diff --git a/crates/uv-cli/src/lib.rs b/crates/uv-cli/src/lib.rs
index 16d8f871b..cfa91fb79 100644
--- a/crates/uv-cli/src/lib.rs
+++ b/crates/uv-cli/src/lib.rs
@@ -2842,7 +2842,15 @@ pub struct ToolDirArgs {
     ///
     /// By default, `uv tool dir` shows the directory into which the tool Python environments
     /// themselves are installed, rather than the directory containing the linked executables.
-    #[arg(long)]
+    ///
+    /// The tool executable directory is determined according to the XDG standard and is derived
+    /// from the following environment variables, in order of preference:
+    ///
+    /// - `$UV_TOOL_BIN_DIR`
+    /// - `$XDG_BIN_HOME`
+    /// - `$XDG_DATA_HOME/../bin`
+    /// - `$HOME/.local/bin`
+    #[arg(long, verbatim_doc_comment)]
     pub bin: bool,
 }
 
diff --git a/crates/uv-tool/src/lib.rs b/crates/uv-tool/src/lib.rs
index e959523b3..fc6aef6c5 100644
--- a/crates/uv-tool/src/lib.rs
+++ b/crates/uv-tool/src/lib.rs
@@ -349,6 +349,7 @@ impl fmt::Display for InstalledTool {
 ///
 /// This follows, in order:
 ///
+/// - `$UV_TOOL_BIN_DIR`
 /// - `$XDG_BIN_HOME`
 /// - `$XDG_DATA_HOME/../bin`
 /// - `$HOME/.local/bin`
@@ -357,8 +358,9 @@ impl fmt::Display for InstalledTool {
 ///
 /// Errors if a directory cannot be found.
 pub fn find_executable_directory() -> Result<PathBuf, Error> {
-    std::env::var_os("XDG_BIN_HOME")
+    std::env::var_os("UV_TOOL_BIN_DIR")
         .and_then(dirs_sys::is_absolute_path)
+        .or_else(|| std::env::var_os("XDG_BIN_HOME").and_then(dirs_sys::is_absolute_path))
         .or_else(|| {
             std::env::var_os("XDG_DATA_HOME")
                 .and_then(dirs_sys::is_absolute_path)
diff --git a/crates/uv/tests/tool_install.rs b/crates/uv/tests/tool_install.rs
index a4a2d69d7..df92e4db7 100644
--- a/crates/uv/tests/tool_install.rs
+++ b/crates/uv/tests/tool_install.rs
@@ -1370,6 +1370,42 @@ fn tool_install_xdg_bin_home() {
         .assert(predicate::path::exists());
 }
 
+/// Test `uv tool install` when the bin directory is set by `$UV_TOOL_BIN_DIR`
+#[test]
+fn tool_install_tool_bin_dir() {
+    let context = TestContext::new("3.12").with_filtered_exe_suffix();
+    let tool_dir = context.temp_dir.child("tools");
+    let bin_dir = context.temp_dir.child("bin");
+
+    // Install `black`
+    uv_snapshot!(context.filters(), context.tool_install()
+        .arg("black")
+        .env("UV_TOOL_DIR", tool_dir.as_os_str())
+        .env("UV_TOOL_BIN_DIR", bin_dir.as_os_str())
+        .env("PATH", bin_dir.as_os_str()), @r###"
+    success: true
+    exit_code: 0
+    ----- stdout -----
+
+    ----- stderr -----
+    warning: `uv tool install` is experimental and may change without warning
+    Resolved 6 packages in [TIME]
+    Prepared 6 packages in [TIME]
+    Installed 6 packages in [TIME]
+     + black==24.3.0
+     + click==8.1.7
+     + mypy-extensions==1.0.0
+     + packaging==24.0
+     + pathspec==0.12.1
+     + platformdirs==4.2.0
+    Installed 2 executables: black, blackd
+    "###);
+
+    bin_dir
+        .child(format!("black{}", std::env::consts::EXE_SUFFIX))
+        .assert(predicate::path::exists());
+}
+
 /// Test installing a tool that lacks entrypoints
 #[test]
 fn tool_install_no_entrypoints() {
diff --git a/docs/concepts/tools.md b/docs/concepts/tools.md
index cdc6a4226..5292322f1 100644
--- a/docs/concepts/tools.md
+++ b/docs/concepts/tools.md
@@ -122,6 +122,7 @@ notably including Windows and macOS — there is no clear alternative location t
 these platforms. The installation directory is determined from the first available environment
 variable:
 
+- `$UV_TOOL_BIN_DIR`
 - `$XDG_BIN_HOME`
 - `$XDG_DATA_HOME/../bin`
 - `$HOME/.local/bin`
diff --git a/docs/configuration/environment.md b/docs/configuration/environment.md
index a16296e62..e80f690ff 100644
--- a/docs/configuration/environment.md
+++ b/docs/configuration/environment.md
@@ -68,6 +68,7 @@ In addition, uv respects the following environment variables:
 - `UV_CONCURRENT_INSTALLS`: Used to control the number of threads used when installing and unzipping
   packages.
 - `UV_TOOL_DIR`: Used to specify the directory where uv will store managed tools.
+- `UV_TOOL_BIN_DIR`: Used to specify the "bin" directory where uv will install tool executables.
 - `UV_PYTHON_INSTALL_DIR`: Used to specify the directory where uv will store managed Python
   installations.
 - `UV_PYTHON_INSTALL_MIRROR`: Managed Python installations are downloaded from
diff --git a/docs/reference/cli.md b/docs/reference/cli.md
index a6c1e9d90..36da9eac7 100644
--- a/docs/reference/cli.md
+++ b/docs/reference/cli.md
@@ -2769,6 +2769,18 @@ uv tool dir [OPTIONS]
 
 <p>By default, <code>uv tool dir</code> shows the directory into which the tool Python environments themselves are installed, rather than the directory containing the linked executables.</p>
 
+<p>The tool executable directory is determined according to the XDG standard and is derived from the following environment variables, in order of preference:</p>
+
+<ul>
+<li><code>$UV_TOOL_BIN_DIR</code></li>
+
+<li><code>$XDG_BIN_HOME</code></li>
+
+<li><code>$XDG_DATA_HOME/../bin</code></li>
+
+<li><code>$HOME/.local/bin</code></li>
+</ul>
+
 </dd><dt><code>--cache-dir</code> <i>cache-dir</i></dt><dd><p>Path to the cache directory.</p>
 
 <p>Defaults to <code>$HOME/Library/Caches/uv</code> on macOS, <code>$XDG_CACHE_HOME/uv</code> or <code>$HOME/.cache/uv</code> on Linux, and <code>{FOLDERID_LocalAppData}\uv\cache</code> on Windows.</p>