diff --git a/cmd/minikube/cmd/root.go b/cmd/minikube/cmd/root.go
index 95ca12496d..de46f4704d 100644
--- a/cmd/minikube/cmd/root.go
+++ b/cmd/minikube/cmd/root.go
@@ -35,8 +35,9 @@ var dirs = [...]string{
 	constants.Minipath,
 	constants.MakeMiniPath("certs"),
 	constants.MakeMiniPath("machines"),
-	constants.MakeMiniPath("iso"),
-	constants.MakeMiniPath("localkube"),
+	constants.MakeMiniPath("cache"),
+	constants.MakeMiniPath("cache", "iso"),
+	constants.MakeMiniPath("cache", "localkube"),
 	constants.MakeMiniPath("config")}
 
 var (
diff --git a/pkg/minikube/cluster/cluster.go b/pkg/minikube/cluster/cluster.go
index 09e153fa12..265910033f 100644
--- a/pkg/minikube/cluster/cluster.go
+++ b/pkg/minikube/cluster/cluster.go
@@ -25,6 +25,7 @@ import (
 	"net"
 	"net/http"
 	"os"
+	"path"
 	"path/filepath"
 	"strings"
 	"time"
@@ -296,56 +297,52 @@ func engineOptions(config MachineConfig) *engine.Options {
 
 func createVirtualboxHost(config MachineConfig) drivers.Driver {
 	d := virtualbox.NewDriver(constants.MachineName, constants.Minipath)
-	d.Boot2DockerURL = config.MinikubeISO
+	d.Boot2DockerURL = config.GetISOCacheFileURI()
 	d.Memory = config.Memory
 	d.CPU = config.CPUs
 	d.DiskSize = int(config.DiskSize)
 	return d
 }
 
-func isISONotCachedInMinikubeDir(isoFilePath string) bool {
-	if _, err := os.Stat(isoFilePath); os.IsNotExist(err) {
-		return true
-	}
-	return false
-}
-
-func getISOFilePathFromConfig(config MachineConfig) string {
-	split := strings.Split(config.MinikubeISO, "/")
-	isoFilename := split[len(split)-1]
-	return filepath.Join(constants.Minipath, "iso", isoFilename)
-}
-
-func modifyConfigForCachedIso(isoFilePath string, config *MachineConfig) error {
-	if isISONotCachedInMinikubeDir(isoFilePath) {
-		// download miniube-iso to .minikube dir
-		response, err := http.Get(config.MinikubeISO)
+func (m *MachineConfig) CacheMinikubeISO() error {
+	// store the miniube-iso inside the .minikube dir
+	response, err := http.Get(m.MinikubeISO)
+	if err != nil {
+		return err
+	} else {
+		out, err := os.Create(m.GetISOCacheFilepath())
 		if err != nil {
 			return err
-		} else {
-			out, err := os.Create(isoFilePath)
-			if err != nil {
-				return err
-			}
-			defer out.Close()
-			defer response.Body.Close()
-			_, err = io.Copy(out, response.Body)
-			if err != nil {
-				return err
-			}
+		}
+		defer out.Close()
+		defer response.Body.Close()
+		if _, err = io.Copy(out, response.Body); err != nil {
+			return err
 		}
 	}
-	config.MinikubeISO = "file://" + isoFilePath
 	return nil
 }
 
+func (m *MachineConfig) GetISOCacheFilepath() string {
+	return filepath.Join(constants.Minipath, "cache", "iso", filepath.Base(m.MinikubeISO))
+}
+
+func (m *MachineConfig) GetISOCacheFileURI() string {
+	return "file://" + path.Join(constants.Minipath, "cache", "iso", filepath.Base(m.MinikubeISO))
+}
+
+func (m *MachineConfig) IsMinikubeISOCached() bool {
+	if _, err := os.Stat(m.GetISOCacheFilepath()); os.IsNotExist(err) {
+		return false
+	}
+	return true
+}
+
 func createHost(api libmachine.API, config MachineConfig) (*host.Host, error) {
 	var driver interface{}
 
-	//check cache for iso and change iso method appropriately
-	fmt.Println(config.MinikubeISO)
-	if config.MinikubeISO != "" { // "" is a test param
-		if err := modifyConfigForCachedIso(getISOFilePathFromConfig(config), &config); err != nil {
+	if !config.IsMinikubeISOCached() {
+		if err := config.CacheMinikubeISO(); err != nil {
 			return nil, err
 		}
 	}
diff --git a/pkg/minikube/cluster/cluster_darwin.go b/pkg/minikube/cluster/cluster_darwin.go
index b0a742de45..998b501499 100644
--- a/pkg/minikube/cluster/cluster_darwin.go
+++ b/pkg/minikube/cluster/cluster_darwin.go
@@ -24,7 +24,7 @@ import (
 
 func createVMwareFusionHost(config MachineConfig) drivers.Driver {
 	d := vmwarefusion.NewDriver(constants.MachineName, constants.Minipath).(*vmwarefusion.Driver)
-	d.Boot2DockerURL = config.MinikubeISO
+	d.Boot2DockerURL = config.GetISOCacheFileURI()
 	d.Memory = config.Memory
 	d.CPU = config.CPUs
 
