Set cwd to the location of the closest package.json

index.js

@@ -1,5 +1,6 @@
 "use strict";
 
+var findup = require("findup");
 var stream = require("stream");
 var util   = require("util");
 var path   = require("path");
@@ -49,7 +50,7 @@ function buildTransform(opts) {
 }
 
 function normalizeOptions(preconfiguredOpts, transformOpts, filename) {
-  const basedir = normalizeTransformBasedir(transformOpts);
+  const basedir = normalizeTransformBasedir(filename);
   const opts = normalizeTransformOpts(transformOpts);
 
   // Transform options override preconfigured options unless they are undefined.
@@ -95,8 +96,18 @@ function normalizeOptions(preconfiguredOpts, transformOpts, filename) {
   return opts;
 }
 
-function normalizeTransformBasedir(opts) {
-  return path.resolve(opts._flags && opts._flags.basedir || ".");
+var findConfigCache = {};
+
+function normalizeTransformBasedir(filename) {
+  var dirname = path.dirname(filename);
+
+  try {
+    return findConfigCache[dirname] || (
+      findConfigCache[dirname] = findup.sync(dirname, "package.json")
+    );
+  } catch (e) {
+    return dirname;
+  }
 }
 
 function normalizeTransformOpts(opts) {

package.json

@@ -33,5 +33,8 @@
   },
   "scripts": {
     "test": "tap test/*.js"
+  },
+  "dependencies": {
+    "findup": "^0.1.5"
   }
 }

test/browserify-package.js

@@ -4,9 +4,10 @@ var test = require('tap').test;
 var vm = require('vm');
 
 test('browserify package', function (t) {
-  t.plan(3);
+  t.plan(4);
 
   process.env.NODE_ENV = 'development';
+  process.env.LOCAL_ENV_HIJACK = 'production';
 
   var b = browserify();
   b.require(path.join(__dirname, 'pkg-app/index.js'), {expose: 'pkgApp'});
@@ -20,6 +21,7 @@ test('browserify package', function (t) {
     c.require('pkgApp')({
       createClass: function(obj) {
         t.equal(obj.envLength(), process.env.NODE_ENV.length);
+        t.equal(obj.localEnvHijack(), process.env.LOCAL_ENV_HIJACK.toUpperCase());
         t.equal(obj.displayName, 'TestComponent')
       }
     });