diff --git a/src/ex_docmd.c b/src/ex_docmd.c
index 0b33e79..3b874e7 100644
--- a/src/ex_docmd.c
+++ b/src/ex_docmd.c
@@ -4403,7 +4403,7 @@
 			    || vim_strchr(eap->arg, '~') != NULL)
 		    {
 			expand_env_esc(eap->arg, NameBuff, MAXPATHL,
-								 TRUE, NULL);
+							    TRUE, TRUE, NULL);
 			has_wildcards = mch_has_wildcard(NameBuff);
 			p = NameBuff;
 		    }
diff --git a/src/misc1.c b/src/misc1.c
index 5f40e0a..b67405f 100644
--- a/src/misc1.c
+++ b/src/misc1.c
@@ -3506,9 +3506,38 @@
 #endif
 
 /*
+ * Call expand_env() and store the result in an allocated string.
+ * This is not very memory efficient, this expects the result to be freed
+ * again soon.
+ */
+    char_u *
+expand_env_save(src)
+    char_u	*src;
+{
+    return expand_env_save_opt(src, FALSE);
+}
+
+/*
+ * Idem, but when "one" is TRUE handle the string as one file name, only
+ * expand "~" at the start.
+ */
+    char_u *
+expand_env_save_opt(src, one)
+    char_u	*src;
+    int		one;
+{
+    char_u	*p;
+
+    p = alloc(MAXPATHL);
+    if (p != NULL)
+	expand_env_esc(src, p, MAXPATHL, FALSE, one, NULL);
+    return p;
+}
+
+/*
  * Expand environment variable with path name.
  * "~/" is also expanded, using $HOME.	For Unix "~user/" is expanded.
- * Skips over "\ ", "\~" and "\$".
+ * Skips over "\ ", "\~" and "\$" (not for Win32 though).
  * If anything fails no expansion is done and dst equals src.
  */
     void
@@ -3517,15 +3546,16 @@
     char_u	*dst;		/* where to put the result */
     int		dstlen;		/* maximum length of the result */
 {
-    expand_env_esc(src, dst, dstlen, FALSE, NULL);
+    expand_env_esc(src, dst, dstlen, FALSE, FALSE, NULL);
 }
 
     void
-expand_env_esc(srcp, dst, dstlen, esc, startstr)
+expand_env_esc(srcp, dst, dstlen, esc, one, startstr)
     char_u	*srcp;		/* input string e.g. "$HOME/vim.hlp" */
     char_u	*dst;		/* where to put the result */
     int		dstlen;		/* maximum length of the result */
     int		esc;		/* escape spaces in expanded variables */
+    int		one;		/* "srcp" is one file name */
     char_u	*startstr;	/* start again after this (can be NULL) */
 {
     char_u	*src;
@@ -3766,6 +3796,8 @@
 	{
 	    /*
 	     * Recognize the start of a new name, for '~'.
+	     * Don't do this when "one" is TRUE, to avoid expanding "~" in
+	     * ":edit foo ~ foo".
 	     */
 	    at_start = FALSE;
 	    if (src[0] == '\\' && src[1] != NUL)
@@ -3773,7 +3805,7 @@
 		*dst++ = *src++;
 		--dstlen;
 	    }
-	    else if (src[0] == ' ' || src[0] == ',')
+	    else if ((src[0] == ' ' || src[0] == ',') && !one)
 		at_start = TRUE;
 	    *dst++ = *src++;
 	    --dstlen;
@@ -4070,23 +4102,6 @@
 }
 
 /*
- * Call expand_env() and store the result in an allocated string.
- * This is not very memory efficient, this expects the result to be freed
- * again soon.
- */
-    char_u *
-expand_env_save(src)
-    char_u	*src;
-{
-    char_u	*p;
-
-    p = alloc(MAXPATHL);
-    if (p != NULL)
-	expand_env(src, p, MAXPATHL);
-    return p;
-}
-
-/*
  * Our portable version of setenv.
  */
     void
@@ -9139,7 +9154,7 @@
 	     */
 	    if (vim_strpbrk(p, (char_u *)"$~") != NULL)
 	    {
-		p = expand_env_save(p);
+		p = expand_env_save_opt(p, TRUE);
 		if (p == NULL)
 		    p = pat[i];
 #ifdef UNIX
diff --git a/src/option.c b/src/option.c
index 0bdc0a4..a8aded5 100644
--- a/src/option.c
+++ b/src/option.c
@@ -4996,7 +4996,7 @@
      * For 'spellsuggest' expand after "file:".
      */
     expand_env_esc(val, NameBuff, MAXPATHL,
-	    (char_u **)options[opt_idx].var == &p_tags,
+	    (char_u **)options[opt_idx].var == &p_tags, FALSE,
 #ifdef FEAT_SPELL
 	    (char_u **)options[opt_idx].var == &p_sps ? (char_u *)"file:" :
 #endif
diff --git a/src/proto/misc1.pro b/src/proto/misc1.pro
index e9bc32c..a54b8b5 100644
--- a/src/proto/misc1.pro
+++ b/src/proto/misc1.pro
@@ -48,10 +48,11 @@
 void vim_beep __ARGS((void));
 void init_homedir __ARGS((void));
 void free_homedir __ARGS((void));
-void expand_env __ARGS((char_u *src, char_u *dst, int dstlen));
-void expand_env_esc __ARGS((char_u *srcp, char_u *dst, int dstlen, int esc, char_u *startstr));
-char_u *vim_getenv __ARGS((char_u *name, int *mustfree));
 char_u *expand_env_save __ARGS((char_u *src));
+char_u *expand_env_save_opt __ARGS((char_u *src, int one));
+void expand_env __ARGS((char_u *src, char_u *dst, int dstlen));
+void expand_env_esc __ARGS((char_u *srcp, char_u *dst, int dstlen, int esc, int one, char_u *startstr));
+char_u *vim_getenv __ARGS((char_u *name, int *mustfree));
 void vim_setenv __ARGS((char_u *name, char_u *val));
 char_u *get_env_name __ARGS((expand_T *xp, int idx));
 void home_replace __ARGS((buf_T *buf, char_u *src, char_u *dst, int dstlen, int one));
diff --git a/src/version.c b/src/version.c
index 21f538c..8dcac6b 100644
--- a/src/version.c
+++ b/src/version.c
@@ -667,6 +667,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    123,
+/**/
     122,
 /**/
     121,