@@ -59,7 +59,7 @@ func createXhyveHost(config MachineConfig) *xhyveDriver {
 		},
 		Memory:         config.Memory,
 		CPU:            config.CPUs,
-		Boot2DockerURL: config.MinikubeISO,
+		Boot2DockerURL: config.GetISOCacheFileURI(),
 		BootCmd:        "loglevel=3 user=docker console=ttyS0 console=tty0 noembed nomodeset norestore waitusb=10 base host=boot2docker",
 		DiskSize:       int64(config.DiskSize),
 	}
diff --git a/pkg/minikube/cluster/cluster_linux.go b/pkg/minikube/cluster/cluster_linux.go
index a9e3712966..9edb8c50aa 100644
--- a/pkg/minikube/cluster/cluster_linux.go
+++ b/pkg/minikube/cluster/cluster_linux.go
@@ -49,7 +49,7 @@ func createKVMHost(config MachineConfig) *kvmDriver {
 		CPU:            config.CPUs,
 		Network:        "default",
 		PrivateNetwork: "docker-machines",
-		Boot2DockerURL: config.MinikubeISO,
+		Boot2DockerURL: config.GetISOCacheFileURI(),
 		DiskSize:       config.DiskSize,
 		DiskPath:       filepath.Join(constants.Minipath, "machines", constants.MachineName, fmt.Sprintf("%s.img", constants.MachineName)),
 		ISO:            filepath.Join(constants.Minipath, "machines", constants.MachineName, "boot2docker.iso"),
diff --git a/pkg/minikube/cluster/cluster_test.go b/pkg/minikube/cluster/cluster_test.go
index dc30e9c4d1..7e26097361 100644
--- a/pkg/minikube/cluster/cluster_test.go
+++ b/pkg/minikube/cluster/cluster_test.go
@@ -33,7 +33,8 @@ import (
 	"k8s.io/minikube/pkg/minikube/tests"
 )
 
-var defaultMachineConfig = MachineConfig{VMDriver: constants.DefaultVMDriver}
+var defaultMachineConfig = MachineConfig{VMDriver: constants.DefaultVMDriver,
+	MinikubeISO: constants.DefaultIsoUrl}
 
 func TestCreateHost(t *testing.T) {
 	api := tests.NewMockAPI()
@@ -361,6 +362,9 @@ func TestSetupCerts(t *testing.T) {
 }
 
 func TestGetHostDockerEnv(t *testing.T) {
+	tempDir := tests.MakeTempDir()
+	defer os.RemoveAll(tempDir)
+
 	api := tests.NewMockAPI()
 	h, err := createHost(api, defaultMachineConfig)
 	if err != nil {
diff --git a/pkg/minikube/constants/constants.go b/pkg/minikube/constants/constants.go
index 24f6dc9480..3508388f61 100644
--- a/pkg/minikube/constants/constants.go
+++ b/pkg/minikube/constants/constants.go
@@ -40,8 +40,10 @@ var KubeconfigPath = clientcmd.RecommendedHomeFile
 const MinikubeContext = "minikube"
 
 // MakeMiniPath is a utility to calculate a relative path to our directory.
-func MakeMiniPath(fileName string) string {
-	return filepath.Join(Minipath, fileName)
+func MakeMiniPath(fileName ...string) string {
+	args := []string{Minipath}
+	args = append(args, fileName...)
+	return filepath.Join(args...)
 }
 
 // Only pass along these flags to localkube.
diff --git a/pkg/minikube/tests/dir_utils.go b/pkg/minikube/tests/dir_utils.go
index 041c718d70..843c11c3bf 100644
--- a/pkg/minikube/tests/dir_utils.go
+++ b/pkg/minikube/tests/dir_utils.go
@@ -19,6 +19,8 @@ package tests
 import (
 	"io/ioutil"
 	"log"
+	"os"
+	"path/filepath"
 
 	"k8s.io/minikube/pkg/minikube/constants"
 )
@@ -28,6 +30,14 @@ func MakeTempDir() string {
 	if err != nil {
 		log.Fatal(err)
 	}
+	err = os.MkdirAll(filepath.Join(tempDir, "cache", "iso"), 0777)
+	if err != nil {
+		log.Fatal(err)
+	}
+	err = os.MkdirAll(filepath.Join(tempDir, "cache", "localkube"), 0777)
+	if err != nil {
+		log.Fatal(err)
+	}
 	constants.Minipath = tempDir
 	return tempDir
 }