diff --git a/libmariadb/ma_default.c b/libmariadb/ma_default.c
index 064d1c03..17670e8d 100644
--- a/libmariadb/ma_default.c
+++ b/libmariadb/ma_default.c
@@ -39,6 +39,12 @@ static const char *ini_exts[]= {"cnf", 0};
 char **configuration_dirs= NULL;
 #define MAX_CONFIG_DIRS 6
 
+my_bool _mariadb_read_options(MYSQL *mysql,
+                              const char *config_dir,
+                              const char *config_file,
+                              const char *group,
+                              unsigned int recursion);
+
 static int add_cfg_dir(char **cfg_dirs, const char *directory)
 {
   int i;
@@ -139,7 +145,8 @@ static my_bool is_group(char *ptr, const char **groups)
 
 static my_bool _mariadb_read_options_from_file(MYSQL *mysql,
                                                const char *config_file,
-                                               const char *group)
+                                               const char *group,
+                                               unsigned int recursion)
 {
   uint line=0;
   my_bool read_values= 0, found_group= 0, is_escaped= 0, is_quoted= 0;
@@ -175,6 +182,23 @@ static my_bool _mariadb_read_options_from_file(MYSQL *mysql,
       is_quoted= !is_quoted;
       continue;
     }
+    /* CONC- 327: !includedir and !include */
+    if (*ptr == '!')
+    {
+      char *val;
+      ptr++;
+      if (!(val= strchr(ptr, ' ')))
+        continue;
+      *val++= 0;
+      end= strchr(val, 0);
+      for ( ; isspace(end[-1]) ; end--) ;	/* Remove end space */
+      *end= 0;
+      if (!strcmp(ptr, "includedir"))
+        _mariadb_read_options(mysql, (const char *)val, NULL, group, recursion + 1);
+      else if (!strcmp(ptr, "include"))
+        _mariadb_read_options(mysql, NULL, (const char *)val, group, recursion + 1);
+      continue;
+    }
     if (*ptr == '#' || *ptr == ';' || !*ptr)
       continue;
     is_escaped= (*ptr == '\\');
@@ -286,19 +310,37 @@ err:
 
 
 my_bool _mariadb_read_options(MYSQL *mysql,
+                              const char *config_dir,
                               const char *config_file,
-                              const char *group)
+                              const char *group,
+                              unsigned int recursion)
 {
   int i= 0,
       exts,
       errors= 0;
   char filename[FN_REFLEN + 1];
+  unsigned int recursion_stop= 64;
 #ifndef _WIN32
   char *env;
 #endif
 
-  if (config_file)
-    return _mariadb_read_options_from_file(mysql, config_file, group);
+  if (recursion >= recursion_stop)
+    return 1;
+
+  if (config_file && config_file[0])
+    return _mariadb_read_options_from_file(mysql, config_file, group, recursion);
+
+  if (config_dir && config_dir[0])
+  {
+    for (exts= 0; ini_exts[exts]; exts++)
+    {
+      snprintf(filename, FN_REFLEN,
+               "%s%cmy.%s", config_dir, FN_LIBCHAR, ini_exts[exts]);
+      if (!access(filename, R_OK))
+        errors+= _mariadb_read_options_from_file(mysql, filename, group, recursion);
+    }
+    return errors;
+  }
 
   for (i=0; i < MAX_CONFIG_DIRS && configuration_dirs[i]; i++)
   {
@@ -307,7 +349,7 @@ my_bool _mariadb_read_options(MYSQL *mysql,
       snprintf(filename, FN_REFLEN,
                "%s%cmy.%s", configuration_dirs[i], FN_LIBCHAR, ini_exts[exts]);
       if (!access(filename, R_OK))
-        errors+= _mariadb_read_options_from_file(mysql, filename, group);
+        errors+= _mariadb_read_options_from_file(mysql, filename, group, recursion);
     }
   }
 #ifndef _WIN32
@@ -319,7 +361,7 @@ my_bool _mariadb_read_options(MYSQL *mysql,
       snprintf(filename, FN_REFLEN,
                "%s%c.my.%s", env, FN_LIBCHAR, ini_exts[exts]);
       if (!access(filename, R_OK))
-        errors+= _mariadb_read_options_from_file(mysql, filename, group);
+        errors+= _mariadb_read_options_from_file(mysql, filename, group, recursion);
     }
   }
 #endif
diff --git a/libmariadb/mariadb_lib.c b/libmariadb/mariadb_lib.c
index f5227afb..000e18ef 100644
--- a/libmariadb/mariadb_lib.c
+++ b/libmariadb/mariadb_lib.c
@@ -106,8 +106,7 @@ extern int mthd_stmt_fetch_row(MYSQL_STMT *stmt, unsigned char **row);
 extern int mthd_stmt_fetch_to_bind(MYSQL_STMT *stmt, unsigned char *row);
 extern int mthd_stmt_read_all_rows(MYSQL_STMT *stmt);
 extern void mthd_stmt_flush_unbuffered(MYSQL_STMT *stmt);
-extern my_bool _mariadb_read_options(MYSQL *mysql, const char *config_file,
-                                     char *group);
+extern my_bool _mariadb_read_options(MYSQL *mysql, const char *dir, const char *config_file, char *group, unsigned int recursion);
 extern unsigned char *mysql_net_store_length(unsigned char *packet, size_t length);
 
