diff --git a/packages/config-loader/src/loader.test.ts b/packages/config-loader/src/loader.test.ts
new file mode 100644
index 0000000000..66894c7dec
--- /dev/null
+++ b/packages/config-loader/src/loader.test.ts
@@ -0,0 +1,140 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * 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.
+ */
+
+import { loadConfig } from './loader';
+
+jest.mock('fs-extra', () => {
+  const mockFiles: { [path in string]: string } = {
+    '/root/app-config.yaml': `
+      app:
+        title: Example App
+        sessionKey:
+          $secret:
+            file: secrets/session-key.txt
+    `,
+    '/root/app-config.development.yaml': `
+      app:
+        sessionKey: development-key
+    `,
+    '/root/secrets/session-key.txt': 'abc123',
+  };
+
+  return {
+    async readFile(path: string) {
+      if (path in mockFiles) {
+        return mockFiles[path];
+      }
+      throw new Error(`File not found, ${path}`);
+    },
+    async pathExists(path: string) {
+      return path in mockFiles;
+    },
+  };
+});
+
+describe('loadConfig', () => {
+  it('loads config without secrets', async () => {
+    await expect(
+      loadConfig({
+        rootPaths: ['/root'],
+        env: 'production',
+        shouldReadSecrets: false,
+      }),
+    ).resolves.toEqual([
+      {
+        context: 'app-config.yaml',
+        data: {
+          app: {
+            title: 'Example App',
+          },
+        },
+      },
+    ]);
+  });
+
+  it('loads config with secrets', async () => {
+    await expect(
+      loadConfig({
+        rootPaths: ['/root'],
+        env: 'production',
+        shouldReadSecrets: true,
+      }),
+    ).resolves.toEqual([
+      {
+        context: 'app-config.yaml',
+        data: {
+          app: {
+            title: 'Example App',
+            sessionKey: 'abc123',
+          },
+        },
+      },
+    ]);
+  });
+
+  it('loads development config without secrets', async () => {
+    await expect(
+      loadConfig({
+        rootPaths: ['/root'],
+        env: 'development',
+        shouldReadSecrets: false,
+      }),
+    ).resolves.toEqual([
+      {
+        context: 'app-config.yaml',
+        data: {
+          app: {
+            title: 'Example App',
+          },
+        },
+      },
+      {
+        context: 'app-config.development.yaml',
+        data: {
+          app: {},
+        },
+      },
+    ]);
+  });
+
+  it('loads development config with secrets', async () => {
+    await expect(
+      loadConfig({
+        rootPaths: ['/root'],
+        env: 'development',
+        shouldReadSecrets: true,
+      }),
+    ).resolves.toEqual([
+      {
+        context: 'app-config.yaml',
+        data: {
+          app: {
+            title: 'Example App',
+            sessionKey: 'abc123',
+          },
+        },
+      },
+      {
+        context: 'app-config.development.yaml',
+        data: {
+          app: {
+            sessionKey: 'development-key',
+          },
+        },
+      },
+    ]);
+  });
+});