diff --git a/docs/guides/configuration.md b/docs/guides/configuration.md
index d2e294a589..d6d4f20c11 100644
--- a/docs/guides/configuration.md
+++ b/docs/guides/configuration.md
@@ -21,6 +21,9 @@ The sources have the following order of precedence:
 2. `config.yaml` or `config.py` in the `~/.sqlmesh` folder.
 3. `config.yaml` or `config.py` in a project folder. [LOWEST PRECEDENCE]
 
+!!! note
+    To relocate the `.sqlmesh` folder, set the `SQLMESH_HOME` environment variable to your preferred directory path.
+
 ### File type
 
 You can specify a SQLMesh configuration in either YAML or Python.
diff --git a/sqlmesh/core/constants.py b/sqlmesh/core/constants.py
index a1d117f4fb..66dadb0b5d 100644
--- a/sqlmesh/core/constants.py
+++ b/sqlmesh/core/constants.py
@@ -8,7 +8,7 @@
 
 SQLMESH = "sqlmesh"
 SQLMESH_MANAGED = "sqlmesh_managed"
-SQLMESH_PATH = Path.home() / ".sqlmesh"
+SQLMESH_PATH = Path(os.getenv("SQLMESH_HOME") or Path.home() / ".sqlmesh")
 
 PROD = "prod"
 """Prod"""
diff --git a/tests/core/engine_adapter/integration/conftest.py b/tests/core/engine_adapter/integration/conftest.py
index 30f934da63..308819b671 100644
--- a/tests/core/engine_adapter/integration/conftest.py
+++ b/tests/core/engine_adapter/integration/conftest.py
@@ -9,6 +9,7 @@
 
 
 from sqlmesh import Config, EngineAdapter
+from sqlmesh.core.constants import SQLMESH_PATH
 from sqlmesh.core.config.connection import (
     ConnectionConfig,
     AthenaConnectionConfig,
@@ -34,7 +35,7 @@ def config(tmp_path: pathlib.Path) -> Config:
         project_paths=[
             pathlib.Path(os.path.join(os.path.dirname(__file__), "config.yaml")),
         ],
-        personal_paths=[pathlib.Path("~/.sqlmesh/config.yaml").expanduser()],
+        personal_paths=[(SQLMESH_PATH / "config.yaml").expanduser()],
         variables={"tmp_path": str(tmp_path)},
     )
 
diff --git a/tests/core/engine_adapter/test_trino.py b/tests/core/engine_adapter/test_trino.py
index 526cb05b04..bf925c875a 100644
--- a/tests/core/engine_adapter/test_trino.py
+++ b/tests/core/engine_adapter/test_trino.py
@@ -669,7 +669,7 @@ def test_replace_table_catalog_support(
 
     adapter.replace_query(
         table_name=".".join([catalog_name, "schema", "test_table"]),
-        query_or_df=parse_one("SELECT 1 AS col"),
+        query_or_df=t.cast(exp.Query, parse_one("SELECT 1 AS col")),
     )
 
     sql_calls = to_sql_calls(adapter)
@@ -705,7 +705,7 @@ def test_insert_overwrite_time_partition_hive(
 
     adapter.insert_overwrite_by_time_partition(
         table_name=".".join(["my_catalog", "schema", "test_table"]),
-        query_or_df=parse_one("SELECT a, b FROM tbl"),
+        query_or_df=t.cast(exp.Query, parse_one("SELECT a, b FROM tbl")),
         start="2022-01-01",
         end="2022-01-02",
         time_column="b",
@@ -743,7 +743,7 @@ def test_insert_overwrite_time_partition_iceberg(
 
     adapter.insert_overwrite_by_time_partition(
         table_name=".".join(["my_catalog", "schema", "test_table"]),
-        query_or_df=parse_one("SELECT a, b FROM tbl"),
+        query_or_df=t.cast(exp.Query, parse_one("SELECT a, b FROM tbl")),
         start="2022-01-01",
         end="2022-01-02",
         time_column="b",
diff --git a/tests/dbt/test_adapter.py b/tests/dbt/test_adapter.py
index 381401ce73..5570212668 100644
--- a/tests/dbt/test_adapter.py
+++ b/tests/dbt/test_adapter.py
@@ -39,7 +39,7 @@ def test_adapter_relation(sushi_test_project: Project, runtime_renderer: t.Calla
         table_name="foo.another", target_columns_to_types={"col": exp.DataType.build("int")}
     )
     engine_adapter.create_view(
-        view_name="foo.bar_view", query_or_df=parse_one("select * from foo.bar")
+        view_name="foo.bar_view", query_or_df=t.cast(exp.Query, parse_one("select * from foo.bar"))
     )
     engine_adapter.create_table(
         table_name="ignored.ignore", target_columns_to_types={"col": exp.DataType.build("int")}