diff --git a/lib/cli/options.js b/lib/cli/options.js
index 09351957b4..bd4b115a7f 100644
--- a/lib/cli/options.js
+++ b/lib/cli/options.js
@@ -8,7 +8,9 @@
  */
 
 const fs = require('fs');
+const path = require('path');
 const ansi = require('ansi-colors');
+const yargs = require('yargs/yargs');
 const yargsParser = require('yargs-parser');
 const {
   types,
@@ -212,7 +214,7 @@ const parse = (args = [], defaultValues = {}, ...configObjects) => {
 const loadRc = (args = {}) => {
   if (args.config !== false) {
     const config = args.config || findConfig();
-    return config ? loadConfig(config) : {};
+    return config ? loadRcFile(loadConfig(config), config) : {};
   }
 };
 
@@ -254,7 +256,7 @@ const loadPkgRc = (args = {}) => {
       const pkg = JSON.parse(configData);
       if (pkg.mocha) {
         debug('`mocha` prop of package.json parsed: %O', pkg.mocha);
-        result = pkg.mocha;
+        result = loadRcFile(pkg.mocha, filepath);
       } else {
         debug('no config found in %s', filepath);
       }
@@ -271,6 +273,20 @@ const loadPkgRc = (args = {}) => {
 
 module.exports.loadPkgRc = loadPkgRc;
 
+/**
+ * Loads the inherited configuration of the rc file located at the specified {@linkcode filePath}.
+ *
+ * @param {Object} config - The parsed configuration of the rc file.
+ * @param {string} filePath - The name of the file containing the parsed configuration.
+ */
+const loadRcFile = (config, filePath) => {
+  const {$0, ...options} = yargs(config._, path.dirname(filePath))
+    .parserConfiguration(configuration)
+    .config(config).argv;
+
+  return options;
+};
+
 /**
  * Priority list:
  *
diff --git a/test/integration/fixtures/config/mocharc-extended/.mocharc.json b/test/integration/fixtures/config/mocharc-extended/.mocharc.json
new file mode 100644
index 0000000000..98aae677ca
--- /dev/null
+++ b/test/integration/fixtures/config/mocharc-extended/.mocharc.json
@@ -0,0 +1,3 @@
+{
+  "extends": "./extends.json"
+}
diff --git a/test/integration/fixtures/config/mocharc-extended/base.json b/test/integration/fixtures/config/mocharc-extended/base.json
new file mode 100644
index 0000000000..89c92825f9
--- /dev/null
+++ b/test/integration/fixtures/config/mocharc-extended/base.json
@@ -0,0 +1,6 @@
+{
+  "require": ["foo", "bar"],
+  "bail": true,
+  "reporter": "dot",
+  "slow": 60
+}
diff --git a/test/integration/fixtures/config/mocharc-extended/extends.json b/test/integration/fixtures/config/mocharc-extended/extends.json
new file mode 100644
index 0000000000..54cb7122c5
--- /dev/null
+++ b/test/integration/fixtures/config/mocharc-extended/extends.json
@@ -0,0 +1,4 @@
+{
+  "extends": "./modifiers.json",
+  "_": ["**/*.spec.js"]
+}
diff --git a/test/integration/fixtures/config/mocharc-extended/modifiers.json b/test/integration/fixtures/config/mocharc-extended/modifiers.json
new file mode 100644
index 0000000000..8e6dcb1d3c
--- /dev/null
+++ b/test/integration/fixtures/config/mocharc-extended/modifiers.json
@@ -0,0 +1,5 @@
+{
+  "extends": "./base.json",
+  "reporter": "html",
+  "slow": 30
+}
diff --git a/test/integration/fixtures/config/mocharc-extended/package-lock.json b/test/integration/fixtures/config/mocharc-extended/package-lock.json
new file mode 100644
index 0000000000..12dd16138f
--- /dev/null
+++ b/test/integration/fixtures/config/mocharc-extended/package-lock.json
@@ -0,0 +1,6 @@
+{
+    "mocha": {
+        "extends": "./extends.json",
+        "grep": "package"
+    }
+}
diff --git a/test/integration/options.spec.js b/test/integration/options.spec.js
new file mode 100644
index 0000000000..6f03fca663
--- /dev/null
+++ b/test/integration/options.spec.js
@@ -0,0 +1,58 @@
+'use strict';
+
+var path = require('path');
+var loadOptions = require('../../lib/cli/options').loadOptions;
+
+describe('options', function () {
+  var workingDirectory;
+  const workspaceDir = path.join(
+    __dirname,
+    'fixtures',
+    'config',
+    'mocharc-extended'
+  );
+  const configFile = path.join(workspaceDir, 'extends.json');
+
+  beforeEach(function () {
+    workingDirectory = process.cwd();
+    process.chdir(workspaceDir);
+  });
+
+  afterEach(function () {
+    process.chdir(workingDirectory);
+  });
+
+  it('Should load `_`-option properly', function () {
+    var extended = loadOptions(['--config', configFile]);
+    expect(extended._, 'to equal', ['**/*.spec.js']);
+  });
+
+  it('Should support extended options using --config parameter', function () {
+    var extended = loadOptions(['--config', configFile]);
+    expect(extended.require, 'to equal', ['foo', 'bar']);
+    expect(extended.bail, 'to equal', true);
+    expect(extended.reporter, 'to equal', 'html');
+    expect(extended.slow, 'to equal', 30);
+  });
+
+  it('Should support extended options using rc file', function () {
+    var extended = loadOptions([]);
+    expect(extended.require, 'to equal', ['foo', 'bar']);
+    expect(extended.bail, 'to equal', true);
+    expect(extended.reporter, 'to equal', 'html');
+    expect(extended.slow, 'to equal', 30);
+  });
+
+  it('Should support extended options using package.json', function () {
+    var extended = loadOptions([
+      '--no-config',
+      '--package',
+      path.join(workspaceDir, 'package-lock.json')
+    ]);
+    expect(extended.require, 'to equal', ['foo', 'bar']);
+    expect(extended.bail, 'to equal', true);
+    expect(extended.reporter, 'to equal', 'html');
+    expect(extended.slow, 'to equal', 30);
+    expect(extended.grep, 'to equal', 'package');
+  });
+});