diff --git a/cmd/helm/init.go b/cmd/helm/init.go
index 90ffbb1b3..fab9a7a1f 100644
--- a/cmd/helm/init.go
+++ b/cmd/helm/init.go
@@ -22,6 +22,8 @@ import (
 	"io/ioutil"
 	"os"
 
+	"helm.sh/helm/pkg/repo"
+
 	"github.com/Masterminds/semver"
 	"github.com/pkg/errors"
 	"github.com/spf13/cobra"
@@ -31,7 +33,6 @@ import (
 	"helm.sh/helm/pkg/helmpath"
 	"helm.sh/helm/pkg/plugin"
 	"helm.sh/helm/pkg/plugin/installer"
-	"helm.sh/helm/pkg/repo"
 )
 
 const initDesc = `
@@ -144,10 +145,10 @@ func ensureReposFile(out io.Writer, skipRefresh bool) error {
 	repoFile := helmpath.RepositoryFile()
 	if fi, err := os.Stat(repoFile); err != nil {
 		fmt.Fprintf(out, "Creating %s \n", repoFile)
-		f := repo.NewFile()
-		if err := f.WriteFile(repoFile, 0644); err != nil {
-			return err
-		}
+		//f := repo.NewFile()
+		//if err := f.WriteFile(repoFile, 0644); err != nil {
+		//	return err
+		//}
 	} else if fi.IsDir() {
 		return errors.Errorf("%s must be a file, not a directory", repoFile)
 	}
diff --git a/cmd/helm/root_test.go b/cmd/helm/root_test.go
index 5daca1eac..df487e8b6 100644
--- a/cmd/helm/root_test.go
+++ b/cmd/helm/root_test.go
@@ -40,20 +40,20 @@ func TestRootCmd(t *testing.T) {
 		{
 			name:      "with $XDG_CACHE_HOME set",
 			args:      "home",
-			envars:    map[string]string{xdg.CacheHomeEnvVar: "/bar"},
-			cachePath: "/bar/helm",
+			envars:    map[string]string{xdg.CacheHomeEnvVar: os.TempDir() + "bar"},
+			cachePath: os.TempDir() + "bar/helm",
 		},
 		{
 			name:       "with $XDG_CONFIG_HOME set",
 			args:       "home",
-			envars:     map[string]string{xdg.ConfigHomeEnvVar: "/bar"},
-			configPath: "/bar/helm",
+			envars:     map[string]string{xdg.ConfigHomeEnvVar: os.TempDir() + "bar"},
+			configPath: os.TempDir() + "bar/helm",
 		},
 		{
 			name:     "with $XDG_DATA_HOME set",
 			args:     "home",
-			envars:   map[string]string{xdg.DataHomeEnvVar: "/bar"},
-			dataPath: "/bar/helm",
+			envars:   map[string]string{xdg.DataHomeEnvVar: os.TempDir() + "bar"},
+			dataPath: os.TempDir() + "bar/helm",
 		},
 	}
 
diff --git a/pkg/helmpath/home.go b/pkg/helmpath/home.go
index 9c9fe9379..d89608cbf 100644
--- a/pkg/helmpath/home.go
+++ b/pkg/helmpath/home.go
@@ -43,7 +43,9 @@ func Registry() string {
 
 // RepositoryFile returns the path to the repositories.yaml file.
 func RepositoryFile() string {
-	return lp.configPath("repositories.yaml")
+	configPath := lp.configPath("")
+	repoFile := filepath.Join(configPath, "repositories.yaml")
+	return repoFile
 }
 
 // RepositoryCache returns the cache path for repository metadata.
diff --git a/pkg/helmpath/home_unix_test.go b/pkg/helmpath/home_unix_test.go
index 0c933a862..1e4b4e974 100644
--- a/pkg/helmpath/home_unix_test.go
+++ b/pkg/helmpath/home_unix_test.go
@@ -24,9 +24,9 @@ import (
 )
 
 func TestHelmHome(t *testing.T) {
-	os.Setenv(xdg.CacheHomeEnvVar, "/cache")
-	os.Setenv(xdg.ConfigHomeEnvVar, "/config")
-	os.Setenv(xdg.DataHomeEnvVar, "/data")
+	os.Setenv(xdg.CacheHomeEnvVar, os.TempDir()+"cache")
+	os.Setenv(xdg.ConfigHomeEnvVar, os.TempDir()+"config")
+	os.Setenv(xdg.DataHomeEnvVar, os.TempDir()+"data")
 	isEq := func(t *testing.T, got, expected string) {
 		t.Helper()
 		if expected != got {
@@ -35,18 +35,18 @@ func TestHelmHome(t *testing.T) {
 		}
 	}
 
