diff --git a/tests/test_completion/test_completion_install.py b/tests/test_completion/test_completion_install.py
index f6194695fe..bb02c6530c 100644
--- a/tests/test_completion/test_completion_install.py
+++ b/tests/test_completion/test_completion_install.py
@@ -110,6 +110,47 @@ def test_completion_install_zsh():
     )
 
 
+@requires_completion_permission
+def test_completion_install_zsh_zdotdir(tmp_path: Path):
+    """Test that ZDOTDIR is respected for zsh completion installation."""
+    zdotdir = tmp_path / "custom_zsh"
+    zdotdir.mkdir()
+    zshrc_path = zdotdir / ".zshrc"
+    zshrc_path.write_text('echo "custom .zshrc"\n')
+    result = subprocess.run(
+        [
+            sys.executable,
+            "-m",
+            "coverage",
+            "run",
+            mod.__file__,
+            "--install-completion",
+            "zsh",
+        ],
+        capture_output=True,
+        encoding="utf-8",
+        env={
+            **os.environ,
+            "_TYPER_COMPLETE_TEST_DISABLE_SHELL_DETECTION": "True",
+            "ZDOTDIR": str(zdotdir),
+        },
+    )
+    assert "completion installed in" in result.stdout
+    assert "Completion will take effect once you restart the terminal" in result.stdout
+    # .zshrc should be modified in ZDOTDIR, not HOME
+    new_text = zshrc_path.read_text()
+    assert "compinit" in new_text
+    assert "$ZDOTDIR/.zfunc" in new_text
+    # Completion file should be installed under ZDOTDIR/.zfunc/
+    install_source_path = zdotdir / ".zfunc/_tutorial001_py310.py"
+    assert install_source_path.is_file()
+    install_content = install_source_path.read_text()
+    assert (
+        "compdef _tutorial001_py310py_completion tutorial001_py310.py"
+        in install_content
+    )
+
+
 @requires_completion_permission
 def test_completion_install_fish():
     script_path = Path(mod.__file__)
diff --git a/typer/_completion_shared.py b/typer/_completion_shared.py
index 5a81dcf68c..c4f61fa911 100644
--- a/typer/_completion_shared.py
+++ b/typer/_completion_shared.py
@@ -118,12 +118,17 @@ def install_bash(*, prog_name: str, complete_var: str, shell: str) -> Path:
 
 def install_zsh(*, prog_name: str, complete_var: str, shell: str) -> Path:
     # Setup Zsh and load ~/.zfunc
-    zshrc_path = Path.home() / ".zshrc"
+    # Respect ZDOTDIR if set, as zsh uses it to locate .zshrc
+    zdotdir = os.environ.get("ZDOTDIR")
+    zsh_home = Path(zdotdir) if zdotdir else Path.home()
+    zshrc_path = zsh_home / ".zshrc"
     zshrc_path.parent.mkdir(parents=True, exist_ok=True)
     zshrc_content = ""
     if zshrc_path.is_file():
         zshrc_content = zshrc_path.read_text()
-    completion_line = "fpath+=~/.zfunc; autoload -Uz compinit; compinit"
+    zfunc_path = zsh_home / ".zfunc"
+    zfunc_str = f"$ZDOTDIR/.zfunc" if zdotdir else "~/.zfunc"
+    completion_line = f"fpath+={zfunc_str}; autoload -Uz compinit; compinit"
     if completion_line not in zshrc_content:
         zshrc_content += f"\n{completion_line}\n"
     style_line = "zstyle ':completion:*' menu select"
@@ -134,8 +139,8 @@ def install_zsh(*, prog_name: str, complete_var: str, shell: str) -> Path:
         zshrc_content += f"\n{style_line}\n"
     zshrc_content = f"{zshrc_content.strip()}\n"
     zshrc_path.write_text(zshrc_content)
-    # Install completion under ~/.zfunc/
-    path_obj = Path.home() / f".zfunc/_{prog_name}"
+    # Install completion under .zfunc/
+    path_obj = zsh_home / f".zfunc/_{prog_name}"
     path_obj.parent.mkdir(parents=True, exist_ok=True)
     script_content = get_completion_script(
         prog_name=prog_name, complete_var=complete_var, shell=shell