diff --git a/gabbi/case.py b/gabbi/case.py
index 63dfb82..f145e7d 100644
--- a/gabbi/case.py
+++ b/gabbi/case.py
@@ -243,7 +243,13 @@ class HTTPTestCase(testtools.TestCase):
 
     def _load_data_file(self, filename):
         """Read a file from the current test directory."""
-        path = os.path.join(self.test_directory, os.path.basename(filename))
+        path = os.path.join(self.test_directory, filename)
+        has_dir_traversal = os.path.relpath(
+            path, start=self.test_directory).startswith(os.pardir)
+        if has_dir_traversal:
+            raise ValueError(
+                'Attempted loading of data file outside test directory: %s'
+                % filename)
         with open(path, mode='rb') as data_file:
             return data_file.read()
 
diff --git a/gabbi/tests/test_load_data_file.py b/gabbi/tests/test_load_data_file.py
new file mode 100644
index 0000000..83f9451
--- /dev/null
+++ b/gabbi/tests/test_load_data_file.py
@@ -0,0 +1,76 @@
+#
+# Licensed under the Apache License, Version 2.0 (the "License"); you may
+# not use this file except in compliance with the License. You may obtain
+# a copy of the License at
+#
+#      http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+# WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+# License for the specific language governing permissions and limitations
+# under the License.
+"""Test loading data from files with <@.
+"""
+
+import unittest
+
+from gabbi import case
+from six.moves import mock
+
+
+@mock.patch(
+    'gabbi.case.open',
+    new_callable=mock.mock_open,
+    read_data='dummy content'
+)
+class DataFileTest(unittest.TestCase):
+    """Reading from local file is only allowed at or below the
+    test_directory level.
+    """
+
+    def setUp(self):
+        self.http_case = case.HTTPTestCase('test_request')
+
+    def _assert_content_read(self, filepath):
+        self.assertEqual(
+            'dummy content', self.http_case._load_data_file(filepath))
+
+    def test_load_file(self, m_open):
+        self.http_case.test_directory = '.'
+        self._assert_content_read('data.json')
+        m_open.assert_called_with('./data.json', mode='rb')
+
+    def test_load_file_in_directory(self, m_open):
+        self.http_case.test_directory = '.'
+        self._assert_content_read('a/b/c/data.json')
+        m_open.assert_called_with('./a/b/c/data.json', mode='rb')
+
+    def test_load_file_in_root(self, m_open):
+        self.http_case.test_directory = '.'
+        filepath = '/top-level.private'
+
+        with self.assertRaises(ValueError):
+            self.http_case._load_data_file(filepath)
+        self.assertFalse(m_open.called)
+
+    def test_load_file_in_parent_dir(self, m_open):
+        self.http_case.test_directory = '.'
+        filepath = '../file-in-parent-dir.txt'
+
+        with self.assertRaises(ValueError):
+            self.http_case._load_data_file(filepath)
+        self.assertFalse(m_open.called)
+
+    def test_load_file_within_test_directory(self, m_open):
+        self.http_case.test_directory = '/a/b/c'
+        self._assert_content_read('../../b/c/file-in-test-dir.txt')
+        m_open.assert_called_with(
+            '/a/b/c/../../b/c/file-in-test-dir.txt', mode='rb')
+
+    def test_load_file_not_within_test_directory(self, m_open):
+        self.http_case.test_directory = '/a/b/c'
+        filepath = '../../b/E/file-in-test-dir.txt'
+        with self.assertRaises(ValueError):
+            self.http_case._load_data_file(filepath)
+        self.assertFalse(m_open.called)