diff --git a/cmd/sops/main.go b/cmd/sops/main.go
index 4b8c09042..f574155d2 100644
--- a/cmd/sops/main.go
+++ b/cmd/sops/main.go
@@ -235,20 +235,35 @@ func encrypt(c *cli.Context, file string, fileBytes []byte, output io.Writer) er
 	metadata.UnencryptedSuffix = c.String("unencrypted-suffix")
 	metadata.Version = "2.0.0"
 	var kmsKeys []sops.MasterKey
+	var pgpKeys []sops.MasterKey
+
 	if c.String("kms") != "" {
 		for _, k := range kms.MasterKeysFromArnString(c.String("kms")) {
 			kmsKeys = append(kmsKeys, &k)
 		}
 	}
-	metadata.KeySources = append(metadata.KeySources, sops.KeySource{Name: "kms", Keys: kmsKeys})
-
-	var pgpKeys []sops.MasterKey
 	if c.String("pgp") != "" {
 		for _, k := range pgp.MasterKeysFromFingerprintString(c.String("pgp")) {
 			pgpKeys = append(pgpKeys, &k)
 		}
 	}
-	metadata.KeySources = append(metadata.KeySources, sops.KeySource{Name: "pgp", Keys: pgpKeys})
+
+	if c.String("kms") == "" && c.String("pgp") == "" {
+		kmsString, pgpString, err := yaml.MasterKeyStringsForFile(file, nil)
+		if err == nil {
+			for _, k := range pgp.MasterKeysFromFingerprintString(pgpString) {
+				pgpKeys = append(pgpKeys, &k)
+			}
+			for _, k := range kms.MasterKeysFromArnString(kmsString) {
+				kmsKeys = append(kmsKeys, &k)
+			}
+		}
+	}
+	kmsKs := sops.KeySource{Name: "kms", Keys: kmsKeys}
+	pgpKs := sops.KeySource{Name: "pgp", Keys: pgpKeys}
+	metadata.KeySources = append(metadata.KeySources, kmsKs)
+	metadata.KeySources = append(metadata.KeySources, pgpKs)
+
 	key := make([]byte, 32)
 	_, err = rand.Read(key)
 	if err != nil {
diff --git a/yaml/config.go b/yaml/config.go
new file mode 100644
index 000000000..300eb94ec
--- /dev/null
+++ b/yaml/config.go
@@ -0,0 +1,87 @@
+package yaml
+
+import (
+	"fmt"
+	"github.com/autrilla/yaml"
+	"io/ioutil"
+	"os"
+	"path"
+	"regexp"
+)
+
+type fileSystem interface {
+	Stat(name string) (os.FileInfo, error)
+}
+
+type osFS struct {
+	stat func(string) (os.FileInfo, error)
+}
+
+func (fs osFS) Stat(name string) (os.FileInfo, error) {
+	return fs.stat(name)
+}
+
+var fs fileSystem = osFS{stat: os.Stat}
+
+const (
+	maxDepth       = 100
+	configFileName = ".sops.yaml"
+)
+
+// FindConfigFile looks for a sops config file in the current working directory and on parent directories, up to the limit defined by the maxDepth constant.
+func FindConfigFile(start string) (string, error) {
+	filepath := path.Dir(start)
+	for i := 0; i < maxDepth; i++ {
+		_, err := fs.Stat(path.Join(filepath, configFileName))
+		if err != nil {
+			filepath = path.Join(filepath, "..")
+		} else {
+			return path.Join(filepath, configFileName), nil
+		}
+	}
+	return "", fmt.Errorf("Config file not found")
+}
+
+type configFile struct {
+	CreationRules []creationRule `yaml:"creation_rules"`
+}
+
+type creationRule struct {
+	FilenameRegex string `yaml:"filename_regex"`
+	KMS           string
+	PGP           string
+}
+
+// Load loads a sops config file into a temporary struct
+func (f *configFile) load(bytes []byte) error {
+	err := yaml.Unmarshal(bytes, f)
+	if err != nil {
+		return fmt.Errorf("Could not unmarshal config file: %s", err)
+	}
+	return nil
+}
+
+// MasterKeyStringsForFile returns a comma separated string of KMS ARNs and a comma separated list of PGP fingerprints. If the config bytes are left empty, the function will look for the config file by itself.
