diff --git a/benches/benchmarks.rs b/benches/benchmarks.rs
index 128049ed5b..7584a55756 100644
--- a/benches/benchmarks.rs
+++ b/benches/benchmarks.rs
@@ -4,10 +4,35 @@ use nu_parser::parse;
 use nu_plugin::{EncodingType, PluginResponse};
 use nu_protocol::{engine::EngineState, PipelineData, Span, Value};
 use nu_utils::{get_default_config, get_default_env};
+use std::path::{Path, PathBuf};
 
 fn load_bench_commands() -> EngineState {
     nu_command::add_shell_command_context(nu_cmd_lang::create_default_context())
 }
+
+fn canonicalize_path(engine_state: &EngineState, path: &Path) -> PathBuf {
+    let cwd = engine_state.current_work_dir();
+
+    if path.exists() {
+        match nu_path::canonicalize_with(path, cwd) {
+            Ok(canon_path) => canon_path,
+            Err(_) => path.to_owned(),
+        }
+    } else {
+        path.to_owned()
+    }
+}
+
+fn get_home_path(engine_state: &EngineState) -> PathBuf {
+    let home_path = if let Some(path) = nu_path::home_dir() {
+        let canon_home_path = canonicalize_path(engine_state, &path);
+        canon_home_path
+    } else {
+        std::path::PathBuf::new()
+    };
+    home_path
+}
+
 // FIXME: All benchmarks live in this 1 file to speed up build times when benchmarking.
 // When the *_benchmarks functions were in different files, `cargo bench` would build
 // an executable for every single one - incredibly slowly. Would be nice to figure out
@@ -15,10 +40,12 @@ fn load_bench_commands() -> EngineState {
 
 fn parser_benchmarks(c: &mut Criterion) {
     let mut engine_state = load_bench_commands();
-    // parsing config.nu breaks without PWD set
+    let home_path = get_home_path(&engine_state);
+
+    // parsing config.nu breaks without PWD set, so set a valid path
     engine_state.add_env_var(
         "PWD".into(),
-        Value::string("/some/dir".to_string(), Span::test_data()),
+        Value::string(home_path.to_string_lossy(), Span::test_data()),
     );
 
     let default_env = get_default_env().as_bytes();
@@ -41,7 +68,6 @@ fn parser_benchmarks(c: &mut Criterion) {
 
     c.bench_function("eval default_env.nu", |b| {
         b.iter(|| {
-            let mut engine_state = load_bench_commands();
             let mut stack = nu_protocol::engine::Stack::new();
             eval_source(
                 &mut engine_state,
@@ -56,12 +82,6 @@ fn parser_benchmarks(c: &mut Criterion) {
 
     c.bench_function("eval default_config.nu", |b| {
         b.iter(|| {
-            let mut engine_state = load_bench_commands();
-            // parsing config.nu breaks without PWD set
-            engine_state.add_env_var(
-                "PWD".into(),
-                Value::string("/some/dir".to_string(), Span::test_data()),
-            );
             let mut stack = nu_protocol::engine::Stack::new();
             eval_source(
                 &mut engine_state,
@@ -76,9 +96,17 @@ fn parser_benchmarks(c: &mut Criterion) {
 }
 
 fn eval_benchmarks(c: &mut Criterion) {
+    let mut engine_state = load_bench_commands();
+    let home_path = get_home_path(&engine_state);
+
+    // parsing config.nu breaks without PWD set, so set a valid path
+    engine_state.add_env_var(
+        "PWD".into(),
+        Value::string(home_path.to_string_lossy(), Span::test_data()),
+    );
+
     c.bench_function("eval default_env.nu", |b| {
         b.iter(|| {
-            let mut engine_state = load_bench_commands();
             let mut stack = nu_protocol::engine::Stack::new();
             eval_source(
                 &mut engine_state,
@@ -93,12 +121,6 @@ fn eval_benchmarks(c: &mut Criterion) {
 
