diff --git a/scripts/install.ps1 b/scripts/install.ps1
index 9f6ee3db4..2de7b901b 100644
--- a/scripts/install.ps1
+++ b/scripts/install.ps1
@@ -16,8 +16,8 @@ param(
     [switch]$NoVenv,
     [switch]$SkipSetup,
     [string]$Branch = "main",
-    [string]$HermesHome = "$env:USERPROFILE\.hermes",
-    [string]$InstallDir = "$env:USERPROFILE\.hermes\hermes-agent"
+    [string]$HermesHome = "$env:LOCALAPPDATA\hermes",
+    [string]$InstallDir = "$env:LOCALAPPDATA\hermes\hermes-agent"
 )
 
 $ErrorActionPreference = "Stop"
@@ -593,6 +593,16 @@ function Set-PathVariable {
         Write-Info "PATH already configured"
     }
     
+    # Set HERMES_HOME so the Python code finds config/data in the right place.
+    # Only needed on Windows where we install to %LOCALAPPDATA%\hermes instead
+    # of the Unix default ~/.hermes
+    $currentHermesHome = [Environment]::GetEnvironmentVariable("HERMES_HOME", "User")
+    if (-not $currentHermesHome -or $currentHermesHome -ne $HermesHome) {
+        [Environment]::SetEnvironmentVariable("HERMES_HOME", $HermesHome, "User")
+        Write-Success "Set HERMES_HOME=$HermesHome"
+    }
+    $env:HERMES_HOME = $HermesHome
+    
     # Update current session
     $env:Path = "$hermesBin;$env:Path"
     
@@ -811,7 +821,7 @@ function Write-Completion {
     Write-Host ""
     
     # Show file locations
-    Write-Host "📁 Your files (all in ~/.hermes/):" -ForegroundColor Cyan
+    Write-Host "📁 Your files:" -ForegroundColor Cyan
     Write-Host ""
     Write-Host "   Config:    " -NoNewline -ForegroundColor Yellow
     Write-Host "$HermesHome\config.yaml"
@@ -867,6 +877,22 @@ function Write-Completion {
 function Main {
     Write-Banner
     
+    # Migrate from old install location (~\.hermes) if it exists and new location doesn't
+    $oldHome = "$env:USERPROFILE\.hermes"
+    if (($HermesHome -ne $oldHome) -and (Test-Path $oldHome) -and -not (Test-Path $HermesHome)) {
+        Write-Info "Found existing installation at $oldHome"
+        Write-Info "Moving to new location: $HermesHome"
+        try {
+            # Create parent directory
+            New-Item -ItemType Directory -Force -Path (Split-Path $HermesHome) -ErrorAction SilentlyContinue | Out-Null
+            Move-Item -Path $oldHome -Destination $HermesHome -Force
+            Write-Success "Migrated $oldHome → $HermesHome"
+        } catch {
+            Write-Warn "Could not auto-migrate: $_"
+            Write-Info "You can move it manually later: Move-Item $oldHome $HermesHome"
+        }
+    }
+    
     if (-not (Install-Uv)) { throw "uv installation failed — cannot continue" }
     if (-not (Test-Python)) { throw "Python $PythonVersion not available — cannot continue" }
     if (-not (Test-Git)) { throw "Git not found — install from https://git-scm.com/download/win" }