diff --git a/tests/test_cli_cd.py b/tests/test_cli_cd.py
index 4b39cab..edf6e39 100644
--- a/tests/test_cli_cd.py
+++ b/tests/test_cli_cd.py
@@ -25,3 +25,29 @@ def fake_run_external_command(command: str, shell: bool = True, check: bool = Fa
     assert Path.cwd() == target
     assert not called
     assert str(target) in capsys.readouterr().out
+
+
+def test_handle_cd_command_expands_environment_variables(tmp_path, monkeypatch, capsys):
+    monkeypatch.chdir(tmp_path)
+    target = tmp_path / "env-target"
+    target.mkdir()
+    monkeypatch.setenv("TRUSHELL_CD_TARGET", str(target))
+
+    result = cli._handle_cd_command("cd $TRUSHELL_CD_TARGET")
+
+    assert result is True
+    assert Path.cwd() == target
+    assert str(target) in capsys.readouterr().out
+
+
+def test_handle_cd_command_strips_trailing_whitespace(tmp_path, monkeypatch, capsys):
+    monkeypatch.chdir(tmp_path)
+    target = tmp_path / "space-target"
+    target.mkdir()
+    monkeypatch.setenv("TRUSHELL_CD_TARGET", str(target))
+
+    result = cli._handle_cd_command("cd $TRUSHELL_CD_TARGET   ")
+
+    assert result is True
+    assert Path.cwd() == target
+    assert str(target) in capsys.readouterr().out
diff --git a/trushell/cli.py b/trushell/cli.py
index ff10ff7..820aee7 100644
--- a/trushell/cli.py
+++ b/trushell/cli.py
@@ -274,6 +274,7 @@ def _handle_chronoterm_command(raw_command: str, normalized_command: str) -> boo
         return False
 
 
+# TODO: Deprecate this CLI cd stub in favor of kernel dispatch to avoid duplicate path handling logic.
 def _handle_cd_command(raw_command: str) -> bool:
     command, argument = _split_command(raw_command)
     if command != "cd":
@@ -283,7 +284,7 @@ def _handle_cd_command(raw_command: str) -> bool:
         typer.secho("Syntax: cd <directory_path>", fg=typer.colors.YELLOW)
         return True
 
-    target = os.path.expanduser(argument)
+    target = os.path.expandvars(os.path.expanduser(argument.strip()))
 
     try:
         os.chdir(target)