diff --git a/examples/mkdocs/docs/images/image1.jpg b/examples/mkdocs/docs/images/image1.jpg
new file mode 100644
index 0000000..202ffb3
Binary files /dev/null and b/examples/mkdocs/docs/images/image1.jpg differ
diff --git a/examples/mkdocs/docs/index.md b/examples/mkdocs/docs/index.md
new file mode 100644
index 0000000..9f5b291
--- /dev/null
+++ b/examples/mkdocs/docs/index.md
@@ -0,0 +1,8 @@
+# Title
+
+This is a simple example of using MKdocs with mkdocs-include. 
+
+{!template/template.md!}
+
+
+{!template/template_2.md!}
\ No newline at end of file
diff --git a/examples/mkdocs/docs/template/some_image.jpg b/examples/mkdocs/docs/template/some_image.jpg
new file mode 100644
index 0000000..66e6f9f
Binary files /dev/null and b/examples/mkdocs/docs/template/some_image.jpg differ
diff --git a/examples/mkdocs/docs/template/template.md b/examples/mkdocs/docs/template/template.md
new file mode 100644
index 0000000..245c536
--- /dev/null
+++ b/examples/mkdocs/docs/template/template.md
@@ -0,0 +1 @@
+![some_image.jpg](some_image.jpg)
\ No newline at end of file
diff --git a/examples/mkdocs/docs/template/template_2.md b/examples/mkdocs/docs/template/template_2.md
new file mode 100644
index 0000000..3bfd5e9
--- /dev/null
+++ b/examples/mkdocs/docs/template/template_2.md
@@ -0,0 +1 @@
+![some_image.jpg](../images/image1.jpg)
\ No newline at end of file
diff --git a/examples/mkdocs/mkdocs.yml b/examples/mkdocs/mkdocs.yml
new file mode 100644
index 0000000..bf63a93
--- /dev/null
+++ b/examples/mkdocs/mkdocs.yml
@@ -0,0 +1,5 @@
+site_name: Example markdown-include
+
+markdown_extensions:
+  - markdown_include.include:
+      base_path: docs
diff --git a/markdown_include/include.py b/markdown_include/include.py
index e4b18bf..7de08c7 100644
--- a/markdown_include/include.py
+++ b/markdown_include/include.py
@@ -30,6 +30,7 @@
 
 INC_SYNTAX = re.compile(r"{!\s*(.+?)\s*!((\blines\b)=([0-9 -]+))?\}")
 HEADING_SYNTAX = re.compile("^#+")
+LINK_SYNTAX = re.compile("(!|)\[[^]]+]\(([^)]+)\)")
 
 
 class MarkdownInclude(Extension):
@@ -99,8 +100,8 @@ def run(self, lines):
                 m = INC_SYNTAX.search(line)
 
                 while m:
-                    filename = m.group(1)
-                    filename = os.path.expanduser(filename)
+                    relative_filename = m.group(1)
+                    filename = os.path.expanduser(relative_filename)
                     if not os.path.isabs(filename):
                         filename = os.path.normpath(
                             os.path.join(self.base_path, filename)
@@ -170,6 +171,12 @@ def run(self, lines):
                                 text[i] = bonusHeading + text[i]
                             if self.headingOffset:
                                 text[i] = "#" * self.headingOffset + text[i]
+                        link = LINK_SYNTAX.search(text[i])
+                        if link:
+                            raw_path = link.group(2)
+                            if not raw_path.startswith("http"):
+                                path_ = f"{os.path.dirname(relative_filename)}{os.path.sep}{raw_path}"
+                                text[i] = text[i][:link.start(2)] + path_ + text[i][link.end(2):]
 
