diff --git a/test/groovy/PrepareDefaultValuesTest.groovy b/test/groovy/PrepareDefaultValuesTest.groovy
new file mode 100644
index 000000000..0ae67d65e
--- /dev/null
+++ b/test/groovy/PrepareDefaultValuesTest.groovy
@@ -0,0 +1,122 @@
+import org.junit.Before
+import org.junit.Rule;
+import org.junit.Test
+import org.junit.rules.ExpectedException
+import org.junit.rules.RuleChain;
+
+import com.sap.piper.DefaultValueCache
+
+import util.BasePiperTest
+import util.JenkinsLoggingRule
+import util.JenkinsShellCallRule
+import util.JenkinsStepRule;
+import util.Rules
+
+public class PrepareDefaultValuesTest extends BasePiperTest {
+
+    private JenkinsStepRule jsr = new JenkinsStepRule(this)
+    private JenkinsLoggingRule jlr = new JenkinsLoggingRule(this)
+    private ExpectedException thrown = ExpectedException.none()
+
+    @Rule
+    public RuleChain ruleChain = Rules
+        .getCommonRules(this)
+        .around(thrown)
+        .around(jsr)
+        .around(jlr)
+
+    @Before
+    public void setup() {
+
+        helper.registerAllowedMethod("libraryResource", [String], { fileName-> return fileName })
+        helper.registerAllowedMethod("readYaml", [Map], { m ->
+            switch(m.text) {
+                case 'default_pipeline_environment.yml': return [default: 'config']
+                case 'custom.yml': return [custom: 'myConfig']
+                case 'not_found': throw new hudson.AbortException('No such library resource not_found could be found')
+                default: return [the:'end']
+            }
+        })
+
+    }
+
+    @Test
+    public void testDefaultPipelineEnvironmentOnly() {
+
+        jsr.step.call(script: nullScript)
+
+        assert DefaultValueCache.getInstance().getDefaultValues().size() == 1
+        assert DefaultValueCache.getInstance().getDefaultValues().default == 'config'
+    }
+
+    @Test
+    public void testReInitializeOnCustomConfig() {
+
+        DefaultValueCache.createInstance([key:'value'])
+
+        // existing instance is dropped in case a custom config is provided.
+        jsr.step.call(script: nullScript, customDefaults: 'custom.yml')
+
+        assert DefaultValueCache.getInstance().getDefaultValues().size() == 2
+        assert DefaultValueCache.getInstance().getDefaultValues().default == 'config'
+        assert DefaultValueCache.getInstance().getDefaultValues().custom == 'myConfig'
+    }
+
+    @Test
+    public void testNoReInitializeWithoutCustomConfig() {
+
+        DefaultValueCache.createInstance([key:'value'])
+
+        jsr.step.call(script: nullScript)
+
+        assert DefaultValueCache.getInstance().getDefaultValues().size() == 1
+        assert DefaultValueCache.getInstance().getDefaultValues().key == 'value'
+    }
+
+    @Test
+    public void testAttemptToLoadNonExistingConfigFile() {
+
+        // Behavior documented here based on reality check
+        thrown.expect(hudson.AbortException.class)
+        thrown.expectMessage('No such library resource not_found could be found')
+
+        jsr.step.call(script: nullScript, customDefaults: 'not_found')
+    }
+
+    @Test
+    public void testDefaultPipelineEnvironmentWithCustomConfigReferencedAsString() {
+
+        jsr.step.call(script: nullScript, customDefaults: 'custom.yml')
+
+        assert DefaultValueCache.getInstance().getDefaultValues().size() == 2
+        assert DefaultValueCache.getInstance().getDefaultValues().default == 'config'
+        assert DefaultValueCache.getInstance().getDefaultValues().custom == 'myConfig'
+    }
+
+    @Test
+    public void testDefaultPipelineEnvironmentWithCustomConfigReferencedAsList() {
+
+        jsr.step.call(script: nullScript, customDefaults: ['custom.yml'])
+
+        assert DefaultValueCache.getInstance().getDefaultValues().size() == 2
+        assert DefaultValueCache.getInstance().getDefaultValues().default == 'config'
+        assert DefaultValueCache.getInstance().getDefaultValues().custom == 'myConfig'
+    }
+
+    @Test
+    public void testAssertNoLogMessageInCaseOfNoAdditionalConfigFiles() {
+
+        jsr.step.call(script: nullScript)
+
+        assert ! jlr.log.contains("Loading configuration file 'default_pipeline_environment.yml'")
+    }
+
+    @Test
+    public void testAssertLogMessageInCaseOfMoreThanOneConfigFile() {
+
+        jsr.step.call(script: nullScript, customDefaults: ['custom.yml'])
+
+        assert jlr.log.contains("Loading configuration file 'default_pipeline_environment.yml'")
+        assert jlr.log.contains("Loading configuration file 'custom.yml'")
+    }
+}
diff --git a/vars/prepareDefaultValues.groovy b/vars/prepareDefaultValues.groovy
index 117ebd4f4..35bd1478a 100644
--- a/vars/prepareDefaultValues.groovy
+++ b/vars/prepareDefaultValues.groovy
@@ -1,9 +1,24 @@
 import com.sap.piper.DefaultValueCache
+import com.sap.piper.MapUtils
 
 def call(Map parameters = [:]) {
     handlePipelineStepErrors (stepName: 'prepareDefaultValues', stepParameters: parameters) {
-        if(!DefaultValueCache.getInstance()) {
-            Map defaultValues  = readYaml text: libraryResource('default_pipeline_environment.yml')
+        if(!DefaultValueCache.getInstance() || parameters.customDefaults) {
+            def defaultValues = [:]
+            def configFileList = ['default_pipeline_environment.yml']
+            def customDefaults = parameters.customDefaults
+
+            if(customDefaults in String)
+                customDefaults = [customDefaults]
+            if(customDefaults in List)
+                configFileList += customDefaults
+            for (def configFileName : configFileList){
+                if(configFileList.size() > 1) echo "Loading configuration file '${configFileName}'"
+                def configuration = readYaml text: libraryResource(configFileName)
+                defaultValues = MapUtils.merge(
+                        MapUtils.pruneNulls(defaultValues),
+                        MapUtils.pruneNulls(configuration))
+            }
             DefaultValueCache.createInstance(defaultValues)
         }
     }
diff --git a/vars/setupCommonPipelineEnvironment.groovy b/vars/setupCommonPipelineEnvironment.groovy
index 355ba4ca1..a74486a2e 100644
--- a/vars/setupCommonPipelineEnvironment.groovy
+++ b/vars/setupCommonPipelineEnvironment.groovy
@@ -4,7 +4,7 @@ def call(Map parameters = [:]) {
 
         def script = parameters.script
 
-        prepareDefaultValues script: script
+        prepareDefaultValues script: script, customDefaults: parameters.customDefaults
 
         String configFile = parameters.get('configFile')