diff --git a/index.js b/index.js
index 772a321..f135260 100644
--- a/index.js
+++ b/index.js
@@ -23,15 +23,49 @@ var addInstructionsToBrowserify = require('./lib/bundler');
  *  2. Configures Models from the `model-config.json` file in the application
  *    root directory.
  *
+ *  3. Configures the LoopBack Application object from the `config.json` file
+ *     in the application root directory. These properties can be accessed
+ *     using app.get('propname').
+ *
  * If the argument is an object, then it looks for `models`, `dataSources`,
- * and `appRootDir` properties of the object.
+ * 'config', modelRootDir, dsRootDir, appConfigRootDir and `appRootDir`
+ * properties of the object.
  * If the object has no `appRootDir` property then it sets the current working
  * directory as the application root directory.
+ * The execution environment, {env}, is establised from, in order,
+ *   'options.env',
+ *   Process.env.NODE_ENV,
+ *   the literal 'development'
+ *
  * Then it:
  *
- * 1. Creates DataSources from the `options.dataSources` object.
+ * 1. Creates DataSources from the `options.dataSources` object, if provided;
+ *    otherwise, it searches for the files 
+ *      'datasources.json',
+ *      'datasources.local.js' or 'datasources.local.json' (only one), 
+ *      'datasources.{env}.js' or 'datasources.{env}.json' (only one)
+ *    in the directory designated by 'options.dsRootDir', if present, or the
+ *    application root directory. It merges the data source definitions from
+ *    the files found.
  *
- * 2. Configures Models from the `options.models` object.
+ * 2. Creates Models from the `options.models` object, if provided;
+ *    otherwise, it searches for the files
+ *      'model-config.json',
+ *      'model-config.local.js' or 'model-config.local.json' (only one),
+ *      'model-config.{env}.js' or 'model-config.{env}.json' (only one)
+ *    in the directory designated by 'options.modelsRootDir', if present, or
+ *    the application root directory. It merges the model definitions from the
+ *    files found.
+ *
+ * 3. Configures the Application object from the `options.config` object,
+ *    if provided;
+ *    otherwise, it searches for the files
+ *      'config.json',
+ *      'config.local.js' or 'config.local.json' (only one),
+ *      'config.{env}.js' or 'config.{env}.json' (only one)
+ *    in the directory designated by 'options.appConfigRootDir', if present, or
+ *    the application root directory. It merges the properties from the files
+ *    found.
  *
  * In both cases, the function loads JavaScript files in the
  * `/boot` subdirectory of the application root directory with `require()`.
diff --git a/lib/compiler.js b/lib/compiler.js
index bca4a85..d5d870a 100644
--- a/lib/compiler.js
+++ b/lib/compiler.js
@@ -28,7 +28,9 @@ module.exports = function compile(options) {
   var appRootDir = options.appRootDir = options.appRootDir || process.cwd();
   var env = options.env || process.env.NODE_ENV || 'development';
 
-  var appConfig = options.config || ConfigLoader.loadAppConfig(appRootDir, env);
+  var appConfigRootDir = options.appConfigRootDir || appRootDir;
+  var appConfig = options.config ||
+    ConfigLoader.loadAppConfig(appConfigRootDir, env);
   assertIsValidConfig('app', appConfig);
 
   var modelsRootDir = options.modelsRootDir || appRootDir;
diff --git a/test/compiler.test.js b/test/compiler.test.js
index ee712d1..aa6182f 100644
--- a/test/compiler.test.js
+++ b/test/compiler.test.js
@@ -179,6 +179,23 @@ describe('compiler', function() {
       expect(appConfig).to.have.property('fromJs', true);
     });
 
+    it('supports `appConfigRootDir` option', function() {
+      appdir.createConfigFilesSync({port:3000});
+
+      var customDir = path.resolve(appdir.PATH, 'custom');
+      fs.mkdirsSync(customDir);
+      fs.renameSync(
+        path.resolve(appdir.PATH, 'config.json'),
+        path.resolve(customDir, 'config.json'));
+
+      var instructions = boot.compile({
+        appRootDir: appdir.PATH,
+        appConfigRootDir: path.resolve(appdir.PATH, 'custom')
+      });
+
+     expect(instructions.config).to.have.property('port');
+    });
+
     it('supports `dsRootDir` option', function() {
       appdir.createConfigFilesSync();