+func MasterKeyStringsForFile(filepath string, confBytes []byte) (kms, pgp string, err error) {
+	if confBytes == nil {
+		confPath, err := FindConfigFile(filepath)
+		if err != nil {
+			return "", "", err
+		}
+		confBytes, err = ioutil.ReadFile(confPath)
+	}
+	if err != nil {
+		return "", "", fmt.Errorf("Could not read config file: %s", err)
+	}
+	conf := configFile{}
+	err = conf.load(confBytes)
+	if err != nil {
+		return "", "", fmt.Errorf("Error loading config: %s", err)
+	}
+	for _, rule := range conf.CreationRules {
+		if match, _ := regexp.MatchString(rule.FilenameRegex, filepath); match {
+			return rule.KMS, rule.PGP, nil
+		}
+	}
+	return "", "", nil
+}
diff --git a/yaml/config_test.go b/yaml/config_test.go
new file mode 100644
index 000000000..afd3dd9b1
--- /dev/null
+++ b/yaml/config_test.go
@@ -0,0 +1,85 @@
+package yaml
+
+import (
+	"github.com/stretchr/testify/assert"
+	"os"
+	"path"
+	"testing"
+)
+
+type mockFS struct {
+	stat func(string) (os.FileInfo, error)
+}
+
+func (fs mockFS) Stat(name string) (os.FileInfo, error) {
+	return fs.stat(name)
+}
+
+func TestFindConfigFileRecursive(t *testing.T) {
+	expectedPath := path.Clean("./../../.sops.yaml")
+	fs = mockFS{stat: func(name string) (os.FileInfo, error) {
+		if name == expectedPath {
+			return nil, nil
+		}
+		return nil, &os.PathError{}
+	}}
+	filepath, err := FindConfigFile(".")
+	assert.Equal(t, nil, err)
+	assert.Equal(t, expectedPath, filepath)
+}
+
+func TestFindConfigFileCurrentDir(t *testing.T) {
+	expectedPath := path.Clean(".sops.yaml")
+	fs = mockFS{stat: func(name string) (os.FileInfo, error) {
+		if name == expectedPath {
+			return nil, nil
+		}
+		return nil, &os.PathError{}
+	}}
+	filepath, err := FindConfigFile(".")
+	assert.Equal(t, nil, err)
+	assert.Equal(t, expectedPath, filepath)
+}
+
+var sampleConfig = []byte(`
+creation_rules:
+  - filename_regex: foobar*
+    kms: "1"
+    pgp: "2"
+  - filename_regex: ""
+    kms: foo
+    pgp: bar
+`)
+
+func TestLoadConfigFile(t *testing.T) {
+	expected := configFile{
+		CreationRules: []creationRule{
+			creationRule{
+				FilenameRegex: "foobar*",
+				KMS:           "1",
+				PGP:           "2",
+			},
+			creationRule{
+				FilenameRegex: "",
+				KMS:           "foo",
+				PGP:           "bar",
+			},
+		},
+	}
+
+	conf := configFile{}
+	err := conf.load(sampleConfig)
+	assert.Equal(t, nil, err)
+	assert.Equal(t, expected, conf)
+}
+
+func TestMasterKeyStringsForFile(t *testing.T) {
+	kms, pgp, err := MasterKeyStringsForFile("foobar2000", sampleConfig)
+	assert.Equal(t, nil, err)
+	assert.Equal(t, "1", kms)
+	assert.Equal(t, "2", pgp)
+	kms, pgp, err = MasterKeyStringsForFile("whatever", sampleConfig)
+	assert.Equal(t, nil, err)
+	assert.Equal(t, "foo", kms)
+	assert.Equal(t, "bar", pgp)
+}