diff --git a/docs/configuration.rst b/docs/configuration.rst
index 74e9362bcf6..b1d9faf09ff 100644
--- a/docs/configuration.rst
+++ b/docs/configuration.rst
@@ -19,6 +19,13 @@ platforms.
 
 You can set a custom path location for the config file using the environment variable ``PIP_CONFIG_FILE``.
 
+In a virtual environment, an additional config file will be read from the base
+directory of the virtualenv (``sys.prefix`` as reported by Python). The base
+name of the file is the same as the user configuration file (:file:`pip.conf`
+on Unix and OSX, :file:`pip.ini` on Windows). Values in the virtualenv-specific
+configuration file take precedence over those in the user's configuration file
+(whether from the user home or specified via ``PIP_CONFIG_FILE``).
+
 The names of the settings are derived from the long command line option, e.g.
 if you want to use a different package index (``--index-url``) and set the
 HTTP timeout (``--default-timeout``) to 60 seconds your config file would
diff --git a/pip/baseparser.py b/pip/baseparser.py
index ce4016033fc..42aca8f5fd7 100644
--- a/pip/baseparser.py
+++ b/pip/baseparser.py
@@ -7,7 +7,7 @@
 import textwrap
 from distutils.util import strtobool
 from pip.backwardcompat import ConfigParser, string_types
-from pip.locations import default_config_file
+from pip.locations import default_config_file, default_config_basename, running_under_virtualenv
 from pip.util import get_terminal_size, get_prog
 
 
@@ -136,8 +136,14 @@ def __init__(self, *args, **kwargs):
     def get_config_files(self):
         config_file = os.environ.get('PIP_CONFIG_FILE', False)
         if config_file and os.path.exists(config_file):
-            return [config_file]
-        return [default_config_file]
+            files = [config_file]
+        else:
+            files = [default_config_file]
+        if running_under_virtualenv():
+            venv_config_file = os.path.join(sys.prefix, default_config_basename)
+            if os.path.exists(venv_config_file):
+                files.append(venv_config_file)
+        return files
 
     def check_default(self, option, key, val):
         try:
diff --git a/pip/locations.py b/pip/locations.py
index 00cf27cb73a..85e250eb342 100644
--- a/pip/locations.py
+++ b/pip/locations.py
@@ -112,12 +112,14 @@ def _get_build_prefix():
     if not os.path.exists(bin_py):
         bin_py = os.path.join(sys.prefix, 'bin')
     default_storage_dir = os.path.join(user_dir, 'pip')
-    default_config_file = os.path.join(default_storage_dir, 'pip.ini')
+    default_config_basename = 'pip.ini'
+    default_config_file = os.path.join(default_storage_dir, default_config_basename)
     default_log_file = os.path.join(default_storage_dir, 'pip.log')
 else:
     bin_py = os.path.join(sys.prefix, 'bin')
     default_storage_dir = os.path.join(user_dir, '.pip')
-    default_config_file = os.path.join(default_storage_dir, 'pip.conf')
+    default_config_basename = 'pip.conf'
+    default_config_file = os.path.join(default_storage_dir, default_config_basename)
     default_log_file = os.path.join(default_storage_dir, 'pip.log')
 
     # Forcing to use /usr/local/bin for standard Mac OS X framework installs
diff --git a/tests/functional/test_install_config.py b/tests/functional/test_install_config.py
index 7a896d35ce4..ca6c360cb4e 100644
--- a/tests/functional/test_install_config.py
+++ b/tests/functional/test_install_config.py
@@ -138,3 +138,20 @@ def test_log_file_no_directory():
     fp.close()
     assert os.path.exists(fp.name)
     os.remove(fp.name)
+
+
+def test_options_from_venv_config(script, virtualenv):
+    """
+    Test if ConfigOptionParser reads a virtualenv-local config file
+
+    """
+    from pip.locations import default_config_basename
+    conf = "[global]\nno-index = true"
+    ini = virtualenv.location / default_config_basename
+    with open(ini, 'w') as f:
+        f.write(conf)
+    result = script.pip('install', '-vvv', 'INITools', expect_error=True)
+    assert "Ignoring indexes:" in result.stdout, str(result)
+    assert "DistributionNotFound: No distributions at all found for INITools" in result.stdout
+
+
diff --git a/tests/unit/test_options.py b/tests/unit/test_options.py
index 56be3ae771a..d6f864fb52d 100644
--- a/tests/unit/test_options.py
+++ b/tests/unit/test_options.py
@@ -226,3 +226,17 @@ def test_cert(self):
         options1, args1 = main(['--cert', 'path', 'fake'])
         options2, args2 = main(['fake', '--cert', 'path'])
         assert options1.cert == options2.cert == 'path'
+
+
+class TestOptionsConfigFiles(object):
+
+    def test_venv_config_file_found(self, monkeypatch):
+        # We only want a dummy object to call the get_config_files method
+        monkeypatch.setattr(pip.baseparser.ConfigOptionParser, '__init__', lambda self: None)
+
+        # If we are running in a virtualenv and all files appear to exist,
+        # we should see two config files.
+        monkeypatch.setattr(pip.baseparser, 'running_under_virtualenv', lambda: True)
+        monkeypatch.setattr(os.path, 'exists', lambda filename: True)
+        cp = pip.baseparser.ConfigOptionParser()
+        assert len(cp.get_config_files()) == 2