diff --git a/topology/pre-processor.c b/topology/pre-processor.c
index fce37b7..de44ac5 100644
--- a/topology/pre-processor.c
+++ b/topology/pre-processor.c
@@ -310,11 +310,11 @@ static int pre_process_variables_expand_fcn(snd_config_t **dst, const char *str,
 }
 
 static int pre_process_includes(struct tplg_pre_processor *tplg_pp, snd_config_t *top,
-				const char *pre_processor_defs);
+				const char *pre_processor_defs, const char *inc_path);
 
 static int pre_process_include_conf(struct tplg_pre_processor *tplg_pp, snd_config_t *config,
 				    const char *pre_processor_defs, snd_config_t **new,
-				    snd_config_t *variable)
+				    snd_config_t *variable, const char *inc_path)
 {
 	snd_config_iterator_t i, next;
 	const char *variable_name;
@@ -371,7 +371,7 @@ static int pre_process_include_conf(struct tplg_pre_processor *tplg_pp, snd_conf
 		regex_t regex;
 		const char *filename;
 		const char *id;
-		char *full_path, *alsa_dir = getenv("ALSA_CONFIG_DIR");
+		char *full_path;
 
 		n = snd_config_iterator_entry(i);
 		if (snd_config_get_id(n, &id) < 0)
@@ -389,22 +389,26 @@ static int pre_process_include_conf(struct tplg_pre_processor *tplg_pp, snd_conf
 			continue;
 
 		/* regex matched. now include the conf file */
-		snd_config_get_string(n, &filename);
+		ret = snd_config_get_string(n, &filename);
+		if (ret < 0)
+			goto err;
 
-		if (alsa_dir)
-			full_path = tplg_snprintf("%s/%s", alsa_dir, filename);
+		if (filename && filename[0] != '/')
+			full_path = tplg_snprintf("%s/%s", inc_path, filename);
 		else
-			full_path = tplg_snprintf("%s", alsa_dir);
+			full_path = tplg_snprintf("%s", filename);
 
 		ret = snd_input_stdio_open(&in, full_path, "r");
-		free(full_path);
 		if (ret < 0) {
-			fprintf(stderr, "Unable to open included conf file %s\n", filename);
+			fprintf(stderr, "Unable to open included conf file %s\n", full_path);
+			free(full_path);
 			goto err;
 		}
+		free(full_path);
 
 		/* load config */
 		ret = snd_config_load(*new, in);
+		snd_input_close(in);
 		if (ret < 0) {
 			fprintf(stderr, "Unable to load included configuration\n");
 			goto err;
@@ -418,7 +422,7 @@ static int pre_process_include_conf(struct tplg_pre_processor *tplg_pp, snd_conf
 		}
 
 		/* recursively process any nested includes */
-		return pre_process_includes(tplg_pp, *new, pre_processor_defs);
+		return pre_process_includes(tplg_pp, *new, pre_processor_defs, inc_path);
 	}
 
 err:
@@ -427,7 +431,7 @@ err:
 }
 
 static int pre_process_includes(struct tplg_pre_processor *tplg_pp, snd_config_t *top,
-				const char *pre_processor_defs)
+				const char *pre_processor_defs, const char *inc_path)
 {
 	snd_config_iterator_t i, next;
 	snd_config_t *includes, *conf_defines;
@@ -460,7 +464,7 @@ static int pre_process_includes(struct tplg_pre_processor *tplg_pp, snd_config_t
 		}
 
 		/* create conf node from included file */
-		ret = pre_process_include_conf(tplg_pp, n, pre_processor_defs, &new, define);
+		ret = pre_process_include_conf(tplg_pp, n, pre_processor_defs, &new, define, inc_path);
 		if (ret < 0) {
 			fprintf(stderr, "Unable to process include file \n");
 			return ret;
@@ -481,7 +485,7 @@ static int pre_process_includes(struct tplg_pre_processor *tplg_pp, snd_config_t
 }
 
 static int pre_process_includes_all(struct tplg_pre_processor *tplg_pp, snd_config_t *top,
-				const char *pre_processor_defs)
+				const char *pre_processor_defs, const char *inc_path)
 {
 	snd_config_iterator_t i, next;
 	int ret;
@@ -490,7 +494,7 @@ static int pre_process_includes_all(struct tplg_pre_processor *tplg_pp, snd_conf
 		return 0;
 
 	/* process includes at this node */
-	ret = pre_process_includes(tplg_pp, top, pre_processor_defs);
+	ret = pre_process_includes(tplg_pp, top, pre_processor_defs, inc_path);
 	if (ret < 0) {
 		fprintf(stderr, "Failed to process includes\n");
 		return ret;
@@ -502,7 +506,7 @@ static int pre_process_includes_all(struct tplg_pre_processor *tplg_pp, snd_conf
 
 		n = snd_config_iterator_entry(i);
 
