diff --git a/local-cli/server/runServer.js b/local-cli/server/runServer.js
index 1541e0e5cff..90e92e70dd7 100644
--- a/local-cli/server/runServer.js
+++ b/local-cli/server/runServer.js
@@ -158,6 +158,7 @@ function getPackagerServer(args, config) {
     assetExts: defaultAssetExts.concat(args.assetExts),
     blacklistRE: config.getBlacklistRE(),
     cacheVersion: '3',
+    enableBabelRCLookup: config.getEnableBabelRCLookup(),
     extraNodeModules: config.extraNodeModules,
     getTransformOptions: config.getTransformOptions,
     hasteImpl: config.hasteImpl,
diff --git a/local-cli/util/Config.js b/local-cli/util/Config.js
index 3085969f86f..24d618a4a45 100644
--- a/local-cli/util/Config.js
+++ b/local-cli/util/Config.js
@@ -49,6 +49,13 @@ export type ConfigT = {
    */
   getBlacklistRE(): RegExp,
 
+  /**
+   * Specify whether or not to enable Babel's behavior for looking up .babelrc
+   * files. If false, only the .babelrc file (if one exists) in the main project
+   * root is used.
+   */
+  getEnableBabelRCLookup(): boolean,
+
   /**
    * Specify any additional polyfill modules that should be processed
    * before regular module loading.
@@ -158,6 +165,7 @@ const Config = {
     extraNodeModules: Object.create(null),
     getAssetExts: () => [],
     getBlacklistRE: () => blacklist(),
+    getEnableBabelRCLookup: () => true,
     getPlatforms: () => [],
     getPolyfillModuleNames: () => [],
     getProjectRoots: () => {