diff --git a/examples/buildexample/.yeyrc.yaml b/examples/buildexample/.yeyrc.yaml
new file mode 100644
index 0000000..40b6bb4
--- /dev/null
+++ b/examples/buildexample/.yeyrc.yaml
@@ -0,0 +1,3 @@
+build:
+  dockerfile: ./Dockerfile
+  context: .
diff --git a/examples/buildexample/Dockerfile b/examples/buildexample/Dockerfile
new file mode 100644
index 0000000..254b321
--- /dev/null
+++ b/examples/buildexample/Dockerfile
@@ -0,0 +1,3 @@
+FROM ubuntu:latest
+
+CMD ["bash"]
\ No newline at end of file
diff --git a/go.mod b/go.mod
index 6e8c5ff..24feb09 100644
--- a/go.mod
+++ b/go.mod
@@ -1,6 +1,6 @@
 module github.com/silphid/yey
 
-go 1.14
+go 1.16
 
 require (
 	github.com/AlecAivazis/survey/v2 v2.2.12
diff --git a/go.sum b/go.sum
index 8b6bfe7..ca68029 100644
--- a/go.sum
+++ b/go.sum
@@ -178,6 +178,7 @@ github.com/spf13/pflag v1.0.5 h1:iy+VFUOCP1a+8yFto/drg2CJ5u0yRoB7fZw3DKv/JXA=
 github.com/spf13/pflag v1.0.5/go.mod h1:McXfInJRrz4CZXVZOBLb0bTZqETkiAhM9Iw0y3An2Bg=
 github.com/spf13/viper v1.7.0/go.mod h1:8WkrPz2fc9jxqZNCJI/76HCieCp4Q8HaLFoCha5qpdg=
 github.com/stretchr/objx v0.1.0/go.mod h1:HFkY916IF+rwdDfMAkV7OtwuqBVzrE8GR6GFx+wExME=
+github.com/stretchr/objx v0.1.1 h1:2vfRuCMp5sSVIDSqO8oNnWJq7mPa6KVP3iPIwFBuy8A=
 github.com/stretchr/objx v0.1.1/go.mod h1:HFkY916IF+rwdDfMAkV7OtwuqBVzrE8GR6GFx+wExME=
 github.com/stretchr/testify v1.2.1/go.mod h1:a8OnRcib4nhh0OaRAV+Yts87kKdq0PP7pXfy6kDkUVs=
 github.com/stretchr/testify v1.2.2/go.mod h1:a8OnRcib4nhh0OaRAV+Yts87kKdq0PP7pXfy6kDkUVs=
diff --git a/src/cmd/run/run.go b/src/cmd/run/run.go
index 51cdefc..633bbff 100644
--- a/src/cmd/run/run.go
+++ b/src/cmd/run/run.go
@@ -3,9 +3,11 @@ package run
 import (
 	"context"
 	"fmt"
+	"os"
 
 	yey "github.com/silphid/yey/src/internal"
 	"github.com/silphid/yey/src/internal/docker"
+	"github.com/silphid/yey/src/internal/logging"
 
 	"github.com/silphid/yey/src/cmd"
 
@@ -65,6 +67,15 @@ func run(ctx context.Context, name string, options Options) error {
 		yeyContext.Remove = options.Remove
 	}
 
+	if yeyContext.Image == "" {
+		var err error
+		yeyContext.Image, err = readAndBuildDockerfile(ctx, yeyContext.Build)
+		if err != nil {
+			return fmt.Errorf("failed to build yey context image: %w", err)
+		}
+		logging.Log("built image: %s", yeyContext.Image)
+	}
+
 	containerName := yey.ContainerName(contexts.Path, yeyContext)
 
 	if options.Reset {
@@ -75,3 +86,18 @@ func run(ctx context.Context, name string, options Options) error {
 
 	return docker.Start(ctx, yeyContext, containerName)
 }
+
+func readAndBuildDockerfile(ctx context.Context, build yey.DockerBuild) (string, error) {
+	dockerBytes, err := os.ReadFile(build.Dockerfile)
+	if err != nil {
+		return "", fmt.Errorf("failed to read dockerfile: %w", err)
+	}
+
+	imageName := yey.ImageName(dockerBytes)
+
+	if err := docker.Build(ctx, build.Dockerfile, imageName, build.Args, build.Context); err != nil {
+		return "", fmt.Errorf("failed to build image: %w", err)
+	}
+
+	return imageName, nil
+}
diff --git a/src/internal/context.go b/src/internal/context.go
index df30cc2..9cff009 100644
--- a/src/internal/context.go
+++ b/src/internal/context.go
@@ -4,11 +4,18 @@ import (
 	"gopkg.in/yaml.v2"
 )
 
+type DockerBuild struct {
+	Dockerfile string
+	Args       map[string]string
+	Context    string
+}
+
 // Context represents execution configuration for some docker container
 type Context struct {
 	Name       string `yaml:",omitempty"`
 	Remove     *bool
 	Image      string
+	Build      DockerBuild
 	Env        map[string]string
 	Mounts     map[string]string
 	Cmd        []string
@@ -30,6 +37,10 @@ func (c Context) Clone() Context {
 	for key, value := range c.Mounts {
 		clone.Mounts[key] = value
 	}
+	clone.Build.Args = make(map[string]string)
+	for key, value := range c.Build.Args {
+		clone.Build.Args[key] = value
+	}
 	return clone
 }
 