 extern void
@@ -1210,10 +1209,10 @@ MYSQL *mthd_my_real_connect(MYSQL *mysql, const char *host, const char *user,
   /* use default options */
   if (mysql->options.my_cnf_file || mysql->options.my_cnf_group)
   {
-    _mariadb_read_options(mysql,
+    _mariadb_read_options(mysql, NULL,
 			  (mysql->options.my_cnf_file ?
 			   mysql->options.my_cnf_file : NULL),
-			   mysql->options.my_cnf_group);
+			   mysql->options.my_cnf_group, 0);
     free(mysql->options.my_cnf_file);
     free(mysql->options.my_cnf_group);
     mysql->options.my_cnf_file=mysql->options.my_cnf_group=0;
diff --git a/unittest/libmariadb/connection.c b/unittest/libmariadb/connection.c
index 8f1daa92..c24c7254 100644
--- a/unittest/libmariadb/connection.c
+++ b/unittest/libmariadb/connection.c
@@ -1026,6 +1026,9 @@ static int test_reset(MYSQL *mysql)
   if (mysql_get_server_version(mysql) < 100200)
     return SKIP;
 
+  rc= mysql_query(mysql, "DROP TABLE IF EXISTS t1");
+  check_mysql_rc(rc, mysql);
+
   rc= mysql_query(mysql, "CREATE TABLE t1 (a int)");
   check_mysql_rc(rc, mysql);
 
@@ -1415,10 +1418,82 @@ static int test_conc317(MYSQL *unused __attribute__((unused)))
   mysql_close(mysql);
   return OK;
 }
+
+static int test_conc327(MYSQL *unused __attribute__((unused)))
+{
+  MYSQL *mysql;
+  my_bool reconnect = 0;
+  FILE *fp1= NULL, *fp2= NULL;
+  const char *env= getenv("MYSQL_TMP_DIR");
+  char cnf_file1[FN_REFLEN + 1];
+  char cnf_file2[FN_REFLEN + 1];
+
+  if (travis_test)
+    return SKIP;
+
+  if (!env)
+    env= "/tmp";
+
+  setenv("HOME", env, 1);
+
+  snprintf(cnf_file1, FN_REFLEN, "%s%c.my.cnf", env, FN_LIBCHAR);
+  snprintf(cnf_file2, FN_REFLEN, "%s%c.my.tmp", env, FN_LIBCHAR);
+
+  FAIL_IF(!access(cnf_file1, R_OK), "access");
+
+  fp1= fopen(cnf_file1, "w");
+  fp2= fopen(cnf_file2, "w");
+  FAIL_IF(!fp1 || !fp2, "fopen failed");
+
+  fprintf(fp1, "!include %s\n", cnf_file2);
+  
+  fprintf(fp2, "[client]\ndefault-character-set = latin2\nreconnect= 1\n");
+  fclose(fp1);
+  fclose(fp2);
+
+  mysql= mysql_init(NULL);
+  mysql_options(mysql, MYSQL_READ_DEFAULT_GROUP, "");
+  my_test_connect(mysql, hostname, username, password,
+                  schema, 0, socketname, 0);
+
+  remove(cnf_file1);
+  remove(cnf_file2);
+
+  FAIL_IF(strcmp(mysql_character_set_name(mysql), "latin2"), "expected charset latin2");
+  mysql_get_optionv(mysql, MYSQL_OPT_RECONNECT, &reconnect);
+  FAIL_IF(reconnect != 1, "expected reconnect=1");
+  mysql_close(mysql);
+
+  snprintf(cnf_file1, FN_REFLEN, "%s%cmy.cnf", env, FN_LIBCHAR);
+  fp1= fopen(cnf_file1, "w");
+  fp2= fopen(cnf_file2, "w");
+  FAIL_IF(!fp1 || !fp2, "fopen failed");
+
+  fprintf(fp2, "!includedir %s\n", env);
+  
+  fprintf(fp1, "[client]\ndefault-character-set = latin2\nreconnect= 1\n");
+  fclose(fp1);
+  fclose(fp2);
+  mysql= mysql_init(NULL);
+  mysql_options(mysql, MYSQL_READ_DEFAULT_FILE, cnf_file2);
+  my_test_connect(mysql, hostname, username, password,
+                  schema, 0, socketname, 0);
+
+  remove(cnf_file1);
+  remove(cnf_file2);
+
+  FAIL_IF(strcmp(mysql_character_set_name(mysql), "latin2"), "expected charset latin2");
+  mysql_get_optionv(mysql, MYSQL_OPT_RECONNECT, &reconnect);
+  FAIL_IF(reconnect != 1, "expected reconnect=1");
+  mysql_close(mysql);
+
+  return OK;
+}
 #endif
 
 struct my_tests_st my_tests[] = {
 #ifndef WIN32
+  {"test_conc327", test_conc327, TEST_CONNECTION_DEFAULT, 0, NULL, NULL},
   {"test_conc317", test_conc317, TEST_CONNECTION_DEFAULT, 0, NULL, NULL},
 #endif
   {"test_conc315", test_conc315, TEST_CONNECTION_DEFAULT, 0, NULL,  NULL},