diff --git a/.gitignore b/.gitignore
index 9f431dd..8308954 100644
--- a/.gitignore
+++ b/.gitignore
@@ -35,3 +35,6 @@ nosetests.xml
 
 .pytest_cache
 dist/
+env/
+*.iml
+.python-version
diff --git a/README.md b/README.md
index 13579e6..e38ccbb 100644
--- a/README.md
+++ b/README.md
@@ -17,15 +17,20 @@ Usage: jinja2 [options] <input template> <input data>
 Options:
   --version             show program's version number and exit
   -h, --help            show this help message and exit
-  --format=FORMAT       format of input variables: auto, ini, json,
+  --format=FORMAT       format of input variables: auto, env, ini, json,
                         querystring, yaml, yml
   -e EXTENSIONS, --extension=EXTENSIONS
                         extra jinja2 extensions to load
+  -I INCLUDES, --includes=INCLUDES
+                        extra jinja2 template directory to search for
+                        (included) templates
   -D key=value          Define template variable in the form of key=value
   -s SECTION, --section=SECTION
                         Use only this section from the configuration
   --strict              Disallow undefined variables to be used within the
                         template
+  -o FILE, --outfile=FILE
+                        File to use for output. Default is stdout.
 ```
 
 ## Optional YAML support
diff --git a/jinja2cli/cli.py b/jinja2cli/cli.py
index 95a2b68..b84abf6 100644
--- a/jinja2cli/cli.py
+++ b/jinja2cli/cli.py
@@ -142,7 +142,7 @@ def _load_querystring():
         import urllib.parse as urlparse
 
     def _parse_qs(data):
-        """ Extend urlparse to allow objects in dot syntax.
+        """Extend urlparse to allow objects in dot syntax.
 
         >>> _parse_qs('user.first_name=Matt&user.last_name=Robenolt')
         {'user': {'first_name': 'Matt', 'last_name': 'Robenolt'}}
@@ -212,11 +212,13 @@ def _parse_env(data):
 }
 
 
-def render(template_path, data, extensions, strict=False):
+def render(template_path, data, extensions, strict=False, includes=None):
+    includes = [] if includes is None else includes
+
     from jinja2 import Environment, FileSystemLoader, StrictUndefined
 
     env = Environment(
-        loader=FileSystemLoader(os.path.dirname(template_path)),
+        loader=FileSystemLoader([os.path.dirname(template_path)] + includes),
         extensions=extensions,
         keep_trailing_newline=True,
     )
@@ -311,7 +313,9 @@ def cli(opts, args):
 
         out = codecs.getwriter("utf8")(out)
 
-    out.write(render(template_path, data, extensions, opts.strict))
+    out.write(
+        render(template_path, data, extensions, opts.strict, includes=opts.includes)
+    )
     out.flush()
     return 0
 
@@ -378,6 +382,14 @@ def main():
         action="append",
         default=["do", "with_", "autoescape", "loopcontrols"],
     )
+    parser.add_option(
+        "-I",
+        "--includes",
+        help="extra jinja2 template directory to search for (included) templates",
+        dest="includes",
+        action="append",
+        default=[],
+    )
     parser.add_option(
         "-D",
         help="Define template variable in the form of key=value",
diff --git a/tests/files/maindir_template.j2 b/tests/files/maindir_template.j2
new file mode 100644
index 0000000..7917609
--- /dev/null
+++ b/tests/files/maindir_template.j2
@@ -0,0 +1 @@
+{% include 'template.j2' %}
diff --git a/tests/files/subdir/subdir_template.j2 b/tests/files/subdir/subdir_template.j2
new file mode 100644
index 0000000..7917609
--- /dev/null
+++ b/tests/files/subdir/subdir_template.j2
@@ -0,0 +1 @@
+{% include 'template.j2' %}
diff --git a/tests/test_jinja2cli.py b/tests/test_jinja2cli.py
index 181a8bd..0b44167 100644
--- a/tests/test_jinja2cli.py
+++ b/tests/test_jinja2cli.py
@@ -1,4 +1,6 @@
 import os
+import json
+import subprocess
 
 from jinja2cli import cli
 
@@ -23,3 +25,60 @@ def test_absolute_path():
     output = cli.render(path, {"title": title}, [])
     assert output == title
     assert type(output) == cli.text_type
+
+
+def test_cmd_succeeds():
+    template = "files/maindir_template.j2"
+    title = "Greatest Title 1"
+    ctx = json.dumps({"title": title})
+    echo_proc = subprocess.Popen(["echo", ctx], stdout=subprocess.PIPE, shell=False)
+    jinja_proc = subprocess.Popen(
+        ["jinja2", template],
+        stdin=echo_proc.stdout,
+        stdout=subprocess.PIPE,
+        stderr=subprocess.PIPE,
+        shell=False,
+    )
+    assert jinja_proc.wait() == 0
+    assert jinja_proc.stderr.readlines() == []
+    assert jinja_proc.stdout.readlines() == [(title + "\n").encode()]
+
+
+def test_cmd_fails_without_includes_flag():
+    template = "files/subdir/subdir_template.j2"
+    title = "Greatest Title 2"
+    context = json.dumps({"title": title})
+    echo_args = ["echo", context]
+    jinja_args = ["jinja2", template]
+    echo_proc = subprocess.Popen(echo_args, stdout=subprocess.PIPE, shell=False)
+    jinja_proc = subprocess.Popen(
+        jinja_args,
+        stdin=echo_proc.stdout,
+        stdout=subprocess.PIPE,
+        stderr=subprocess.PIPE,
+        shell=False,
+    )
+    assert jinja_proc.wait() == 1
+    jinja_err = jinja_proc.stderr.readlines()
+    assert "jinja2.exceptions.TemplateNotFound" in jinja_err[-1].decode("utf-8")
+    assert jinja_proc.stdout.readlines() == []
+
+
+def test_cmd_succeeds_with_includes_flag():
+    template = "files/subdir/subdir_template.j2"
+    title = "Greatest Title 3"
+    ctx = json.dumps({"title": title})
+    template_root = "files"
+    echo_args = ["echo", ctx]
+    jinja_args = ["jinja2", template, "--includes", template_root]
+    echo_proc = subprocess.Popen(echo_args, stdout=subprocess.PIPE, shell=False)
+    jinja_proc = subprocess.Popen(
+        jinja_args,
+        stdin=echo_proc.stdout,
+        stdout=subprocess.PIPE,
+        stderr=subprocess.PIPE,
+        shell=False,
+    )
+    assert jinja_proc.wait() == 0
+    assert jinja_proc.stderr.readlines() == []
+    assert jinja_proc.stdout.readlines() == [(title + "\n").encode()]