diff --git a/Cargo.lock b/Cargo.lock
index ad6377d..4d09dc1 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -74,6 +74,15 @@ dependencies = [
  "windows-sys 0.52.0",
 ]
 
+[[package]]
+name = "atomic"
+version = "0.6.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "8d818003e740b63afc82337e3160717f4f63078720a810b7b903e70a5d1d2994"
+dependencies = [
+ "bytemuck",
+]
+
 [[package]]
 name = "backtrace"
 version = "0.3.69"
@@ -129,6 +138,12 @@ dependencies = [
  "serde",
 ]
 
+[[package]]
+name = "bytemuck"
+version = "1.14.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "374d28ec25809ee0e23827c2ab573d729e293f281dfe393500e7ad618baa61c6"
+
 [[package]]
 name = "cc"
 version = "1.0.83"
@@ -270,6 +285,20 @@ dependencies = [
  "windows-sys 0.52.0",
 ]
 
+[[package]]
+name = "figment"
+version = "0.10.13"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "7629b8c7bcd214a072c2c88b263b5bb3ceb54c34365d8c41c1665461aeae0993"
+dependencies = [
+ "atomic",
+ "pear",
+ "serde",
+ "toml",
+ "uncased",
+ "version_check",
+]
+
 [[package]]
 name = "form_urlencoded"
 version = "1.2.1"
@@ -403,6 +432,12 @@ dependencies = [
  "hashbrown",
 ]
 
+[[package]]
+name = "inlinable_string"
+version = "0.1.15"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "c8fae54786f62fb2918dcfae3d568594e50eb9b5c25bf04371af6fe7516452fb"
+
 [[package]]
 name = "is-terminal"
 version = "0.4.9"
@@ -603,6 +638,29 @@ version = "3.5.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "c1b04fb49957986fdce4d6ee7a65027d55d4b6d2265e5848bbb507b58ccfdb6f"
 
+[[package]]
+name = "pear"
+version = "0.2.8"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "4ccca0f6c17acc81df8e242ed473ec144cbf5c98037e69aa6d144780aad103c8"
+dependencies = [
+ "inlinable_string",
+ "pear_codegen",
+ "yansi",
+]
+
+[[package]]
+name = "pear_codegen"
+version = "0.2.8"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "2e22670e8eb757cff11d6c199ca7b987f352f0346e0be4dd23869ec72cb53c77"
+dependencies = [
+ "proc-macro2",
+ "proc-macro2-diagnostics",
+ "quote",
+ "syn",
+]
+
 [[package]]
 name = "percent-encoding"
 version = "2.3.1"
@@ -679,6 +737,19 @@ dependencies = [
  "unicode-ident",
 ]
 
+[[package]]
+name = "proc-macro2-diagnostics"
+version = "0.10.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "af066a9c399a26e020ada66a034357a868728e72cd426f3adcd35f80d88d88c8"
+dependencies = [
+ "proc-macro2",
+ "quote",
+ "syn",
+ "version_check",
+ "yansi",
+]
+
 [[package]]
 name = "quote"
 version = "1.0.35"
@@ -819,6 +890,7 @@ version = "0.1.0"
 dependencies = [
  "clap",
  "dirs",
+ "figment",
  "git2",
  "globset",
  "handlebars",
@@ -1005,6 +1077,15 @@ version = "0.1.6"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "ed646292ffc8188ef8ea4d1e0e0150fb15a5c2e12ad9b8fc191ae7a8a7f3c4b9"
 