-		ret = pre_process_includes_all(tplg_pp, n, pre_processor_defs);
+		ret = pre_process_includes_all(tplg_pp, n, pre_processor_defs, inc_path);
 		if (ret < 0)
 			return ret;
 	}
@@ -511,7 +515,7 @@ static int pre_process_includes_all(struct tplg_pre_processor *tplg_pp, snd_conf
 }
 
 int pre_process(struct tplg_pre_processor *tplg_pp, char *config, size_t config_size,
-		const char *pre_processor_defs)
+		const char *pre_processor_defs, const char *inc_path)
 {
 	snd_input_t *in;
 	snd_config_t *top;
@@ -546,7 +550,7 @@ int pre_process(struct tplg_pre_processor *tplg_pp, char *config, size_t config_
 	}
 
 	/* include conditional conf files */
-	err = pre_process_includes_all(tplg_pp, tplg_pp->input_cfg, pre_processor_defs);
+	err = pre_process_includes_all(tplg_pp, tplg_pp->input_cfg, pre_processor_defs, inc_path);
 	if (err < 0) {
 		fprintf(stderr, "Failed to process conditional includes in input config\n");
 		goto err;
diff --git a/topology/topology.c b/topology/topology.c
index 4a0750f..0c36e7c 100644
--- a/topology/topology.c
+++ b/topology/topology.c
@@ -233,13 +233,22 @@ static int dump(const char *source_file, const char *output_file, int cflags, in
 	return err;
 }
 
+static char *get_inc_path(const char *filename)
+{
+	const char *s = strrchr(filename, '/');
+	char *r = strdup(filename);
+	if (r && s)
+		r[s - filename] = '\0';
+	return r;
+}
+
 /* Convert Topology2.0 conf to the existing conf syntax */
 static int pre_process_conf(const char *source_file, const char *output_file,
 			    const char *pre_processor_defs)
 {
 	struct tplg_pre_processor *tplg_pp;
 	size_t config_size;
-	char *config;
+	char *config, *inc_path;
 	int err;
 
 	err = load(source_file, (void **)&config, &config_size);
@@ -247,7 +256,7 @@ static int pre_process_conf(const char *source_file, const char *output_file,
 		return err;
 
 	/* init pre-processor */
-	err = init_pre_precessor(&tplg_pp, SND_OUTPUT_STDIO, output_file);
+	err = init_pre_processor(&tplg_pp, SND_OUTPUT_STDIO, output_file);
 	if (err < 0) {
 		fprintf(stderr, _("failed to init pre-processor for Topology2.0\n"));
 		free(config);
@@ -255,7 +264,9 @@ static int pre_process_conf(const char *source_file, const char *output_file,
 	}
 
 	/* pre-process conf file */
-	err = pre_process(tplg_pp, config, config_size, pre_processor_defs);
+	inc_path = get_inc_path(source_file);
+	err = pre_process(tplg_pp, config, config_size, pre_processor_defs, inc_path);
+	free(inc_path);
 
 	/* free pre-processor */
 	free_pre_preprocessor(tplg_pp);
@@ -268,7 +279,7 @@ static int compile(const char *source_file, const char *output_file, int cflags,
 {
 	struct tplg_pre_processor *tplg_pp = NULL;
 	snd_tplg_t *tplg;
-	char *config;
+	char *config, *inc_path;
 	void *bin;
 	size_t config_size, size;
 	int err;
@@ -283,10 +294,12 @@ static int compile(const char *source_file, const char *output_file, int cflags,
 		size_t size;
 
 		/* init pre-processor */
-		init_pre_precessor(&tplg_pp, SND_OUTPUT_BUFFER, NULL);
+		init_pre_processor(&tplg_pp, SND_OUTPUT_BUFFER, NULL);
 
 		/* pre-process conf file */
-		err = pre_process(tplg_pp, config, config_size, pre_processor_defs);
+		inc_path = get_inc_path(source_file);
+		err = pre_process(tplg_pp, config, config_size, pre_processor_defs, inc_path);
+		free(inc_path);
 		if (err) {
 			free_pre_preprocessor(tplg_pp);
 			free(config);
diff --git a/topology/topology.h b/topology/topology.h
index 5dd9b1f..11ee64e 100644
--- a/topology/topology.h
+++ b/topology/topology.h
@@ -28,8 +28,8 @@ struct tplg_pre_processor {
 };
 
 int pre_process(struct tplg_pre_processor *tplg_pp, char *config, size_t config_size,
-		const char *pre_processor_defs);
-int init_pre_precessor(struct tplg_pre_processor **tplg_pp, snd_output_type_t type,
+		const char *pre_processor_defs, const char *inc_path);
+int init_pre_processor(struct tplg_pre_processor **tplg_pp, snd_output_type_t type,
 		       const char *output_file);
 void free_pre_preprocessor(struct tplg_pre_processor *tplg_pp);
 #endif