diff --git a/doc/vcsh.1.ronn b/doc/vcsh.1.ronn
index bab8bcd76cf9386ae605741f081f48457a4b99aa..efb5ba5cdc19e671ba6c970bff6dd65ef68e0376 100644
--- a/doc/vcsh.1.ronn
+++ b/doc/vcsh.1.ronn
@@ -130,6 +130,59 @@ an interactive user.
 As noted earlier, `vcsh` will set <$GIT_DIR> and <$GIT_WORK_TREE> to the
 appropriate values for fake bare git repositories.
 
+## CONFIG
+
+There are several ways to turn the various knobs on `vcsh`. In order of
+ascending precedence, they are:
+
+* `VARIABLE=foo vcsh`
+* </etc/vcsh/config>
+* <$XDG_CONFIG_HOME/vcsh/config>
+* `vcsh -c <file>`
+
+Please note that those files are sourced. Any and all commands will be
+executed in the context of your shell.
+
+Interesting knobs you can turn:
+
+* <$VCSH_GITIGNORE>:
+  Can be either <exact> or <recursive>.
+
+  <exact> will seed the repo-specific <.gitignore> with all file and directory
+  names which `git ls-files` returns.
+
+  <recursive> will descend through all directories recursively additionally to
+  the above.
+
+  Defaults to <exact>.
+
+Less interesting knobs you could turn:
+
+* <$VCSH_DEBUG>:
+  Enter debug mode.
+
+* <$XDG_CONFIG_HOME>:
+  As specified in the 'XDG Base Directory Specification', see
+  <http://standards.freedesktop.org/basedir-spec/basedir-spec-latest.html>
+
+  Defaults to <$HOME/.config>.
+
+* <$VCSH_REPO_D>:
+  The directory where repositories are read from and stored.
+
+  Defaults to <$XDG_CONFIG_HOME/vcsh/repo.d>.
+
+* <$VCSH_HOOK_D>:
+  The directory where hooks are read from.
+
+  Defaults to <$XDG_CONFIG_HOME/vcsh/hooks-enabled>.
+
+* <$VCSH_BASE>:
+  The directory where repositories are checked out to.
+
+  Defaults to <$HOME>.
+
+
 ## HOOK SYSTEM
 
 `vcsh` provides a hook system. Hook scripts must be executable and should be
@@ -163,11 +216,12 @@ On Debian-based systems, this file can be found in </usr/share/doc/vcsh>.
 
 ## SECURITY CONSIDERATIONS
 
-`vcsh` allows you to execute arbitrary commands via `vcsh` run. For example,
+`vcsh` allows you to execute arbitrary commands via `vcsh run`. For example,
 adding a `sudo`(8) rule for `vcsh` would be pretty stupid.
 
-Additionally, vcsh will source, i.e. execute, <$XDG_CONFIG_HOME/vcsh/config>.
-You can put any and all commands into this config file and they will be executed.
+Additionally, vcsh will source, i.e. execute, all files listed in <CONFIG>.
+You can put any and all commands into these config files and they will be
+executed.
 
 ## BUGS
 
diff --git a/vcsh b/vcsh
index 9a4f4aae437597fad43cb959a9a0707faea7b99b..594368def1b45ab67e947ebc3ac5be7551d27b1e 100755
--- a/vcsh
+++ b/vcsh
@@ -29,31 +29,48 @@ while getopts  "c:dv" flag; do
 	elif [ "$1" = '-v' ];then
 		VCSH_VERBOSE=1
 	elif [ "$1" = '-c' ];then
-		# Source $OPTARG if it can be read and has an absolute or relative
-		# path or is in $PATH
-		if [ -r "$OPTARG" ]; then
-			. "$OPTARG"
-		else
-			fatal "Can not read configuration file '$OPTARG'" 1
-		fi
+		VCSH_OPTION_CONFIG=$OPTARG
 	fi
 done
 
+source_all() {
+	# Source file even if it's in $PWD and does not have any slashes in it
+	case "$1" in
+		*/*) . "$1";;
+		*)   . "$PWD/$1";;
+	esac;
+}
 
+
+# Read configuration and set defaults if anything's not set
 [ -n "$VCSH_DEBUG" ]                  && set -vx
 [ -z "$XDG_CONFIG_HOME" ]             && XDG_CONFIG_HOME="$HOME/.config"
+
+# Read configuration files if there are any
+[ -r "/etc/vcsh/config" ]             && . "/etc/vcsh/config"
 [ -r "$XDG_CONFIG_HOME/vcsh/config" ] && . "$XDG_CONFIG_HOME/vcsh/config"
+if [ -n "$VCSH_OPTION_CONFIG" ]; then
+	# Source $VCSH_OPTION_CONFIG if it can be read and is in $PWD of $PATH
+	if [ -r "$VCSH_OPTION_CONFIG" ]; then
+		source_all "$VCSH_OPTION_CONFIG"
+	else
+		fatal "Can not read configuration file '$VCSH_OPTION_CONFIG'" 1
+	fi
+fi
 [ -n "$VCSH_DEBUG" ]                  && set -vx
+
+# Read defaults
 [ -z "$VCSH_REPO_D" ]                 && VCSH_REPO_D="$XDG_CONFIG_HOME/vcsh/repo.d"
 [ -z "$VCSH_HOOK_D" ]                 && VCSH_HOOK_D="$XDG_CONFIG_HOME/vcsh/hooks-enabled"
 [ -z "$VCSH_BASE" ]                   && VCSH_BASE="$HOME"
 [ -z "$VCSH_GITIGNORE" ]              && VCSH_GITIGNORE='exact'
 
+
 help() {
 	echo "usage: $SELF <options> <command>
 
    options:
-   -c <file>            Source file prior to other configuration files
+   -c <file>            Source file
    -d                   Enable debug mode
    -d                   Enable verbose mode