diff --git a/build.gradle b/build.gradle
index 4493b58..1f96bdc 100644
--- a/build.gradle
+++ b/build.gradle
@@ -28,7 +28,7 @@ repositories {
 
 dependencies {
     compile gradleApi()
-    compile 'org.yaml:snakeyaml:1.16'
+    compile 'org.yaml:snakeyaml:1.17'
     testCompile gradleTestKit()
     testCompile ('org.spockframework:spock-core:1.0-groovy-2.4') {
         // Conflicting module versions: 2.4.4 vs. 2.4.1
@@ -37,7 +37,7 @@ dependencies {
 }
 
 task wrapper(type: Wrapper) {
-    gradleVersion = '3.1'
+    gradleVersion = '3.2.1'
 }
 
 task sourcesJar(type: Jar) {
diff --git a/gradle/wrapper/gradle-wrapper.jar b/gradle/wrapper/gradle-wrapper.jar
index 6ffa237..51288f9 100644
Binary files a/gradle/wrapper/gradle-wrapper.jar and b/gradle/wrapper/gradle-wrapper.jar differ
diff --git a/gradle/wrapper/gradle-wrapper.properties b/gradle/wrapper/gradle-wrapper.properties
index c45e82a..00c270a 100644
--- a/gradle/wrapper/gradle-wrapper.properties
+++ b/gradle/wrapper/gradle-wrapper.properties
@@ -1,6 +1,6 @@
-#Tue Sep 27 20:55:02 CEST 2016
+#Mon Jan 02 20:24:04 CET 2017
 distributionBase=GRADLE_USER_HOME
 distributionPath=wrapper/dists
 zipStoreBase=GRADLE_USER_HOME
 zipStorePath=wrapper/dists
-distributionUrl=https\://services.gradle.org/distributions/gradle-3.1-bin.zip
+distributionUrl=https\://services.gradle.org/distributions/gradle-3.2.1-bin.zip
diff --git a/gradlew b/gradlew
index 9aa616c..4453cce 100755
--- a/gradlew
+++ b/gradlew
@@ -1,4 +1,4 @@
-#!/usr/bin/env bash
+#!/usr/bin/env sh
 
 ##############################################################################
 ##
@@ -154,16 +154,19 @@ if $cygwin ; then
     esac
 fi
 
-# Split up the JVM_OPTS And GRADLE_OPTS values into an array, following the shell quoting and substitution rules
-function splitJvmOpts() {
-    JVM_OPTS=("$@")
+# Escape application args
+save ( ) {
+    for i do printf %s\\n "$i" | sed "s/'/'\\\\''/g;1s/^/'/;\$s/\$/' \\\\/" ; done
+    echo " "
 }
-eval splitJvmOpts $DEFAULT_JVM_OPTS $JAVA_OPTS $GRADLE_OPTS
-JVM_OPTS[${#JVM_OPTS[*]}]="-Dorg.gradle.appname=$APP_BASE_NAME"
+APP_ARGS=$(save "$@")
+
+# Collect all arguments for the java command, following the shell quoting and substitution rules
+eval set -- $DEFAULT_JVM_OPTS $JAVA_OPTS $GRADLE_OPTS "\"-Dorg.gradle.appname=$APP_BASE_NAME\"" -classpath "\"$CLASSPATH\"" org.gradle.wrapper.GradleWrapperMain "$APP_ARGS"
 
 # by default we should be in the correct project dir, but when run from Finder on Mac, the cwd is wrong
-if [[ "$(uname)" == "Darwin" ]] && [[ "$HOME" == "$PWD" ]]; then
+if [ "$(uname)" = "Darwin" ] && [ "$HOME" = "$PWD" ]; then
   cd "$(dirname "$0")"
 fi
 
-exec "$JAVACMD" "${JVM_OPTS[@]}" -classpath "$CLASSPATH" org.gradle.wrapper.GradleWrapperMain "$@"
+exec "$JAVACMD" "$@"
diff --git a/src/main/groovy/com/avast/gradle/dockercompose/ComposeExtension.groovy b/src/main/groovy/com/avast/gradle/dockercompose/ComposeExtension.groovy
index 65f0797..ca3cf05 100644
--- a/src/main/groovy/com/avast/gradle/dockercompose/ComposeExtension.groovy
+++ b/src/main/groovy/com/avast/gradle/dockercompose/ComposeExtension.groovy
@@ -5,8 +5,10 @@ import com.avast.gradle.dockercompose.tasks.ComposeUp
 import groovy.transform.PackageScope
 import org.gradle.api.Project
 import org.gradle.api.Task
+import org.gradle.process.ExecSpec
 import org.gradle.process.JavaForkOptions
 import org.gradle.process.ProcessForkOptions
+import org.gradle.util.VersionNumber
 
