propBase
+      .orElse(fromEnv("SBT_CONFIG_HOME"))
+      .orElse(
+        if Util.isWindows then fromEnv("LOCALAPPDATA").map(_ / "sbt")
+        else fromEnv("XDG_CONFIG_HOME").map(_ / "sbt")
+      )
+      .getOrElse(home / BuildPaths.ConfigDirectoryName)
+      .getAbsoluteFile
+
   /**
    * Operating system specific cache directory, similar to Coursier cache.
    */
@@ -289,4 +308,4 @@ object SysProp {
       .get(sys.env.getOrElse("XDG_RUNTIME_DIR", sys.props("java.io.tmpdir")))
       .resolve(s".sbt$halfhash")
   }
-}
+end SysProp
diff --git a/main/src/test/scala/BuildPathsTest.scala b/main/src/test/scala/BuildPathsTest.scala
index b4f37906f..3166b71fd 100644
--- a/main/src/test/scala/BuildPathsTest.scala
+++ b/main/src/test/scala/BuildPathsTest.scala
@@ -8,43 +8,50 @@
 
 package sbt
 
-import BuildPaths.expandTildePrefix
+import java.io.File
+import BuildPaths.{ expandTildePrefix, defaultGlobalBase, GlobalBaseProperty }
 
-object BuildPathsTest extends verify.BasicTestSuite {
+object BuildPathsTest extends verify.BasicTestSuite:
 
-  test("expandTildePrefix should expand empty path to itself") {
+  test("defaultGlobalBase respects sbt.global.base system property"):
+    val custom = new File(System.getProperty("java.io.tmpdir"), "sbt-test-3681").getAbsolutePath
+    val prev = sys.props.get(GlobalBaseProperty)
+    try
+      sys.props(GlobalBaseProperty) = custom
+      assert(defaultGlobalBase.getAbsolutePath == new File(custom).getAbsolutePath)
+    finally
+      prev match
+        case Some(v) => sys.props(GlobalBaseProperty) = v
+        case None    => sys.props.remove(GlobalBaseProperty)
+
+  test("defaultGlobalBase returns absolute path"):
+    assert(defaultGlobalBase.getAbsolutePath.nonEmpty)
+    assert(defaultGlobalBase.isAbsolute)
+
+  test("expandTildePrefix should expand empty path to itself"):
     assertEquals("", expandTildePrefix(""))
-  }
 
-  test("it should expand /home/user/path to itself") {
+  test("it should expand /home/user/path to itself"):
     assertEquals("/home/user/path", expandTildePrefix("/home/user/path"))
-  }
 
-  test("it should expand /~/foo/ to itself") {
+  test("it should expand /~/foo/ to itself"):
     assertEquals("/~/foo/", expandTildePrefix("/~/foo/"))
-  }
 
-  test("it should expand ~ to $HOME") {
+  test("it should expand ~ to $HOME"):
     assertEquals(sys.env.getOrElse("HOME", ""), expandTildePrefix("~"))
-  }
 
-  test("it should expand ~/foo/bar to $HOME/foo/bar") {
+  test("it should expand ~/foo/bar to $HOME/foo/bar"):
     assertEquals(sys.env.getOrElse("HOME", "") + "/foo/bar", expandTildePrefix("~/foo/bar"))
-  }
 
-  test("it should expand ~+ to $PWD") {
+  test("it should expand ~+ to $PWD"):
     assertEquals(sys.env.getOrElse("PWD", ""), expandTildePrefix("~+"))
-  }
 
-  test("it should expand ~+/foo/bar to $PWD/foo/bar") {
+  test("it should expand ~+/foo/bar to $PWD/foo/bar"):
     assertEquals(sys.env.getOrElse("PWD", "") + "/foo/bar", expandTildePrefix("~+/foo/bar"))
-  }
 
-  test("it should expand ~- to $OLDPWD") {
+  test("it should expand ~- to $OLDPWD"):
     assertEquals(sys.env.getOrElse("OLDPWD", ""), expandTildePrefix("~-"))
-  }
 
