diff --git a/easybuild/tools/options.py b/easybuild/tools/options.py
index 8a95aa7226..c927b841a2 100644
--- a/easybuild/tools/options.py
+++ b/easybuild/tools/options.py
@@ -105,6 +105,7 @@
 from easybuild.tools.repository.repository import avail_repositories
 from easybuild.tools.systemtools import DARWIN, UNKNOWN, check_python_version, get_cpu_architecture, get_cpu_family
 from easybuild.tools.systemtools import get_cpu_features, get_gpu_info, get_os_type, get_system_info
+from easybuild.tools.utilities import flatten
 from easybuild.tools.version import this_is_easybuild
 
 
@@ -124,7 +125,8 @@ def terminal_supports_colors(stream):
 
 XDG_CONFIG_HOME = os.environ.get('XDG_CONFIG_HOME', os.path.join(os.path.expanduser('~'), ".config"))
 XDG_CONFIG_DIRS = os.environ.get('XDG_CONFIG_DIRS', '/etc/xdg').split(os.pathsep)
-DEFAULT_SYS_CFGFILES = [f for d in XDG_CONFIG_DIRS for f in sorted(glob.glob(os.path.join(d, 'easybuild.d', '*.cfg')))]
+DEFAULT_SYS_CFGFILES = [[f for f in sorted(glob.glob(os.path.join(d, 'easybuild.d', '*.cfg')))]
+                        for d in XDG_CONFIG_DIRS]
 DEFAULT_USER_CFGFILE = os.path.join(XDG_CONFIG_HOME, 'easybuild', 'config.cfg')
 
 DEFAULT_LIST_PR_STATE = GITHUB_PR_STATE_OPEN
@@ -212,7 +214,11 @@ class EasyBuildOptions(GeneralOption):
     VERSION = this_is_easybuild()
 
     DEFAULT_LOGLEVEL = 'INFO'
-    DEFAULT_CONFIGFILES = DEFAULT_SYS_CFGFILES[:]
+    # https://specifications.freedesktop.org/basedir-spec/latest/
+    # says precedence should be
+    # XDG_CONFIG_HOME > 1st entry of XDG_CONFIG_DIRS > 2nd entry ...
+    # EasyBuild parses this list backwards, gives priority to last entry
+    DEFAULT_CONFIGFILES = flatten(DEFAULT_SYS_CFGFILES[::-1])
     if 'XDG_CONFIG_DIRS' not in os.environ:
         old_etc_location = os.path.join('/etc', 'easybuild.d')
         if os.path.isdir(old_etc_location) and glob.glob(os.path.join(old_etc_location, '*.cfg')):
@@ -1329,9 +1335,10 @@ def show_default_configfiles(self):
             "* user-level: %s" % os.path.join('${XDG_CONFIG_HOME:-$HOME/.config}', 'easybuild', 'config.cfg'),
             "  -> %s => %s" % (DEFAULT_USER_CFGFILE, ('not found', 'found')[os.path.exists(DEFAULT_USER_CFGFILE)]),
             "* system-level: %s" % os.path.join('${XDG_CONFIG_DIRS:-/etc/xdg}', 'easybuild.d', '*.cfg'),
-            "  -> %s => %s" % (system_cfg_glob_paths, ', '.join(DEFAULT_SYS_CFGFILES) or "(no matches)"),
+            "  -> %s => %s" % (system_cfg_glob_paths, ', '.join(flatten(DEFAULT_SYS_CFGFILES)) or "(no matches)"),
             '',
-            "Default list of existing configuration files (%d): %s" % (found_cfgfile_cnt, found_cfgfile_list),
+            "Default list of existing configuration files (%d, most important last):" % found_cfgfile_cnt,
+            found_cfgfile_list,
         ]
         return '\n'.join(lines)
 
diff --git a/test/framework/config.py b/test/framework/config.py
index 337c7b9b87..08a1a83355 100644
--- a/test/framework/config.py
+++ b/test/framework/config.py
@@ -448,7 +448,7 @@ def test_XDG_CONFIG_env_vars(self):
 
         # $XDG_CONFIG_HOME not set, multiple directories listed in $XDG_CONFIG_DIRS
         del os.environ['XDG_CONFIG_HOME']  # unset, so should become default
-        os.environ['XDG_CONFIG_DIRS'] = os.pathsep.join([dir1, dir2, dir3])
+        os.environ['XDG_CONFIG_DIRS'] = os.pathsep.join([dir3, dir2, dir1])
         cfg_files = [
             os.path.join(dir1, 'easybuild.d', 'bar.cfg'),
             os.path.join(dir1, 'easybuild.d', 'foo.cfg'),
diff --git a/test/framework/options.py b/test/framework/options.py
index d30fa7b390..007986c39c 100644
--- a/test/framework/options.py
+++ b/test/framework/options.py
@@ -3523,7 +3523,8 @@ def test_show_default_configfiles(self):
         expected_tmpl += '\n'.join([
             "%s",
             '',
-            "Default list of existing configuration files (%d): %s",
+            "Default list of existing configuration files (%d, most important last):",
+            "%s",
         ])
 
         # put dummy cfgfile in place in $HOME (to predict last line of output which only lists *existing* files)
@@ -3542,7 +3543,7 @@ def test_show_default_configfiles(self):
 
         xdg_config_home = os.path.join(self.test_prefix, 'home')
         os.environ['XDG_CONFIG_HOME'] = xdg_config_home
-        xdg_config_dirs = [os.path.join(self.test_prefix, 'etc', 'xdg'), os.path.join(self.test_prefix, 'moaretc')]
+        xdg_config_dirs = [os.path.join(self.test_prefix, 'moaretc'), os.path.join(self.test_prefix, 'etc', 'xdg')]
         os.environ['XDG_CONFIG_DIRS'] = os.pathsep.join(xdg_config_dirs)
 
         # put various dummy cfgfiles in place
@@ -3564,7 +3565,7 @@ def test_show_default_configfiles(self):
         expected = expected_tmpl % (xdg_config_home, os.pathsep.join(xdg_config_dirs),
                                     "%s => found" % os.path.join(xdg_config_home, 'easybuild', 'config.cfg'),
                                     '{' + ', '.join(xdg_config_dirs) + '}',
-                                    ', '.join(cfgfiles[:-1]), 4, ', '.join(cfgfiles))
+                                    ', '.join(cfgfiles[1:3]+[cfgfiles[0]]), 4, ', '.join(cfgfiles))
         self.assertIn(expected, logtxt)
 
         del os.environ['XDG_CONFIG_DIRS']