     c.bench_function("eval default_config.nu", |b| {
         b.iter(|| {
-            let mut engine_state = load_bench_commands();
-            // parsing config.nu breaks without PWD set
-            engine_state.add_env_var(
-                "PWD".into(),
-                Value::string("/some/dir".to_string(), Span::test_data()),
-            );
             let mut stack = nu_protocol::engine::Stack::new();
             eval_source(
                 &mut engine_state,
diff --git a/crates/nu-utils/src/sample_config/default_env.nu b/crates/nu-utils/src/sample_config/default_env.nu
index 79b3285781..5585fac326 100644
--- a/crates/nu-utils/src/sample_config/default_env.nu
+++ b/crates/nu-utils/src/sample_config/default_env.nu
@@ -8,7 +8,7 @@ def create_left_prompt [] {
     # Perform tilde substitution on dir
     # To determine if the prefix of the path matches the home dir, we split the current path into
     # segments, and compare those with the segments of the home dir. In cases where the current dir
-    # is a parent of the home dir (e.g. `/home`, homedir is `/home/user`), this comparison will 
+    # is a parent of the home dir (e.g. `/home`, homedir is `/home/user`), this comparison will
     # also evaluate to true. Inside the condition, we attempt to str replace `$home` with `~`.
     # Inside the condition, either:
     # 1. The home prefix will be replaced
@@ -86,14 +86,14 @@ $env.ENV_CONVERSIONS = {
 }
 
 # Directories to search for scripts when calling source or use
+# The default for this is $nu.default-config-dir/scripts
 $env.NU_LIB_DIRS = [
-    # FIXME: This default is not implemented in rust code as of 2023-09-06.
     ($nu.default-config-dir | path join 'scripts') # add <nushell-config-dir>/scripts
 ]
 
 # Directories to search for plugin binaries when calling register
+# The default for this is $nu.default-config-dir/plugins
 $env.NU_PLUGIN_DIRS = [
-    # FIXME: This default is not implemented in rust code as of 2023-09-06.
     ($nu.default-config-dir | path join 'plugins') # add <nushell-config-dir>/plugins
 ]
 
diff --git a/src/main.rs b/src/main.rs
index abdfdbefab..87c0b73483 100644
--- a/src/main.rs
+++ b/src/main.rs
@@ -80,6 +80,33 @@ fn main() -> Result<()> {
     ctrlc_protection(&mut engine_state, &ctrlc);
     sigquit_protection(&mut engine_state);
 
+    // Begin: Default NU_LIB_DIRS, NU_PLUGIN_DIRS
+    // Set default NU_LIB_DIRS and NU_PLUGIN_DIRS here before the env.nu is processed. If
+    // the env.nu file exists, these values will be overwritten, if it does not exist, or
+    // there is an error reading it, these values will be used.
+    let nushell_config_path = if let Some(mut path) = nu_path::config_dir() {
+        path.push("nushell");
+        path
+    } else {
+        // Not really sure what to default this to if nu_path::config_dir() returns None
+        std::path::PathBuf::new()
+    };
+
+    let mut default_nu_lib_dirs_path = nushell_config_path.clone();
+    default_nu_lib_dirs_path.push("scripts");
+    engine_state.add_env_var(
+        "NU_LIB_DIRS".to_string(),
+        Value::test_string(default_nu_lib_dirs_path.to_string_lossy()),
+    );
+
+    let mut default_nu_plugin_dirs_path = nushell_config_path;
+    default_nu_plugin_dirs_path.push("plugins");
+    engine_state.add_env_var(
+        "NU_PLUGIN_DIRS".to_string(),
+        Value::test_string(default_nu_plugin_dirs_path.to_string_lossy()),
+    );
+    // End: Default NU_LIB_DIRS, NU_PLUGIN_DIRS
+
     // This is the real secret sauce to having an in-memory sqlite db. You must
     // start a connection to the memory database in main so it will exist for the
     // lifetime of the program. If it's created with how MEMORY_DB is defined