-	isEq(t, CachePath(), "/cache/helm")
-	isEq(t, ConfigPath(), "/config/helm")
-	isEq(t, DataPath(), "/data/helm")
-	isEq(t, RepositoryFile(), "/config/helm/repositories.yaml")
-	isEq(t, RepositoryCache(), "/cache/helm/repository")
-	isEq(t, CacheIndex("t"), "/cache/helm/repository/t-index.yaml")
-	isEq(t, CacheIndex(""), "/cache/helm/repository/index.yaml")
-	isEq(t, Starters(), "/data/helm/starters")
-	isEq(t, Archive(), "/cache/helm/archive")
+	isEq(t, CachePath(), os.TempDir()+"cache/helm")
+	isEq(t, ConfigPath(), os.TempDir()+"config/helm")
+	isEq(t, DataPath(), os.TempDir()+"data/helm")
+	isEq(t, RepositoryFile(), os.TempDir()+"config/helm/repositories.yaml")
+	isEq(t, RepositoryCache(), os.TempDir()+"cache/helm/repository")
+	isEq(t, CacheIndex("t"), os.TempDir()+"cache/helm/repository/t-index.yaml")
+	isEq(t, CacheIndex(""), os.TempDir()+"cache/helm/repository/index.yaml")
+	isEq(t, Starters(), os.TempDir()+"data/helm/starters")
+	isEq(t, Archive(), os.TempDir()+"cache/helm/archive")
 
 	// test to see if lazy-loading environment variables at runtime works
-	os.Setenv(xdg.CacheHomeEnvVar, "/cache2")
+	os.Setenv(xdg.CacheHomeEnvVar, os.TempDir()+"cache2")
 
-	isEq(t, CachePath(), "/cache2/helm")
+	isEq(t, CachePath(), os.TempDir()+"cache2/helm")
 }
diff --git a/pkg/helmpath/lazypath.go b/pkg/helmpath/lazypath.go
index 39d349552..1313ee7fd 100644
--- a/pkg/helmpath/lazypath.go
+++ b/pkg/helmpath/lazypath.go
@@ -13,6 +13,7 @@
 package helmpath
 
 import (
+	"fmt"
 	"os"
 	"path/filepath"
 
@@ -27,7 +28,10 @@ func (l lazypath) path(envVar string, defaultFn func() string, file string) stri
 	if base == "" {
 		base = defaultFn()
 	}
-	return filepath.Join(base, string(l), file)
+	path := filepath.Join(base, string(l), file)
+	// Create directory if not exist.
+	l.ensurePathExist(path)
+	return path
 }
 
 // cachePath defines the base directory relative to which user specific non-essential data files
@@ -46,3 +50,18 @@ func (l lazypath) configPath(file string) string {
 func (l lazypath) dataPath(file string) string {
 	return l.path(xdg.DataHomeEnvVar, dataHome, file)
 }
+
+func (l lazypath) ensurePathExist(path string) {
+	if fi, err := os.Stat(path); err != nil {
+		if err := os.MkdirAll(path, 0755); err != nil {
+			// FIXME - Need to discuss best way to log error message in this package,
+			//  otherwise would need to refactor path() method. That would be huge refactor :(
+			fmt.Printf("creation of directory %s failed with error %s \n", path, err.Error())
+			// FIXME - os.Exit() seems like anti-pattern to exit, any suggestion here ?
+			os.Exit(1)
+		}
+	} else if !fi.IsDir() {
+		fmt.Printf("%s must be a directory. \n", path)
+		os.Exit(1)
+	}
+}
diff --git a/pkg/repo/repo.go b/pkg/repo/repo.go
index 54152a54e..6ef4219e2 100644
--- a/pkg/repo/repo.go
+++ b/pkg/repo/repo.go
@@ -55,9 +55,17 @@ func LoadFile(path string) (*File, error) {
 	b, err := ioutil.ReadFile(path)
 	if err != nil {
 		if os.IsNotExist(err) {
-			return nil, errors.Errorf("couldn't load repositories file (%s).\nYou might need to run `helm init`", path)
+			f := NewFile()
+			if err := f.WriteFile(path, 0644); err != nil {
+				return nil, err
+			}
+			b, err = ioutil.ReadFile(path)
+			if err != nil {
+				return nil, err
+			}
+		} else {
+			return nil, err
 		}
-		return nil, err
 	}
 
 	r := &File{}
diff --git a/pkg/repo/repo_test.go b/pkg/repo/repo_test.go
index 2d6e46bbd..1bdc5044f 100644
--- a/pkg/repo/repo_test.go
+++ b/pkg/repo/repo_test.go
@@ -19,7 +19,6 @@ package repo
 import "testing"
 import "io/ioutil"
 import "os"
-import "strings"
 
 const testRepositoriesFile = "testdata/repositories.yaml"
 
@@ -199,11 +198,11 @@ func TestWriteFile(t *testing.T) {
 	}
 }
 
-func TestRepoNotExists(t *testing.T) {
-	_, err := LoadFile("/this/path/does/not/exist.yaml")
-	if err == nil {
-		t.Errorf("expected err to be non-nil when path does not exist")
-	} else if !strings.Contains(err.Error(), "You might need to run `helm init`") {
-		t.Errorf("expected prompt to run `helm init` when repositories file does not exist")
-	}
-}
+//func TestRepoNotExists(t *testing.T) {
+//	_, err := LoadFile("/this/path/does/not/exist.yaml")
+//	if err == nil {
+//		t.Errorf("expected err to be non-nil when path does not exist")
+//	} else if !strings.Contains(err.Error(), "You might need to run `helm init`") {
+//		t.Errorf("expected prompt to run `helm init` when repositories file does not exist")
+//	}
+//}