+[[package]]
+name = "uncased"
+version = "0.9.9"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "9b9bc53168a4be7402ab86c3aad243a84dd7381d09be0eddc81280c1da95ca68"
+dependencies = [
+ "version_check",
+]
+
 [[package]]
 name = "unicode-bidi"
 version = "0.3.14"
@@ -1244,3 +1325,9 @@ checksum = "b7520bbdec7211caa7c4e682eb1fbe07abe20cee6756b6e00f537c82c11816aa"
 dependencies = [
  "memchr",
 ]
+
+[[package]]
+name = "yansi"
+version = "1.0.0-rc.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "1367295b8f788d371ce2dbc842c7b709c73ee1364d30351dd300ec2203b12377"
diff --git a/Cargo.toml b/Cargo.toml
index b597398..b2e2fc5 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -8,6 +8,7 @@ edition = "2021"
 [dependencies]
 clap = { version = "4.4.14", features = ["derive", "env"] }
 dirs = "5.0.1"
+figment = { version = "0.10.13", features = ["toml", "env"] }
 git2 = "0.18.1"
 globset = { version = "0.4.14", features = ["serde", "serde1"] }
 handlebars = "5.0.0"
diff --git a/src/config.rs b/src/config.rs
new file mode 100644
index 0000000..143ef88
--- /dev/null
+++ b/src/config.rs
@@ -0,0 +1,40 @@
+use std::{collections::HashMap, path::Path};
+
+use figment::{
+    providers::{Env, Format, Serialized, Toml},
+    Figment,
+};
+use miette::{Context, IntoDiagnostic, Result};
+use serde::{Deserialize, Serialize};
+
+#[derive(Clone, Debug, Deserialize, Serialize)]
+pub struct SiloConfig {
+    /// Diff tool used to display file differences
+    pub diff_tool: String,
+    /// Context values for handlebars that are available globally under the `ctx` variable
+    pub template_context: HashMap<String, toml::Value>,
+}
+
+impl Default for SiloConfig {
+    fn default() -> Self {
+        Self {
+            diff_tool: String::from("diff"),
+            template_context: HashMap::new(),
+        }
+    }
+}
+
+/// Read the configuration file from the user config directory
+/// with overrides from the `repo.toml` file
+/// and the `repo.local.toml` config file
+/// and environment variables prefixed with `SILO_``
+pub fn read_config(repo: &Path) -> Result<SiloConfig> {
+    Figment::from(Serialized::defaults(SiloConfig::default()))
+        .merge(Toml::file(dirs::config_dir().unwrap().join("silo.toml")))
+        .merge(Toml::file(repo.join("repo.toml")))
+        .merge(Toml::file(repo.join("repo.local.toml")))
+        .merge(Env::prefixed("SILO_"))
+        .extract()
+        .into_diagnostic()
+        .context("parsing config file")
+}
diff --git a/src/main.rs b/src/main.rs
index e5126fb..76517ef 100644
--- a/src/main.rs
+++ b/src/main.rs
@@ -6,6 +6,7 @@ use miette::{Context, IntoDiagnostic, Result};
 use repo::SiloRepo;
 
 mod args;
+mod config;
 mod repo;
 mod templating;
 
@@ -17,9 +18,11 @@ fn main() -> Result<()> {
         args::Command::Init => init(&args)?,
         args::Command::Apply => apply(&args)?,
         args::Command::Context => {
+            let repo = SiloRepo::open(&args.repo)?;
             println!(
                 "{}",
-                serde_json::to_string_pretty(templating::context()).into_diagnostic()?
+                serde_json::to_string_pretty(&templating::context(repo.config.template_context))
+                    .into_diagnostic()?
             )
         }
         args::Command::Repo => {
@@ -59,6 +62,10 @@ fn init(args: &Args) -> Result<()> {
     let _gitrepo = git2::Repository::init(&args.repo)
         .into_diagnostic()
         .with_context(|| format!("initializing repository at {:?}", args.repo))?;
+    fs::write(args.repo.join(".gitignore"), "repo.local.toml\n")
+        .into_diagnostic()
+        .context("adding default .gitignore")?;
+
     log::info!("Repo initialized at {:?}", args.repo);
 
     Ok(())
diff --git a/src/repo.rs b/src/repo.rs
index 6b81d2f..ff32476 100644
--- a/src/repo.rs
+++ b/src/repo.rs
@@ -8,12 +8,16 @@ use std::{
     rc::Rc,
 };
 
-use crate::templating;
+use crate::{
+    config::{read_config, SiloConfig},
+    templating,
+};
 use lazy_static::lazy_static;
 
