diff --git a/src/nvim/file_search.c b/src/nvim/file_search.c
index beefc4238e..f7555c99fa 100644
--- a/src/nvim/file_search.c
+++ b/src/nvim/file_search.c
@@ -1378,7 +1378,7 @@ find_file_in_path_option (
     /* copy file name into NameBuff, expanding environment variables */
     save_char = ptr[len];
     ptr[len] = NUL;
-    expand_env(ptr, NameBuff, MAXPATHL);
+    expand_env_esc(ptr, NameBuff, MAXPATHL, false, true, NULL);
     ptr[len] = save_char;
 
     xfree(ff_file_to_find);
diff --git a/src/nvim/version.c b/src/nvim/version.c
index 5c3e761225..0f51f4af6e 100644
--- a/src/nvim/version.c
+++ b/src/nvim/version.c
@@ -585,7 +585,7 @@ static int included_patches[] = {
   // 1111,
   1110,
   // 1109 NA
-  // 1108,
+  1108,
   1107,
   // 1106 NA
   1105,
diff --git a/test/functional/legacy/027_expand_file_names_spec.lua b/test/functional/legacy/027_expand_file_names_spec.lua
deleted file mode 100644
index 4778d16d43..0000000000
--- a/test/functional/legacy/027_expand_file_names_spec.lua
+++ /dev/null
@@ -1,37 +0,0 @@
--- Test for expanding file names
-
-local helpers = require('test.functional.helpers')
-local clear, feed = helpers.clear, helpers.feed
-local execute = helpers.execute
-local curbuf_contents = helpers.curbuf_contents
-local eq = helpers.eq
-
-describe('expand file name', function()
-  setup(clear)
-
-  it('is working', function()
-    execute('!mkdir Xdir1')
-    execute('!mkdir Xdir2')
-    execute('!mkdir Xdir3')
-    execute('cd Xdir3')
-    execute('!mkdir Xdir4')
-    execute('cd ..')
-    execute('w Xdir1/file')
-    execute('w Xdir3/Xdir4/file')
-    execute('n Xdir?/*/file')
-
-    -- Yank current file path to @a register
-    feed('i<C-R>%<Esc>V"ad')
-
-    -- Put @a and current file path in the current buffer
-    execute('n! Xdir?/*/nofile')
-    feed('V"ap')
-    feed('o<C-R>%<Esc>')
-
-    eq("Xdir3/Xdir4/file\nXdir?/*/nofile", curbuf_contents())
-  end)
-
-  teardown(function()
-    os.execute('rm -rf Xdir1 Xdir2 Xdir3')
-  end)
-end)
diff --git a/test/functional/legacy/expand_spec.lua b/test/functional/legacy/expand_spec.lua
new file mode 100644
index 0000000000..04701e8ba6
--- /dev/null
+++ b/test/functional/legacy/expand_spec.lua
@@ -0,0 +1,65 @@
+-- Test for expanding file names
+
+local helpers = require('test.functional.helpers')
+local eq = helpers.eq
+local call = helpers.call
+local nvim = helpers.meths
+local clear = helpers.clear
+local source = helpers.source
+
+local function expected_empty()
+  eq({}, nvim.get_vvar('errors'))
+end
+
+describe('expand file name', function()
+  before_each(function()
+    clear()
+
+    source([[
+      func Test_with_directories()
+        call mkdir('Xdir1')
+        call mkdir('Xdir2')
+        call mkdir('Xdir3')
+        cd Xdir3
+        call mkdir('Xdir4')
+        cd ..
+
+        split Xdir1/file
+        call setline(1, ['a', 'b'])
+        w
+        w Xdir3/Xdir4/file
+        close
+
+        next Xdir?/*/file
+        call assert_equal('Xdir3/Xdir4/file', expand('%'))
+        next! Xdir?/*/nofile
+        call assert_equal('Xdir?/*/nofile', expand('%'))
+
+        call delete('Xdir1', 'rf')
+        call delete('Xdir2', 'rf')
+        call delete('Xdir3', 'rf')
+      endfunc
+
+      func Test_with_tilde()
+        let dir = getcwd()
+        call mkdir('Xdir ~ dir')
+        call assert_true(isdirectory('Xdir ~ dir'))
+        cd Xdir\ ~\ dir
+        call assert_true(getcwd() =~ 'Xdir \~ dir')
+        exe 'cd ' . fnameescape(dir)
+        call delete('Xdir ~ dir', 'd')
+        call assert_false(isdirectory('Xdir ~ dir'))
+      endfunc
+    ]])
+  end)
+
+  it('works with directories', function()
+    call('Test_with_directories')
+    expected_empty()
+  end)
+
+  it('works with tilde', function()
+    call('Test_with_tilde')
+    expected_empty()
+  end)
+end)