-  test("it should expand ~-/foo/bar to $OLDPWD/foo/bar") {
+  test("it should expand ~-/foo/bar to $OLDPWD/foo/bar"):
     assertEquals(sys.env.getOrElse("OLDPWD", "") + "/foo/bar", expandTildePrefix("~-/foo/bar"))
-  }
-}
+end BuildPathsTest
diff --git a/sbt b/sbt
index 6757861b9..ce3838075 100755
--- a/sbt
+++ b/sbt
@@ -448,8 +448,8 @@ findProperty() {
   done
 }
 
-# Extracts the preloaded directory from either -Dsbt.preloaded, -Dsbt.global.base or -Duser.home
-# in that order.
+# Extracts the preloaded directory from -Dsbt.preloaded, -Dsbt.global.base, SBT_CONFIG_HOME,
+# XDG_CONFIG_HOME/sbt, or user.home/.sbt in that order.
 getPreloaded() {
   local preloaded && preloaded=$(findProperty sbt.preloaded)
   [ "$preloaded" ] && echo "$preloaded" && return
@@ -457,6 +457,9 @@ getPreloaded() {
   local global_base && global_base=$(findProperty sbt.global.base)
   [ "$global_base" ] && echo "$global_base/preloaded" && return
 
+  [ -n "${SBT_CONFIG_HOME}" ] && echo "${SBT_CONFIG_HOME}/preloaded" && return
+  [ -n "${XDG_CONFIG_HOME}" ] && echo "${XDG_CONFIG_HOME}/sbt/preloaded" && return
+
   local user_home && user_home=$(findProperty user.home)
   echo "${user_home:-$HOME}/.sbt/preloaded"
 }
@@ -642,7 +645,7 @@ Usage: `basename "$0"` [options]
   --jvm-client        run JVM client
   --timings           display task timings report on shutdown
   --allow-empty       start sbt even if current directory contains no sbt project
-  --sbt-dir   <path>  path to global settings/plugins directory (default: ~/.sbt)
+  --sbt-dir   <path>  path to global settings/plugins directory (default: \$XDG_CONFIG_HOME/sbt or ~/.sbt)
   --sbt-boot  <path>  path to shared boot directory (default: ~/.sbt/boot in 0.11 series)
   --sbt-cache <path>  path to global cache directory (default: operating system specific)
   --ivy       <path>  path to local Ivy repository (default: ~/.ivy2)
@@ -973,6 +976,13 @@ else
   vlog "[process_args] java_version = '$java_version'"
   addDefaultMemory
   addSbtScriptProperty
+  if ! printf '%s\n' "${sbt_options[@]}" | grep -q '^-Dsbt\.global\.base='; then
+    if [[ -n "${SBT_CONFIG_HOME}" ]]; then
+      addSbt "-Dsbt.global.base=$SBT_CONFIG_HOME"
+    elif [[ -n "${XDG_CONFIG_HOME}" ]]; then
+      addSbt "-Dsbt.global.base=${XDG_CONFIG_HOME}/sbt"
+    fi
+  fi
   addJdkWorkaround
   set -- "${residual_args[@]}"
   argumentCount=$#
diff --git a/sbt-app/src/sbt-test/project/xdg-global-base/build.sbt b/sbt-app/src/sbt-test/project/xdg-global-base/build.sbt
new file mode 100644
index 000000000..046ecdd87
--- /dev/null
+++ b/sbt-app/src/sbt-test/project/xdg-global-base/build.sbt
@@ -0,0 +1,10 @@
+// Scripted test for #3681: default global base (XDG / sbt.global.base) is used correctly.
+lazy val checkGlobalBase = taskKey[Unit]("Verifies global base is absolute and non-empty")
+
+lazy val root = (project in file(".")).settings(
+  checkGlobalBase := {
+    val g = BuildPaths.getGlobalBase(state.value)
+    assert(g.isAbsolute, s"expected absolute path: $g")
+    assert(g.getAbsolutePath.nonEmpty, "global base path must be non-empty")
+  }
+)
diff --git a/sbt-app/src/sbt-test/project/xdg-global-base/test b/sbt-app/src/sbt-test/project/xdg-global-base/test
new file mode 100644
index 000000000..10a5e79da
--- /dev/null
+++ b/sbt-app/src/sbt-test/project/xdg-global-base/test
@@ -0,0 +1,2 @@
+# Closes #3681: verify global base (XDG / sbt.global.base) is resolvable and absolute
+> checkGlobalBase