diff --git a/index.js b/index.js
index 4586d02da..fa424109a 100644
--- a/index.js
+++ b/index.js
@@ -24,6 +24,7 @@ var SpanData = require('./lib/span-data.js');
 var common = require('@google/cloud-diagnostics-common');
 var semver = require('semver');
 var constants = require('./lib/constants.js');
+var path = require('path');
 
 /**
  * Phantom implementation of the trace agent. This allows API users to decouple
@@ -53,7 +54,7 @@ var initConfig = function(projectConfig) {
   util._extend(config, require('./config.js'));
   util._extend(config, projectConfig);
   if (process.env.hasOwnProperty('GCLOUD_TRACE_CONFIG')) {
-    util._extend(config, require(process.env.GCLOUD_TRACE_CONFIG));
+    util._extend(config, require(path.resolve(process.env.GCLOUD_TRACE_CONFIG)));
   }
   if (process.env.hasOwnProperty('GCLOUD_TRACE_LOGLEVEL')) {
     config.logLevel = process.env.GCLOUD_TRACE_LOGLEVEL;
diff --git a/test/fixtures/test-config.json b/test/fixtures/test-config.json
new file mode 100644
index 000000000..e53126994
--- /dev/null
+++ b/test/fixtures/test-config.json
@@ -0,0 +1,8 @@
+{
+  "logLevel": 4,
+
+  "stackTraceLimit": 1,
+
+  "flushDelaySeconds": 31
+}
+
diff --git a/test/standalone/test-config-json.js b/test/standalone/test-config-json.js
new file mode 100644
index 000000000..ae951339a
--- /dev/null
+++ b/test/standalone/test-config-json.js
@@ -0,0 +1,35 @@
+/**
+ * Copyright 2015 Google Inc. All Rights Reserved.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+'use strict';
+
+var path = require('path');
+var assert = require('assert');
+
+// Default configuration:
+// { logLevel: 1, stackTraceLimit: 0, flushDelaySeconds: 30, samplingRate: 10 };
+
+// Fixtures configuration:
+// { logLevel: 4, stackTraceLimit: 1 };
+process.env.GCLOUD_TRACE_CONFIG = path.join('test', 'fixtures', 'test-config.json');
+
+var agent = require('../..').start();
+
+describe('json config', function() {
+  it('should load trace config from json file', function() {
+    var config = agent.private_().config_;
+    assert.equal(config.logLevel, 4);
+  });
+});
diff --git a/test/standalone/test-config-priority.js b/test/standalone/test-config-priority.js
index fbad64dd4..d4ee9023f 100644
--- a/test/standalone/test-config-priority.js
+++ b/test/standalone/test-config-priority.js
@@ -22,11 +22,11 @@ var assert = require('assert');
 // { logLevel: 1, stackTraceLimit: 0, flushDelaySeconds: 30, samplingRate: 10 };
 
 // Fixtures configuration:
-// { logLevel: 2, stackTraceLimit: 1 };
+// { logLevel: 4, stackTraceLimit: 1 };
 process.env.GCLOUD_TRACE_CONFIG =
   path.join(__dirname, '..', 'fixtures', 'test-config.js');
 
-process.env.GCLOUD_TRACE_LOGLEVEL = 4;
+process.env.GCLOUD_TRACE_LOGLEVEL = 2;
 
 var agent = require('../..').start({logLevel: 3, stackTraceLimit: 2,
   flushDelaySeconds: 31});
@@ -34,7 +34,7 @@ var agent = require('../..').start({logLevel: 3, stackTraceLimit: 2,
 describe('should respect config load order', function() {
   it('should order Default -> start -> env config -> env specific', function() {
     var config = agent.private_().config_;
-    assert.equal(config.logLevel, 4);
+    assert.equal(config.logLevel, 2);
     assert.equal(config.stackTraceLimit, 1);
     assert.equal(config.flushDelaySeconds, 31);
     assert.equal(config.samplingRate, 10);
diff --git a/test/standalone/test-config-relative-path.js b/test/standalone/test-config-relative-path.js
new file mode 100644
index 000000000..15fe62c6a
--- /dev/null
+++ b/test/standalone/test-config-relative-path.js
@@ -0,0 +1,37 @@
+/**
+ * Copyright 2015 Google Inc. All Rights Reserved.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+'use strict';
+
+var path = require('path');
+var assert = require('assert');
+
+// Default configuration:
+// { logLevel: 1, stackTraceLimit: 0, flushDelaySeconds: 30, samplingRate: 10 };
+
+// Fixtures configuration:
+// { logLevel: 4, stackTraceLimit: 1 };
+process.env.GCLOUD_TRACE_CONFIG = path.join('fixtures', 'test-config.js');
+
+process.chdir('test');
+
+var agent = require('../..').start();
+
+describe('relative config', function() {
+  it('should load trace config from relative path', function() {
+    var config = agent.private_().config_;
+    assert.equal(config.logLevel, 4);
+  });
+});