diff --git a/docs/source/faq.md b/docs/source/faq.md
index e1ed8070..7c5c7e41 100644
--- a/docs/source/faq.md
+++ b/docs/source/faq.md
@@ -70,3 +70,31 @@ or similar traditional docker command.
 
 Check out the [binder-examples](http://github.com/binder-examples/) GitHub
 organization for example repositories you can copy & modify for your own use!
+
+## Can I use repo2docker to edit a local repository within a Docker environment?
+
+Yes: use the `--editable` or `-E` flag (don't confuse it with the `-e`
+flag for environment variables), and run repo2docker on a local
+repository: `repo2docker -E my-repository/.`.
+
+This builds a Docker container from the files in that repository
+(using, for example, a `requirements.txt` file or `Dockerfile`), then
+runs that container, while connecting the home directory inside the
+container to the local repository outside the container. For example,
+in case there is a notebook file (`.ipynb`), this will open in a local
+webbrowser, and one can edit it and save it. The resulting notebook is
+updated in both the Docker container and the local repository. Once
+the container is exited, the changed file will still be in the local
+repository.
+
+This allows for easy testing of the container while debugging some
+items, as well as using a fully customizable container to edit, for
+example, notebooks.
+
+**note**
+
+Editable mode is a convenience option that will mount the repository
+to container working directory (usually `/home/$USER`). If you need to
+mount to a different location in the container, use the `--volumes`
+option instead. Similarly, for a fully customized user Dockerfile,
+this option is not guaranteed to work.
diff --git a/repo2docker/app.py b/repo2docker/app.py
index 575c9db4..c594b4ed 100644
--- a/repo2docker/app.py
+++ b/repo2docker/app.py
@@ -342,6 +342,13 @@ class Repo2Docker(Application):
             default=[]
         )
 
+        argparser.add_argument(
+            '--editable', '-E',
+            dest='editable',
+            action='store_true',
+            help='Use the local repository in edit mode',
+        )
+
         argparser.add_argument(
             '--appendix',
             type=str,
@@ -392,6 +399,8 @@ class Repo2Docker(Application):
             self.repo = args.repo
             self.ref = None
             self.cleanup_checkout = False
+            if args.editable:
+                self.volumes[os.path.abspath(args.repo)] = '.'
         else:
             self.repo_type = 'remote'
             self.repo = args.repo
diff --git a/tests/conftest.py b/tests/conftest.py
index 4e05a690..1af3ec9a 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -68,6 +68,14 @@ def make_test_func(args):
     return test
 
 
+@pytest.fixture()
+def run_repo2docker():
+    def run_test(args):
+        return make_test_func(args)()
+    return run_test
+
+
+
 class Repo2DockerTest(pytest.Function):
     """A pytest.Item for running repo2docker"""
     def __init__(self, name, parent, args):
diff --git a/tests/dockerfile/editable/Dockerfile b/tests/dockerfile/editable/Dockerfile
new file mode 100644
index 00000000..8baa17d8
--- /dev/null
+++ b/tests/dockerfile/editable/Dockerfile
@@ -0,0 +1,13 @@
+FROM python:3.5
+
+RUN pip install --no-cache notebook
+
+CMD "/bin/sh"
+
+ADD change.sh /usr/local/bin/change.sh
+
+ARG NB_UID
+ENV HOME /tmp
+WORKDIR ${HOME}
+
+USER $NB_UID
diff --git a/tests/dockerfile/editable/README.rst b/tests/dockerfile/editable/README.rst
new file mode 100644
index 00000000..14169b1a
--- /dev/null
+++ b/tests/dockerfile/editable/README.rst
@@ -0,0 +1,19 @@
+Docker - Edit mode
+------------------
+
+Using the --editable option with a local repository, one can modify a
+file or create a new file in the container, and this change is
+reflected in the respective host directory. It is essentially a
+shortcut for `--mount
+type=bind,source=<local-host-repository>,target=.` (where the target
+resolves into the container working directory).
+
+This is tested by running the change.sh script inside the container
+(using the 'cmd' argument to the Repo2Docker app), which creates a new
+file, and then verifying on the host side the new file is created with
+the proper contents.
+
+In practice, this can be used to run a notebook from inside a
+container (which provides the proper environment), making changes as
+necessary, which are then immediately reflected in the host
+repository.
diff --git a/tests/dockerfile/editable/change.sh b/tests/dockerfile/editable/change.sh
new file mode 100755
index 00000000..8f15b4af
--- /dev/null
+++ b/tests/dockerfile/editable/change.sh
@@ -0,0 +1,6 @@
+#!/bin/bash
+
+cat <<EOF > newfile
+new contents
+EOF
+exit 0
diff --git a/tests/test_editable.py b/tests/test_editable.py
new file mode 100644
index 00000000..1bbd05d4
--- /dev/null
+++ b/tests/test_editable.py
@@ -0,0 +1,56 @@
+import os
+import time
+import re
+import tempfile
+from conftest import make_test_func
+from repo2docker.app import Repo2Docker
+
+
+DIR = os.path.join(os.path.dirname(__file__), 'dockerfile', 'editable')
+
+
+def test_editable(run_repo2docker):
+    """Run a local repository in edit mode. Verify a new file has been
+    created afterwards"""
+    newfile = os.path.join(DIR, 'newfile')
+    try:
+        # If the file didn't get properly cleaned up last time, we
+        # need to do that now
+        os.remove(newfile)
+    except FileNotFoundError:
+        pass
+    argv = ['--editable', DIR, '/usr/local/bin/change.sh']
+    run_repo2docker(argv)
+    try:
+        with open(newfile) as fp:
+            contents = fp.read()
+        assert contents == "new contents\n"
+    finally:
+        os.remove(newfile)
+
+
+def test_editable_by_host():
+    """Test whether a new file created by the host environment, is
+    detected in the container"""
+
+    app = Repo2Docker()
+    app.initialize(['--editable', DIR])
+    app.run = False
+    app.start()  # This just build the image and does not run it.
+    container = app.start_container()
+    # give the container a chance to start
+    time.sleep(1)
+    try:
+        with tempfile.NamedTemporaryFile(dir=DIR, prefix='testfile', suffix='.txt'):
+            status, output = container.exec_run(['sh', '-c', 'ls testfile????????.txt'])
+            assert status == 0
+            assert re.match(br'^testfile\w{8}\.txt\n$', output) is not None
+        # File should be removed in the container as well
+        status, output = container.exec_run(['sh', '-c', 'ls testfile????????.txt'])
+        assert status != 1
+        assert re.match(br'^testfile\w{8}\.txt\n$', output) is None
+
+    finally:
+        # stop the container
+        container.stop()
+        app.wait_for_container(container)