diff --git a/CHANGELOG.md b/CHANGELOG.md
index effe43e3c..a4532244d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,8 @@
     possible load errors. [GH-781]
   - `vagrant destroy` shows a nice error when called without a
     TTY (and hence can't confirm). [GH-779]
+  - Fix an issue with the `:vagrantfile_name` option to `Vagrant::Environment`
+    not working properly. [GH-778]
 
 ## 1.0.0 (March 6, 2012)
 
diff --git a/lib/vagrant/environment.rb b/lib/vagrant/environment.rb
index ce4b97f2e..f11923ee2 100644
--- a/lib/vagrant/environment.rb
+++ b/lib/vagrant/environment.rb
@@ -59,10 +59,11 @@ module Vagrant
       opts[:cwd] ||= Dir.pwd
       opts[:cwd] = Pathname.new(opts[:cwd])
 
-      # Set the default vagrantfile name, which can be either Vagrantfile
-      # or vagrantfile (capital for backwards compatibility)
-      opts[:vagrantfile_name] ||= ["Vagrantfile", "vagrantfile"]
+      # Set the Vagrantfile name up. We append "Vagrantfile" and "vagrantfile" so that
+      # those continue to work as well, but anything custom will take precedence.
+      opts[:vagrantfile_name] ||= []
       opts[:vagrantfile_name] = [opts[:vagrantfile_name]] if !opts[:vagrantfile_name].is_a?(Array)
+      opts[:vagrantfile_name] += ["Vagrantfile", "vagrantfile"]
 
       # Set instance variables for all the configuration parameters.
       @cwd    = opts[:cwd]
diff --git a/test/unit/support/isolated_environment.rb b/test/unit/support/isolated_environment.rb
index 51beaffc3..c7435ea9a 100644
--- a/test/unit/support/isolated_environment.rb
+++ b/test/unit/support/isolated_environment.rb
@@ -16,6 +16,14 @@ module Unit
       Vagrant::Environment.new(options)
     end
 
+    # This creates a file in the isolated environment. By default this file
+    # will be created in the working directory of the isolated environment.
+    def file(name, contents)
+      @workdir.join(name).open("w+") do |f|
+        f.write(contents)
+      end
+    end
+
     def vagrantfile(contents, root=nil)
       root ||= @workdir
       root.join("Vagrantfile").open("w+") do |f|
diff --git a/test/unit/vagrant/environment_test.rb b/test/unit/vagrant/environment_test.rb
index 738b469e3..4a51047c4 100644
--- a/test/unit/vagrant/environment_test.rb
+++ b/test/unit/vagrant/environment_test.rb
@@ -120,6 +120,19 @@ VF
       env.config.global.vagrant.dotfile_name.should == "foo"
     end
 
+    it "should load from a custom Vagrantfile" do
+      environment = isolated_environment do |env|
+        env.file("non_standard_name", <<-VF)
+Vagrant::Config.run do |config|
+  config.vagrant.dotfile_name = "custom"
+end
+VF
+      end
+
+      env = environment.create_vagrant_env(:vagrantfile_name => "non_standard_name")
+      env.config.global.vagrant.dotfile_name.should == "custom"
+    end
+
     it "should load VM configuration" do
       environment = isolated_environment do |env|
         env.vagrantfile(<<-VF)