diff --git a/userspace/libraries/LibC/unistd.cpp b/userspace/libraries/LibC/unistd.cpp
index 9f9a2aa3..f51ac762 100644
--- a/userspace/libraries/LibC/unistd.cpp
+++ b/userspace/libraries/LibC/unistd.cpp
@@ -426,10 +426,9 @@ char* getcwd(char* buf, size_t size)
 		return nullptr;
 	}
 
-	if ((char*)syscall(SYS_GET_PWD, buf, size) == nullptr)
+	if (syscall(SYS_GET_PWD, buf, size) == 0)
 		return nullptr;
 
-	setenv("PWD", buf, 1);
 	return buf;
 }
 
diff --git a/userspace/programs/Shell/Builtin.cpp b/userspace/programs/Shell/Builtin.cpp
index b356e1bc..55256f9b 100644
--- a/userspace/programs/Shell/Builtin.cpp
+++ b/userspace/programs/Shell/Builtin.cpp
@@ -134,21 +134,20 @@ void Builtin::initialize()
 				return 1;
 			}
 
-			BAN::StringView path;
-
-			if (arguments.size() == 1)
-			{
-				if (const char* path_env = getenv("HOME"))
-					path = path_env;
-				else
-					return 0;
-			}
+			const char* path = nullptr;
+			if (arguments.size() == 2)
+				path = arguments[1].data();
 			else
-				path = arguments[1];
+				path = getenv("HOME");
 
-			if (chdir(path.data()) == -1)
+			if (path == nullptr)
+				return 0;
+
+			if (chdir(path) == -1)
 				ERROR_RETURN("chdir", 1);
 
+			setenv("PWD", path, 1);
+
 			return 0;
 		}, true
 	));
diff --git a/userspace/programs/Shell/main.cpp b/userspace/programs/Shell/main.cpp
index a863aee1..dbff2d31 100644
--- a/userspace/programs/Shell/main.cpp
+++ b/userspace/programs/Shell/main.cpp
@@ -28,6 +28,12 @@ int main(int argc, char** argv)
 		sigaction(SIGTTOU, &sa, nullptr);
 	}
 
+	{
+		char cwd_buffer[PATH_MAX];
+		if (getcwd(cwd_buffer, sizeof(cwd_buffer)))
+			setenv("PWD", cwd_buffer, 1);
+	}
+
 	Builtin::get().initialize();
 
 	for (int i = 1; i < argc; i++)