@@ -49,6 +60,12 @@ func (c Context) Merge(source Context) Context {
 	for key, value := range source.Mounts {
 		merged.Mounts[key] = value
 	}
+	if source.Build.Dockerfile != "" {
+		merged.Build.Dockerfile = source.Build.Dockerfile
+	}
+	for key, value := range source.Build.Args {
+		merged.Build.Args[key] = value
+	}
 	return merged
 }
 
diff --git a/src/internal/contextFile.go b/src/internal/contextFile.go
index 78c4f72..0432671 100644
--- a/src/internal/contextFile.go
+++ b/src/internal/contextFile.go
@@ -74,7 +74,7 @@ func readContextFileFromNetwork(url string) ([]byte, error) {
 }
 
 // parseContextFile unmarshals the contextFile data and resolves any parent contextfiles
-func parseContextFile(data []byte) (Contexts, error) {
+func parseContextFile(root string, data []byte) (Contexts, error) {
 	var ctxFile ContextFile
 	if err := yaml.Unmarshal(data, &ctxFile); err != nil {
 		return Contexts{}, fmt.Errorf("failed to decode context file: %w", err)
@@ -89,6 +89,13 @@ func parseContextFile(data []byte) (Contexts, error) {
 		Named:   ctxFile.Named,
 	}
 
+	if root != "" {
+		contexts.Context = resolveContextPaths(root, contexts.Context)
+		for name, context := range contexts.Named {
+			contexts.Named[name] = resolveContextPaths(root, context)
+		}
+	}
+
 	if ctxFile.Parent != "" {
 		parent, err := readAndParseContextFileFromURI(ctxFile.Parent)
 		if err != nil {
@@ -105,10 +112,12 @@ func parseContextFile(data []byte) (Contexts, error) {
 func readAndParseContextFileFromURI(path string) (Contexts, error) {
 	var bytes []byte
 	var err error
+	var root string
 
 	if strings.HasPrefix(path, "https:") || strings.HasPrefix(path, "http:") {
 		bytes, err = readContextFileFromNetwork(path)
 	} else {
+		root = filepath.Dir(path)
 		bytes, err = readContextFileFromFilePath(path)
 	}
 
@@ -116,7 +125,7 @@ func readAndParseContextFileFromURI(path string) (Contexts, error) {
 		return Contexts{}, fmt.Errorf("failed to read context file: %w", err)
 	}
 
-	return parseContextFile(bytes)
+	return parseContextFile(root, bytes)
 }
 
 // LoadContexts reads the context file and returns the contexts. It starts by reading from current
@@ -127,7 +136,7 @@ func LoadContexts() (Contexts, error) {
 		return Contexts{}, fmt.Errorf("failed to read context file: %w", err)
 	}
 
-	contexts, err := parseContextFile(bytes)
+	contexts, err := parseContextFile(filepath.Dir(path), bytes)
 	if err != nil {
 		return Contexts{}, err
 	}
@@ -135,3 +144,23 @@ func LoadContexts() (Contexts, error) {
 
 	return contexts, nil
 }
+
+func resolveContextPaths(root string, context Context) Context {
+	clone := context.Clone()
+	clone.Build.Dockerfile = resolvePath(root, context.Build.Dockerfile)
+	clone.Build.Context = resolvePath(root, clone.Build.Context)
+	for key, value := range clone.Mounts {
+		clone.Mounts[resolvePath(root, key)] = value
+	}
+	return clone
+}
+
+func resolvePath(root, path string) string {
+	if path == "" {
+		return ""
+	}
+	if strings.HasPrefix(path, "/") {
+		return path
+	}
+	return filepath.Join(root, path)
+}
diff --git a/src/internal/docker/cli.go b/src/internal/docker/cli.go
index b91ab07..0923175 100644
--- a/src/internal/docker/cli.go
+++ b/src/internal/docker/cli.go
@@ -6,6 +6,7 @@ import (
 	"fmt"
 	"os"
 	"os/exec"
+	"path/filepath"
 	"regexp"
 	"strings"
 
@@ -45,6 +46,19 @@ func Remove(ctx context.Context, containerName string) error {
 	return attachStdPipes(exec.CommandContext(ctx, "docker", "rm", "-v", containerName)).Run()
 }
 
+func Build(ctx context.Context, dockerPath string, imageName string, buildArgs map[string]string, context string) error {
+	args := []string{"build", "-f", dockerPath, "-t", imageName}
+	for key, value := range buildArgs {
+		args = append(args, "--build-arg", fmt.Sprintf("%s=%q", key, value))
+	}
+	if context == "" {
+		context = filepath.Dir(dockerPath)
+	}
+	args = append(args, context)
+
+	return attachStdPipes(exec.CommandContext(ctx, "docker", args...)).Run()
+}
+
 var newlines = regexp.MustCompile(`\r?\n`)
 
 func ListContainers(ctx context.Context) ([]string, error) {
diff --git a/src/internal/yey.go b/src/internal/yey.go
index e502c2f..42f4da8 100644
--- a/src/internal/yey.go
+++ b/src/internal/yey.go
@@ -56,3 +56,7 @@ func ContainerPathPrefix(path string) string {
 	}
 	return fmt.Sprintf("yey-%s-%s", pathBase, hash(path))
 }
+
+func ImageName(dockerfile []byte) string {
+	return fmt.Sprintf("yey-%s", hash(string(dockerfile)))
+}