diff --git a/platform/c64/demo/c64_hello.oph b/platform/c64/demo/c64_hello.oph
index 4dd0f55..0b43fd7 100644
--- a/platform/c64/demo/c64_hello.oph
+++ b/platform/c64/demo/c64_hello.oph
@@ -1,6 +1,8 @@
 .include "../c64_0.oph"
 .include "../c64kernal.oph"
 
+.outfile "hello.prg"
+
 	ldy	#$00
 *	lda	text, y
 	beq	+
diff --git a/platform/nes/demo/hello_ines.oph b/platform/nes/demo/hello_ines.oph
index dfb4552..85c83de 100644
--- a/platform/nes/demo/hello_ines.oph
+++ b/platform/nes/demo/hello_ines.oph
@@ -1,5 +1,7 @@
 ; iNES header
 .byte $4e,$45,$53,$1a,$01,$01,$00,$00,$00,$00,$00,$00,$00,$00,$00,$00
 
+.outfile "hello.nes"
+
 .include "hello_prg.oph"
 .include "hello_chr.oph"
diff --git a/platform/nes/demo/hello_unif.oph b/platform/nes/demo/hello_unif.oph
index 11894b9..ca34e20 100644
--- a/platform/nes/demo/hello_unif.oph
+++ b/platform/nes/demo/hello_unif.oph
@@ -1,3 +1,4 @@
+.outfile "hello.unf"
 .byte "UNIF"
 .dword 7
 .advance $20
diff --git a/platform/stella/demo/hi_stella.oph b/platform/stella/demo/hi_stella.oph
index 34a229e..1d77aab 100644
--- a/platform/stella/demo/hi_stella.oph
+++ b/platform/stella/demo/hi_stella.oph
@@ -1,4 +1,5 @@
 .require "../stella.oph"
+.outfile "hi_stella.bin"
 
 .data
 .org	$0080
diff --git a/src/Ophis/CorePragmas.py b/src/Ophis/CorePragmas.py
index 7087785..215ade5 100644
--- a/src/Ophis/CorePragmas.py
+++ b/src/Ophis/CorePragmas.py
@@ -6,6 +6,7 @@
 # You may use, modify, and distribute this file under the MIT
 # license: See README for details.
 
+import Ophis.CmdLine
 import Ophis.IR as IR
 import Ophis.Frontend as FE
 import Ophis.Errors as Err
@@ -21,6 +22,14 @@ def reset():
     currentcharmap = basecharmap
 
 
+def pragmaOutfile(ppt, line, result):
+    "Sets the output file if it hasn't already been set"
+    filename = line.expect("STRING").value
+    line.expect("EOL")
+    if type(filename) == str and Ophis.CmdLine.outfile is None:
+        Ophis.CmdLine.outfile = filename
+
+
 def pragmaInclude(ppt, line, result):
     "Includes a source file"
     filename = line.expect("STRING").value
@@ -46,7 +55,7 @@ def pragmaIncbin(ppt, line, result):
     line.expect("EOL")
     if type(filename) == str:
         try:
-            f = file(filename, "rb")
+            f = file(os.path.join(FE.context_directory, filename), "rb")
             bytes = f.read()
             f.close()
         except IOError:
@@ -82,7 +91,7 @@ def pragmaCharmapbin(ppt, line, result):
     line.expect("EOL")
     if type(filename) == str:
         try:
-            f = file(filename, "rb")
+            f = file(os.path.join(FE.context_directory, filename), "rb")
             bytes = f.read()
             f.close()
         except IOError:
diff --git a/src/Ophis/Frontend.py b/src/Ophis/Frontend.py
index 8bade2e..695e800 100644
--- a/src/Ophis/Frontend.py
+++ b/src/Ophis/Frontend.py
@@ -8,6 +8,7 @@ import Ophis.IR as IR
 import Ophis.CmdLine as Cmd
 import sys
 import os
+import os.path
 
 # Copyright 2002-2012 Michael C. Martin and additional contributors.
 # You may use, modify, and distribute this file under the MIT
@@ -346,9 +347,14 @@ def parse_line(ppt, lexemelist):
     return IR.SequenceNode(ppt, result)
 
