diff --git a/README.md b/README.md
index 2873e44e8..00a1c870a 100644
--- a/README.md
+++ b/README.md
@@ -226,7 +226,9 @@ improve runtime performance.
 
 ## Configuring `nyc`
 
-Any configuration options that can be set via the command line can also be specified in the `nyc` stanza of your package.json (these will not affect `nyc` subcommands):
+Any configuration options that can be set via the command line can also be specified in the `nyc` stanza of your package.json, or within a `.nycrc` file:
+
+**package.json:**
 
 ```json
 {
@@ -260,6 +262,20 @@ Any configuration options that can be set via the command line can also be speci
 }
 ```
 
+**.nycrc:**
+
+```json
+{
+  "reporter": [
+    "lcov",
+    "text-summary"
+  ],
+  "require": [
+    "./test/helpers/some-helper.js"
+  ]
+}
+```
+
 ## Instrumenting source files
 
 nyc's `instrument` command can be used to instrument
diff --git a/lib/config-util.js b/lib/config-util.js
index b137d599f..f1e67522b 100644
--- a/lib/config-util.js
+++ b/lib/config-util.js
@@ -1,6 +1,7 @@
 var arrify = require('arrify')
+var fs = require('fs')
 var path = require('path')
-var pkgUp = require('pkg-up')
+var findUp = require('find-up')
 var testExclude = require('test-exclude')
 var Yargs = require('yargs/yargs')
 
@@ -12,7 +13,15 @@ var Config = {}
 // * .nycrc (coming soon)
 Config.loadConfig = function (argv, cwd) {
   cwd = cwd || process.env.NYC_CWD || process.cwd()
-  var pkgPath = pkgUp.sync(cwd)
+  var pkgPath = findUp.sync('package.json', {cwd: cwd})
+  var rcPath = findUp.sync('.nycrc', {cwd: cwd})
+  var rcConfig = null
+
+  if (rcPath) {
+    rcConfig = JSON.parse(
+      fs.readFileSync(rcPath, 'utf-8')
+    )
+  }
 
   if (pkgPath) {
     cwd = path.dirname(pkgPath)
@@ -22,7 +31,8 @@ Config.loadConfig = function (argv, cwd) {
     .default({
       cwd: cwd
     })
-    .parse(argv || [])
+  if (rcConfig) config.config(rcConfig)
+  config = config.parse(argv || [])
 
   // post-hoc, we convert several of the
   // configuration settings to arrays, providing
diff --git a/package.json b/package.json
index c14dbc3e1..519a5bd25 100644
--- a/package.json
+++ b/package.json
@@ -90,7 +90,6 @@
     "md5-hex": "^1.2.0",
     "micromatch": "^2.3.11",
     "mkdirp": "^0.5.0",
-    "pkg-up": "^1.0.0",
     "resolve-from": "^2.0.0",
     "rimraf": "^2.5.4",
     "signal-exit": "^3.0.1",
@@ -143,7 +142,6 @@
     "md5-hex",
     "micromatch",
     "mkdirp",
-    "pkg-up",
     "resolve-from",
     "rimraf",
     "signal-exit",
@@ -152,4 +150,4 @@
     "yargs",
     "yargs-parser"
   ]
-}
+}
\ No newline at end of file
diff --git a/test/fixtures/cli/nycrc/.nycrc b/test/fixtures/cli/nycrc/.nycrc
new file mode 100644
index 000000000..b5b5a0a32
--- /dev/null
+++ b/test/fixtures/cli/nycrc/.nycrc
@@ -0,0 +1,3 @@
+{
+  "exclude": ["ignore.js"]
+}
diff --git a/test/fixtures/cli/nycrc/ignore.js b/test/fixtures/cli/nycrc/ignore.js
new file mode 100644
index 000000000..2ace002b5
--- /dev/null
+++ b/test/fixtures/cli/nycrc/ignore.js
@@ -0,0 +1 @@
+var i = 2
diff --git a/test/fixtures/cli/nycrc/index.js b/test/fixtures/cli/nycrc/index.js
new file mode 100644
index 000000000..8f4dfee22
--- /dev/null
+++ b/test/fixtures/cli/nycrc/index.js
@@ -0,0 +1,11 @@
+require('./ignore')
+
+var a = 0
+
+a++
+
+if (a === 0) {
+  a++;
+  a--;
+  a++;
+}
diff --git a/test/fixtures/cli/nycrc/package.json b/test/fixtures/cli/nycrc/package.json
new file mode 100644
index 000000000..d73c43154
--- /dev/null
+++ b/test/fixtures/cli/nycrc/package.json
@@ -0,0 +1,5 @@
+{
+  "nyc": {
+    "reporter": ["text-lcov"]
+  }
+}
diff --git a/test/src/nyc-bin.js b/test/src/nyc-bin.js
index 4f998954e..f498ccbde 100644
--- a/test/src/nyc-bin.js
+++ b/test/src/nyc-bin.js
@@ -284,6 +284,52 @@ describe('the nyc cli', function () {
         done()
       })
     })
+
+    describe('.nycrc', function () {
+      var cwd = path.resolve(fixturesCLI, './nycrc')
+
+      it('loads configuration from package.json and .nycrc', function (done) {
+        var args = [bin, process.execPath, './index.js']
+
+        var proc = spawn(process.execPath, args, {
+          cwd: cwd,
+          env: env
+        })
+
+        var stdout = ''
+        proc.stdout.on('data', function (chunk) {
+          stdout += chunk
+        })
+
+        proc.on('close', function (code) {
+          code.should.equal(0)
+          stdout.should.match(/SF:.*index\.js/)
+          stdout.should.not.match(/SF:.*ignore\.js/)
+          done()
+        })
+      })
+
+      it('allows .nycrc configuration to be overridden with command line args', function (done) {
+        var args = [bin, '--exclude=foo.js', process.execPath, './index.js']
+
+        var proc = spawn(process.execPath, args, {
+          cwd: cwd,
+          env: env
+        })
+
+        var stdout = ''
+        proc.stdout.on('data', function (chunk) {
+          stdout += chunk
+        })
+
+        proc.on('close', function (code) {
+          code.should.equal(0)
+          stdout.should.match(/SF:.*index\.js/)
+          stdout.should.match(/SF:.*ignore\.js/)
+          done()
+        })
+      })
+    })
   })
 
   it('setting instrument to "false" sets noop instrumenter', function (done) {