diff --git a/compose/config/config.py b/compose/config/config.py
index 369143311b..c716393d45 100644
--- a/compose/config/config.py
+++ b/compose/config/config.py
@@ -76,6 +76,13 @@ ALLOWED_KEYS = DOCKER_CONFIG_KEYS + [
     'external_links',
 ]
 
+DOCKER_VALID_URL_PREFIXES = (
+    'http://',
+    'https://',
+    'git://',
+    'github.com/',
+    'git@',
+)
 
 SUPPORTED_FILENAMES = [
     'docker-compose.yml',
@@ -377,7 +384,7 @@ def process_service(service_config):
         service_dict['volumes'] = resolve_volume_paths(working_dir, service_dict)
 
     if 'build' in service_dict:
-        service_dict['build'] = expand_path(working_dir, service_dict['build'])
+        service_dict['build'] = resolve_build_path(working_dir, service_dict['build'])
 
     if 'labels' in service_dict:
         service_dict['labels'] = parse_labels(service_dict['labels'])
@@ -539,11 +546,26 @@ def resolve_volume_path(working_dir, volume):
         return container_path
 
 
+def resolve_build_path(working_dir, build_path):
+    if is_url(build_path):
+        return build_path
+    return expand_path(working_dir, build_path)
+
+
+def is_url(build_path):
+    return build_path.startswith(DOCKER_VALID_URL_PREFIXES)
+
+
 def validate_paths(service_dict):
     if 'build' in service_dict:
         build_path = service_dict['build']
-        if not os.path.exists(build_path) or not os.access(build_path, os.R_OK):
-            raise ConfigurationError("build path %s either does not exist or is not accessible." % build_path)
+        if (
+            not is_url(build_path) and
+            (not os.path.exists(build_path) or not os.access(build_path, os.R_OK))
+        ):
+            raise ConfigurationError(
+                "build path %s either does not exist, is not accessible, "
+                "or is not a valid URL." % build_path)
 
 
 def merge_path_mappings(base, override):
diff --git a/docs/compose-file.md b/docs/compose-file.md
index 51d1f5e1aa..800d2aa989 100644
--- a/docs/compose-file.md
+++ b/docs/compose-file.md
@@ -31,15 +31,18 @@ definition.
 
 ### build
 
-Path to a directory containing a Dockerfile. When the value supplied is a
-relative path, it is interpreted as relative to the location of the yml file
-itself. This directory is also the build context that is sent to the Docker daemon.
+Either a path to a directory containing a Dockerfile, or a url to a git repository.
+
+When the value supplied is a relative path, it is interpreted as relative to the
+location of the Compose file. This directory is also the build context that is
+sent to the Docker daemon.
 
 Compose will build and tag it with a generated name, and use that image thereafter.
 
     build: /path/to/build/dir
 
-Using `build` together with `image` is not allowed. Attempting to do so results in an error.
+Using `build` together with `image` is not allowed. Attempting to do so results in
+an error.
 
 ### cap_add, cap_drop
 
diff --git a/tests/integration/service_test.py b/tests/integration/service_test.py
index 5dd3d2e68a..b03baac595 100644
--- a/tests/integration/service_test.py
+++ b/tests/integration/service_test.py
@@ -507,6 +507,13 @@ class ServiceTest(DockerClientTestCase):
         self.create_service('web', build=text_type(base_dir)).build()
         self.assertEqual(len(self.client.images(name='composetest_web')), 1)
 
+    def test_build_with_git_url(self):
+        build_url = "https://github.com/dnephin/docker-build-from-url.git"
+        service = self.create_service('buildwithurl', build=build_url)
+        self.addCleanup(self.client.remove_image, service.image_name)
+        service.build()
+        assert service.image()
+
     def test_start_container_stays_unpriviliged(self):
         service = self.create_service('web')
         container = create_and_start_container(service).inspect()
diff --git a/tests/unit/config/config_test.py b/tests/unit/config/config_test.py
index 2cd26e8f77..e15ac3502f 100644
--- a/tests/unit/config/config_test.py
+++ b/tests/unit/config/config_test.py
@@ -1497,6 +1497,34 @@ class BuildPathTest(unittest.TestCase):
         service_dict = load_from_filename('tests/fixtures/build-path/docker-compose.yml')
         self.assertEquals(service_dict, [{'name': 'foo', 'build': self.abs_context_path}])
 
+    def test_valid_url_in_build_path(self):
+        valid_urls = [
+            'git://github.com/docker/docker',
+            'git@github.com:docker/docker.git',
+            'git@bitbucket.org:atlassianlabs/atlassian-docker.git',
+            'https://github.com/docker/docker.git',
+            'http://github.com/docker/docker.git',
+            'github.com/docker/docker.git',
+        ]
+        for valid_url in valid_urls:
+            service_dict = config.load(build_config_details({
+                'validurl': {'build': valid_url},
+            }, '.', None))
+            assert service_dict[0]['build'] == valid_url
+
+    def test_invalid_url_in_build_path(self):
+        invalid_urls = [
+            'example.com/bogus',
+            'ftp://example.com/',
+            '/path/does/not/exist',
+        ]
+        for invalid_url in invalid_urls:
+            with pytest.raises(ConfigurationError) as exc:
+                config.load(build_config_details({
+                    'invalidurl': {'build': invalid_url},
+                }, '.', None))
+            assert 'build path' in exc.exconly()
+
 
 class GetDefaultConfigFilesTestCase(unittest.TestCase):