File-relative configuration Babel loads .babelrc (and .babelrc.js / .babelrc.cjs / package.json#babel) files by searching up the directory structure starting from the "filename" being compiled (limited by the caveats below). This can be powerful because it allows you to create independent configurations for subsections of a package. File-relative configurations are also merged over top of project-wide config values, making them potentially useful for specific overrides, though that can also be accomplished through "overrides".