diff --git a/spring-boot/src/main/java/org/springframework/boot/context/listener/ConfigFileApplicationListener.java b/spring-boot/src/main/java/org/springframework/boot/context/listener/ConfigFileApplicationListener.java
index e6943ac13ed..4dbf87f472e 100644
--- a/spring-boot/src/main/java/org/springframework/boot/context/listener/ConfigFileApplicationListener.java
+++ b/spring-boot/src/main/java/org/springframework/boot/context/listener/ConfigFileApplicationListener.java
@@ -87,8 +87,8 @@ public class ConfigFileApplicationListener implements
 
 	private static final String LOCATION_VARIABLE = "${spring.config.location}";
 
-	private String[] searchLocations = new String[] { "classpath:", "file:./",
-			"classpath:config/", "file:./config/" };
+	private String[] searchLocations = new String[] { "classpath:/", "file:./",
+			"classpath:/config/", "file:./config/" };
 
 	private String names = "${spring.config.name:application}";
 
@@ -147,24 +147,39 @@ public class ConfigFileApplicationListener implements
 		PropertySource<?> defaultProperties = environment.getPropertySources().remove(
 				"defaultProperties");
 
+		addActiveProfiles(environment);
 		String firstPropertySourceName = loadInitial(environment, resourceLoader,
 				candidates);
 
-		if (environment.containsProperty(ACTIVE_PROFILES_PROPERTY)) {
-			for (String activeProfile : StringUtils.commaDelimitedListToSet(environment
-					.getProperty(ACTIVE_PROFILES_PROPERTY).toString())) {
-				environment.addActiveProfile(activeProfile);
-			}
+		// Repeatedly load property sources in case additional profiles are activated
+		int numberOfPropertySources;
+		do {
+			numberOfPropertySources = environment.getPropertySources().size();
+			addActiveProfiles(environment);
+			loadAgain(environment, resourceLoader, candidates, firstPropertySourceName);
 		}
-
-		// Second load for specific profiles
-		loadAgain(environment, resourceLoader, candidates, firstPropertySourceName);
+		while (environment.getPropertySources().size() > numberOfPropertySources);
 
 		if (defaultProperties != null) {
 			environment.getPropertySources().addLast(defaultProperties);
 		}
 	}
 
+	/**
+	 * @param environment
+	 */
+	private void addActiveProfiles(ConfigurableEnvironment environment) {
+		for (PropertySource<?> propertySource : environment.getPropertySources()) {
+			if (propertySource.containsProperty(ACTIVE_PROFILES_PROPERTY)) {
+				Object profiles = propertySource.getProperty(ACTIVE_PROFILES_PROPERTY);
+				for (String profile : StringUtils.commaDelimitedListToSet(profiles
+						.toString())) {
+					environment.addActiveProfile(profile);
+				}
+			}
+		}
+	}
+
 	private String loadInitial(ConfigurableEnvironment environment,
 			ResourceLoader resourceLoader, LoadCandidates candidates) {
 		String firstSourceName = null;
diff --git a/spring-boot/src/test/java/org/springframework/boot/ReproTests.java b/spring-boot/src/test/java/org/springframework/boot/ReproTests.java
new file mode 100644
index 00000000000..c347c0d3ffe
--- /dev/null
+++ b/spring-boot/src/test/java/org/springframework/boot/ReproTests.java
@@ -0,0 +1,50 @@
+/*
+ * Copyright 2012-2014 the original author or authors.
+ *
+ * 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.
+ */
+
+package org.springframework.boot;
+
+import org.junit.Test;
+import org.springframework.context.ConfigurableApplicationContext;
+import org.springframework.context.annotation.Configuration;
+
+import static org.hamcrest.Matchers.equalTo;
+import static org.junit.Assert.assertThat;
+
+/**
+ * Tests to reproduce reported issues.
+ * 
+ * @author Phillip Webb
+ */
+public class ReproTests {
+
+	@Test
+	public void enableProfileViaApplicationProperties() throws Exception {
+		// gh-308
+		SpringApplication application = new SpringApplication(Config.class);
+
+		application.setWebEnvironment(false);
+		ConfigurableApplicationContext context = application.run(
+				"--spring.config.name=enableprofileviaapplicationproperties",
+				"--spring.profiles.active=dev");
+		assertThat(context.getEnvironment().acceptsProfiles("dev"), equalTo(true));
+		assertThat(context.getEnvironment().acceptsProfiles("a"), equalTo(true));
+	}
+
+	@Configuration
+	public static class Config {
+
+	}
+}
diff --git a/spring-boot/src/test/java/org/springframework/boot/context/listener/ConfigFileApplicationListenerTests.java b/spring-boot/src/test/java/org/springframework/boot/context/listener/ConfigFileApplicationListenerTests.java
index 76f4cddc424..aacb82f6539 100644
--- a/spring-boot/src/test/java/org/springframework/boot/context/listener/ConfigFileApplicationListenerTests.java
+++ b/spring-boot/src/test/java/org/springframework/boot/context/listener/ConfigFileApplicationListenerTests.java
@@ -186,8 +186,8 @@ public class ConfigFileApplicationListenerTests {
 				"spring.profiles.active:prod");
 		this.initializer.setNames("testsetprofiles");
 		this.initializer.onApplicationEvent(this.event);
-		assertThat(Arrays.asList(this.environment.getActiveProfiles()).toString(),
-				equalTo("[prod]"));
+		assertThat(this.environment.getActiveProfiles(), equalTo(new String[] { "prod",
+				"dev" }));
 	}
 
 	@Test
@@ -212,7 +212,7 @@ public class ConfigFileApplicationListenerTests {
 		// The default property source is still there
 		assertThat(
 				this.environment.getPropertySources().contains(
-						"classpath:application.properties"), is(true));
+						"classpath:/application.properties"), is(true));
 		assertThat(this.environment.getProperty("foo"), equalTo("bucket"));
 	}
 
@@ -347,11 +347,27 @@ public class ConfigFileApplicationListenerTests {
 		context.close();
 	}
 
+	@Test
+	public void activateProfileFromProfileSpecificProperties() throws Exception {
+		SpringApplication application = new SpringApplication(Config.class);
+		application.setWebEnvironment(false);
+		ConfigurableApplicationContext context = application
+				.run("--spring.profiles.active=activateprofile");
+		assertThat(context.getEnvironment().acceptsProfiles("activateprofile"),
+				equalTo(true));
+		assertThat(context.getEnvironment().acceptsProfiles("specific"), equalTo(true));
+	}
+
 	@Test
 	public void defaultApplicationProperties() throws Exception {
 
 	}
 
+	@Configuration
+	protected static class Config {
+
+	}
+
 	@Configuration
 	@PropertySource("classpath:/specificlocation.properties")
 	protected static class WithPropertySource {
diff --git a/spring-boot/src/test/resources/application-activateprofile.properties b/spring-boot/src/test/resources/application-activateprofile.properties
new file mode 100644
index 00000000000..42970aaa301
--- /dev/null
+++ b/spring-boot/src/test/resources/application-activateprofile.properties
@@ -0,0 +1 @@
+spring.profiles.active=specific
diff --git a/spring-boot/src/test/resources/enableprofileviaapplicationproperties.yml b/spring-boot/src/test/resources/enableprofileviaapplicationproperties.yml
new file mode 100644
index 00000000000..afdf33c9b0e
--- /dev/null
+++ b/spring-boot/src/test/resources/enableprofileviaapplicationproperties.yml
@@ -0,0 +1,3 @@
+spring:
+  profiles:
+    active: a
\ No newline at end of file