                         text[i] = text[i].rstrip("\r\n")
                     text_to_insert = "\r\n".join(text)
diff --git a/tests/resources/docs/images/image1.jpg b/tests/resources/docs/images/image1.jpg
new file mode 100644
index 0000000..202ffb3
Binary files /dev/null and b/tests/resources/docs/images/image1.jpg differ
diff --git a/tests/resources/docs/template/some_image.jpg b/tests/resources/docs/template/some_image.jpg
new file mode 100644
index 0000000..66e6f9f
Binary files /dev/null and b/tests/resources/docs/template/some_image.jpg differ
diff --git a/tests/resources/docs/template/template.md b/tests/resources/docs/template/template.md
new file mode 100644
index 0000000..245c536
--- /dev/null
+++ b/tests/resources/docs/template/template.md
@@ -0,0 +1 @@
+![some_image.jpg](some_image.jpg)
\ No newline at end of file
diff --git a/tests/resources/docs/template/template_2.md b/tests/resources/docs/template/template_2.md
new file mode 100644
index 0000000..3bfd5e9
--- /dev/null
+++ b/tests/resources/docs/template/template_2.md
@@ -0,0 +1 @@
+![some_image.jpg](../images/image1.jpg)
\ No newline at end of file
diff --git a/tests/resources/with_img_link.md b/tests/resources/with_img_link.md
new file mode 100644
index 0000000..7448962
--- /dev/null
+++ b/tests/resources/with_img_link.md
@@ -0,0 +1 @@
+![some link](https://google.com)
\ No newline at end of file
diff --git a/tests/resources/with_link.md b/tests/resources/with_link.md
new file mode 100644
index 0000000..e13c0c5
--- /dev/null
+++ b/tests/resources/with_link.md
@@ -0,0 +1 @@
+[some link](https://google.com)
\ No newline at end of file
diff --git a/tests/test_include.py b/tests/test_include.py
index eb2da12..6f5dfe7 100644
--- a/tests/test_include.py
+++ b/tests/test_include.py
@@ -6,7 +6,6 @@
 
 import pytest
 
-
 RESOURCE_DIR = pathlib.Path(__file__).parent.absolute() / "resources"
 
 
@@ -22,6 +21,33 @@ def markdown_include_inherit_heading_depth():
     )
 
 
+def test_relative_path(markdown_include):
+    source = "{!docs/template/template.md!}"
+    html = markdown.markdown(source, extensions=[markdown_include])
+
+    assert html == "<p><img alt=\"some_image.jpg\" src=\"docs/template/some_image.jpg\" /></p>"
+
+
+def test_relative_path_parent(markdown_include):
+    source = "{!docs/template/template_2.md!}"
+    html = markdown.markdown(source, extensions=[markdown_include])
+
+    assert html == "<p><img alt=\"some_image.jpg\" src=\"docs/template/../images/image1.jpg\" /></p>"
+
+
+def test_relative_path_url_link(markdown_include):
+    source = "{!with_link.md!}"
+    html = markdown.markdown(source, extensions=[markdown_include])
+
+    assert html == "<p><a href=\"https://google.com\">some link</a></p>"
+
+def test_relative_path_img_url_link(markdown_include):
+    source = "{!with_img_link.md!}"
+    html = markdown.markdown(source, extensions=[markdown_include])
+
+    assert html == "<p><img alt=\"some link\" src=\"https://google.com\" /></p>"
+
+
 def test_single_include(markdown_include):
     source = "{!simple.md!}"
     html = markdown.markdown(source, extensions=[markdown_include])
@@ -34,7 +60,7 @@ def test_double_include(markdown_include):
     html = markdown.markdown(source, extensions=[markdown_include])
 
     assert (
-        html == "<p>This is a simple template and This is another simple template</p>"
+            html == "<p>This is a simple template and This is another simple template</p>"
     )
 
 
@@ -68,8 +94,8 @@ def test_embedded_template(markdown_include):
     html = markdown.markdown(source, extensions=[markdown_include])
 
     assert (
-        html
-        == "<p>This is a simple template</p>\n<p>This is a template with a template.</p>"
+            html
+            == "<p>This is a simple template</p>\n<p>This is a template with a template.</p>"
     )
 
 
@@ -89,7 +115,7 @@ def test_double_include_inherit_heading_depth(markdown_include_inherit_heading_d
     )
 
     assert (
-        html == "<p>This is a simple template and This is another simple template</p>"
+            html == "<p>This is a simple template and This is another simple template</p>"
     )