 import java.time.Duration
 
@@ -81,6 +83,18 @@ class ComposeExtension {
         res.addAll(args)
         res
     }
+
+    VersionNumber getDockerComposeVersion() {
+        def p = project
+        new ByteArrayOutputStream().withStream { os ->
+            p.exec { ExecSpec e ->
+                e.environment = environment
+                e.commandLine composeCommand('--version')
+                e.standardOutput = os
+            }
+            VersionNumber.parse(os.toString().trim().findAll(/(\d+\.){2}(\d+)/).head())
+        }
+    }
 }
 
 enum RemoveImages {
diff --git a/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeDown.groovy b/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeDown.groovy
index 38709da..36bbd8f 100644
--- a/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeDown.groovy
+++ b/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeDown.groovy
@@ -23,7 +23,7 @@ class ComposeDown extends DefaultTask {
                 e.commandLine extension.composeCommand('stop')
             }
             if (extension.removeContainers) {
-                if (getDockerComposeVersion() >= VersionNumber.parse('1.6.0')) {
+                if (extension.getDockerComposeVersion() >= VersionNumber.parse('1.6.0')) {
                     String[] args = ['down']
                     switch (extension.removeImages) {
                         case RemoveImages.All:
@@ -49,15 +49,4 @@ class ComposeDown extends DefaultTask {
             }
         }
     }
-
-    VersionNumber getDockerComposeVersion() {
-        new ByteArrayOutputStream().withStream { os ->
-            project.exec { ExecSpec e ->
-                e.environment = extension.environment
-                e.commandLine extension.composeCommand('--version')
-                e.standardOutput = os
-            }
-            VersionNumber.parse(os.toString().trim().findAll(/(\d+\.){2}(\d+)/).head())
-        }
-    }
 }
diff --git a/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeUp.groovy b/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeUp.groovy
index 7c486ef..75a1bae 100644
--- a/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeUp.groovy
+++ b/src/main/groovy/com/avast/gradle/dockercompose/tasks/ComposeUp.groovy
@@ -7,6 +7,7 @@ import com.avast.gradle.dockercompose.ServiceInfo
 import org.gradle.api.DefaultTask
 import org.gradle.api.tasks.TaskAction
 import org.gradle.process.ExecSpec
+import org.gradle.util.VersionNumber
 import org.yaml.snakeyaml.Yaml
 
 import java.time.Instant
@@ -103,14 +104,49 @@ class ComposeUp extends DefaultTask {
     }
 
     Iterable<String> getServiceNames() {
-        String[] composeFiles = extension.useComposeFiles.empty ? ['docker-compose.yml', 'docker-compose.override.yml'] : extension.useComposeFiles
-        composeFiles
-            .findAll { project.file(it).exists() }
-            .collectMany { composeFile ->
+        if (extension.getDockerComposeVersion() >= VersionNumber.parse('1.6.0')) {
+            new ByteArrayOutputStream().withStream { os ->
+                project.exec { ExecSpec e ->
+                    e.environment = extension.environment
+                    e.commandLine extension.composeCommand('config', '--services')
+                    e.standardOutput = os
+                }
+                os.toString().readLines()
+            }
+        } else {
+            def composeFiles = extension.useComposeFiles.empty ? getStandardComposeFiles() : getCustomComposeFiles()
+            composeFiles.collectMany { composeFile ->
                 def compose = (Map<String, Object>) (new Yaml().load(project.file(composeFile).text))
                 // if there is 'version: 2' on top-level then information about services is in 'services' sub-tree
                 '2'.equals(compose.get('version')) ? ((Map) compose.get('services')).keySet() : compose.keySet()
             }.unique()
+
+        }
+    }
+
+    Iterable<File> getStandardComposeFiles() {
+        def res = []
+        def f = findInParentDirectories('docker-compose.yml', project.projectDir)
+        if (f != null) res.add(f)
+        f = findInParentDirectories('docker-compose.override.yml', project.projectDir)
+        if (f != null) res.add(f)
+        res
+    }
+
+    Iterable<File> getCustomComposeFiles() {
+        extension.useComposeFiles.collect {
+            def f = project.file(it)
+            if (!f.exists()) {
+                throw new IllegalArgumentException("Custom Docker Compose file not found: $f")
+            }
+            f
+        }
+    }
+
+    File findInParentDirectories(String filename, File directory) {
+        if ((directory) == null) return null
+        def f = new File(directory, filename)
+        f.exists() ? f : findInParentDirectories(filename, directory.parentFile)
     }
 
     String getContainerId(String serviceName) {