 
+context_directory = None
+
+
 def parse_file(ppt, filename):
     "Loads an Ophis source file, and returns an IR list."
+    global context_directory
     Err.currentpoint = ppt
+    old_context = context_directory
     if Cmd.print_loaded_files:
         if filename != '-':
             print>>sys.stderr, "Loading " + filename
@@ -356,18 +362,24 @@ def parse_file(ppt, filename):
             print>>sys.stderr, "Loading from standard input"
     try:
         if filename != '-':
+            if context_directory is not None:
+                filename = os.path.join(context_directory, filename)
             f = file(filename)
             linelist = f.readlines()
             f.close()
+            context_directory = os.path.abspath(os.path.dirname(filename))
         else:
+            context_directory = os.getcwd()
             linelist = sys.stdin.readlines()
         pptlist = ["%s:%d" % (filename, i + 1) for i in range(len(linelist))]
         lexlist = map(lex, pptlist, linelist)
         IRlist = map(parse_line, pptlist, lexlist)
         IRlist = [node for node in IRlist if node is not IR.NullNode]
+        context_directory = old_context
         return IR.SequenceNode(ppt, IRlist)
     except IOError:
         Err.log("Could not read " + filename)
+        context_directory = old_context
         return IR.NullNode
 
 
diff --git a/src/Ophis/Main.py b/src/Ophis/Main.py
index 2513d23..20d401b 100644
--- a/src/Ophis/Main.py
+++ b/src/Ophis/Main.py
@@ -18,10 +18,10 @@ import Ophis.CmdLine
 import Ophis.Opcodes
 
 
-def run_all(infiles, outfile):
+def run_all():
     "Transforms the source infiles to a binary outfile."
     Err.count = 0
-    z = Ophis.Frontend.parse(infiles)
+    z = Ophis.Frontend.parse(Ophis.CmdLine.infiles)
     env = Ophis.Environment.Environment()
 
     m = Ophis.Passes.ExpandMacros()
@@ -55,6 +55,7 @@ def run_all(infiles, outfile):
 
     if Err.count == 0:
         try:
+            outfile = Ophis.CmdLine.outfile
             if outfile == '-':
                 output = sys.stdout
             elif outfile is None:
@@ -81,7 +82,7 @@ def run_ophis(args):
         Ophis.Opcodes.opcodes.update(Ophis.Opcodes.c02extensions)
 
     Ophis.CorePragmas.reset()
-    run_all(Ophis.CmdLine.infiles, Ophis.CmdLine.outfile)
+    run_all()
 
 
 if __name__ == '__main__':
diff --git a/tests/simpletest.sh b/tests/simpletest.sh
index 8f36e1c..9277403 100755
--- a/tests/simpletest.sh
+++ b/tests/simpletest.sh
@@ -1,19 +1,19 @@
 #!/bin/bash
 
-../bin/ophis -q --no-warn testbase.oph a.bin
-diff -q testbase.bin a.bin
-../bin/ophis -q --no-warn testdata.oph a.bin
-diff -q testdata.bin a.bin
-../bin/ophis -q --no-warn longbranch_ref.oph a_ref.bin
+../bin/ophis -q --no-warn testbase.oph
+diff -q testbase.bin ophis.bin
+../bin/ophis -q --no-warn testdata.oph
+diff -q testdata.bin ophis.bin
+../bin/ophis -q --no-warn longbranch_ref.oph -o a_ref.bin
 diff -q longbranch.bin a_ref.bin
-../bin/ophis -q --no-warn longbranch.oph a.bin
-diff -q longbranch.bin a.bin
-../bin/ophis -cq --no-warn test65c02.oph a.bin
-diff -q test65c02.bin a.bin
-../bin/ophis -uq --no-warn test6510.oph a.bin
-diff -q test6510.bin a.bin
-../bin/ophis -cq --no-warn branch_c02_ref.oph a_ref.bin
+../bin/ophis -q --no-warn longbranch.oph
+diff -q longbranch.bin ophis.bin
+../bin/ophis -cq --no-warn test65c02.oph
+diff -q test65c02.bin ophis.bin
+../bin/ophis -uq --no-warn test6510.oph
+diff -q test6510.bin ophis.bin
+../bin/ophis -cq --no-warn branch_c02_ref.oph -o a_ref.bin
 diff -q branch_c02.bin a_ref.bin
-../bin/ophis -cq --no-warn branch_c02.oph a.bin
-diff -q branch_c02.bin a_ref.bin
-rm -f a_ref.bin a.bin
+../bin/ophis -cq --no-warn branch_c02.oph
+diff -q branch_c02.bin ophis.bin
+rm -f a_ref.bin ophis.bin