 #[derive(Clone, Debug)]
 pub struct SiloRepo {
     pub root: DirEntry,
+    pub config: SiloConfig,
 }
 
 impl SiloRepo {
@@ -23,6 +27,7 @@ impl SiloRepo {
         }
 
         Ok(Self {
+            config: read_config(path)?,
             root: DirEntry::parse(Rc::new(ParseContext::default()), path.to_owned())?,
         })
     }
@@ -31,7 +36,10 @@ impl SiloRepo {
         let cwd = env::current_dir()
             .into_diagnostic()
             .context("get current dir")?;
-        self.root.apply(&cwd)
+        let ctx = ApplyContext {
+            config: self.config.clone(),
+        };
+        self.root.apply(&ctx, &cwd)
     }
 }
 
@@ -53,6 +61,10 @@ impl Default for ParseContext {
     }
 }
 
+pub struct ApplyContext {
+    config: SiloConfig,
+}
+
 lazy_static! {
     static ref IGNORED_PATHS: GlobSet = GlobSetBuilder::new()
         .add(Glob::new("**/.git").unwrap())
@@ -118,9 +130,9 @@ impl DirEntry {
         }
     }
 
-    fn apply(&self, cwd: &Path) -> Result<()> {
+    fn apply(&self, ctx: &ApplyContext, cwd: &Path) -> Result<()> {
         match self {
-            DirEntry::File(file) => file.apply(cwd),
+            DirEntry::File(file) => file.apply(ctx, cwd),
             DirEntry::Dir(p, children) => {
                 let cwd = if p != cwd {
                     let cwd = cwd.join(p.file_name().unwrap());
@@ -135,14 +147,17 @@ impl DirEntry {
                     p.to_owned()
                 };
                 for child in children {
-                    child.apply(&cwd)?;
+                    child.apply(ctx, &cwd)?;
                 }
                 Ok(())
             }
             DirEntry::Root(_, data, children) => {
                 let engine = templating::engine();
                 let rendered_path = engine
-                    .render_template(&data.path, templating::context())
+                    .render_template(
+                        &data.path,
+                        &templating::context(&ctx.config.template_context),
+                    )
                     .into_diagnostic()
                     .with_context(|| format!("render template {}", data.path))?;
 
@@ -155,7 +170,7 @@ impl DirEntry {
                         .with_context(|| format!("Creating directory {cwd:?}"))?;
                 }
                 for child in children {
-                    child.apply(&cwd)?;
+                    child.apply(ctx, &cwd)?;
                 }
                 Ok(())
             }
@@ -180,14 +195,17 @@ impl FileEntry {
         }
     }
 
-    fn apply(&self, cwd: &Path) -> Result<()> {
+    fn apply(&self, ctx: &ApplyContext, cwd: &Path) -> Result<()> {
         match self {
             FileEntry::Template(path) => {
                 log::debug!("Processing template {path:?}");
                 let contents = fs::read_to_string(path).into_diagnostic()?;
 
                 let rendered = templating::engine()
-                    .render_template(&contents, templating::context())
+                    .render_template(
+                        &contents,
+                        &templating::context(&ctx.config.template_context),
+                    )
                     .into_diagnostic()
                     .with_context(|| format!("rendering template {path:?}"))?;
 
@@ -237,7 +255,7 @@ impl RootDirData {
             .into_diagnostic()
             .with_context(|| format!("reading metadata file {path:?}"))?;
         let rendered = templating::engine()
-            .render_template(&contents, templating::context())
+            .render_template(&contents, &templating::context(()))
             .into_diagnostic()
             .with_context(|| format!("processing template {path:?}"))?;
         toml::from_str(&rendered)
diff --git a/src/templating.rs b/src/templating.rs
index 1f0feb3..b462965 100644
--- a/src/templating.rs
+++ b/src/templating.rs
@@ -11,11 +11,18 @@ pub fn engine<'a>() -> Handlebars<'a> {
     hb
 }
 
-pub fn context<'a>() -> &'a ContextData {
+pub fn context<'a, T: Serialize>(ctx: T) -> WrappedContext<'a, T> {
     lazy_static! {
         static ref CTX: ContextData = ContextData::default();
     }
-    &*CTX
+    WrappedContext { data: &*CTX, ctx }
+}
+
+#[derive(Serialize)]
+pub struct WrappedContext<'a, T: Serialize> {
+    #[serde(flatten)]
+    data: &'a ContextData,
+    ctx: T,
 }
 
 #[derive(Clone, Debug, Serialize, Default)]