diff --git a/remix-tests/src/compiler.ts b/remix-tests/src/compiler.ts
index ae48a8c097..3d9b297479 100644
--- a/remix-tests/src/compiler.ts
+++ b/remix-tests/src/compiler.ts
@@ -21,6 +21,32 @@ function writeTestAccountsContract (accounts: string[]) {
     return testAccountContract.replace('>accounts<', body)
 }
 
+function processFile(filePath: string, sources: any, isRoot: boolean = false) {
+    try{
+        const importRegEx = /import ['"](.+?)['"];/g;
+        let group: any ='';
+        if(filePath.includes('tests.sol') || filePath.includes('remix_tests.sol') || filePath.includes('remix_accounts.sol') || Object.keys(sources).includes(filePath))
+            return
+
+        let content = fs.readFileSync(filePath, { encoding: 'utf-8' });
+        const s = /^(import)\s['"](remix_tests.sol|tests.sol)['"];/gm
+        if (isRoot && filePath.indexOf('_test.sol') > 0 && regexIndexOf(content, s) < 0) {
+            const includeTestLibs = '\nimport \'remix_tests.sol\';\n'
+            content = includeTestLibs.concat(content)
+        }
+        sources[filePath] = {content};
+        importRegEx.exec(''); // Resetting state of RegEx
+        while (group = importRegEx.exec(content)) {
+            const importedFile = group[1];
+            const importedFilePath = path.join(path.dirname(filePath), importedFile);
+            processFile(importedFilePath, sources)
+        }
+    }
+    catch(error){
+      throw error;
+    }
+  };
+
 const userAgent = (typeof (navigator) !== 'undefined') && navigator.userAgent ? navigator.userAgent.toLowerCase() : '-'
 const isBrowser = !(typeof (window) === 'undefined' || userAgent.indexOf(' electron/') > -1)
 
@@ -34,26 +60,23 @@ export function compileFileOrFiles(filename: string, isDirectory: boolean, opts:
         'remix_accounts.sol': { content: writeTestAccountsContract(accounts) }
     }
     const filepath = (isDirectory ? filename : path.dirname(filename))
-    // TODO: for now assumes filepath dir contains all tests, later all this
-    // should be replaced with remix's & browser solidity compiler code
-
-    // This logic is wrong
-    // We should only look into current file if a full file name with path is given
-    // We should only walk through directory if a directory name is passed
     try {
-        // walkSync only if it is a directory
-        fs.walkSync(filepath, (foundpath: string) => {
-            // only process .sol files
-            if (foundpath.split('.').pop() === 'sol') {
-                let c = fs.readFileSync(foundpath).toString()
-                const s = /^(import)\s['"](remix_tests.sol|tests.sol)['"];/gm
-                let includeTestLibs = '\nimport \'remix_tests.sol\';\n'
-                if (foundpath.indexOf('_test.sol') > 0 && regexIndexOf(c, s) < 0) {
-                    c = includeTestLibs.concat(c)
-                }
-                sources[foundpath] = { content: c }
+        if(!isDirectory && fs.existsSync(filename)) {
+            if (filename.split('.').pop() === 'sol') {
+                processFile(filename, sources, true)
+            } else {
+                throw new Error('Not a solidity file')
             }
-        })
+        } else {
+            // walkSync only if it is a directory
+            fs.walkSync(filepath, (foundpath: string) => {
+                // only process .sol files
+                if (foundpath.split('.').pop() === 'sol') {
+                    processFile(foundpath, sources, true)
+                }
+            })
+        }
+        
     } catch (e) {
         throw e
     } finally {
diff --git a/remix-tests/tests/examples_5/contract/simple_storage.sol b/remix-tests/tests/examples_5/contract/simple_storage.sol
new file mode 100644
index 0000000000..745fe39605
--- /dev/null
+++ b/remix-tests/tests/examples_5/contract/simple_storage.sol
@@ -0,0 +1,22 @@
+pragma solidity ^0.5.0;
+
+import "../../examples_4/SafeMath.sol";
+import "../lib/EvenOdd.sol";
+
+contract SimpleStorage is EvenOdd{
+  using SafeMath for uint256;
+  uint public storedData;
+
+  constructor() public {
+    storedData = 100;
+  }
+
+  function set(uint x) public {
+    storedData = x;
+  }
+
+  function get() public view returns (uint retVal) {
+    return storedData;
+  }
+
+}
diff --git a/remix-tests/tests/examples_5/lib/EvenOdd.sol b/remix-tests/tests/examples_5/lib/EvenOdd.sol
new file mode 100644
index 0000000000..f5847ee481
--- /dev/null
+++ b/remix-tests/tests/examples_5/lib/EvenOdd.sol
@@ -0,0 +1,15 @@
+pragma solidity ^0.5.0;
+
+contract EvenOdd {
+    
+    /**
+     * @dev Tells whether a number is even or odd
+     * @param num Number to check
+     */
+
+    function check(int num) public pure returns (string memory){
+        if(num % 2 == 0)
+            return "EVEN";
+        return "ODD";
+    }
+}
\ No newline at end of file
diff --git a/remix-tests/tests/examples_5/test/simple_storage_test.sol b/remix-tests/tests/examples_5/test/simple_storage_test.sol
new file mode 100644
index 0000000000..00be3f627e
--- /dev/null
+++ b/remix-tests/tests/examples_5/test/simple_storage_test.sol
@@ -0,0 +1,24 @@
+pragma solidity ^0.5.0;
+import "./../contract/simple_storage.sol";
+
+contract StorageResolveTest {
+  SimpleStorage foo;
+
+  function beforeAll() public {
+    foo = new SimpleStorage();
+  }
+
+  function initialValueShouldBe100() public returns (bool) {
+    return Assert.equal(foo.get(), 100, "initial value is not correct");
+  }
+  
+  //Test imported contract functions
+  function checkIfEven() public returns (bool) {
+    return Assert.equal(foo.check(10), 'EVEN', "value is odd");
+  }
+
+  function checkIfOdd() public returns (bool) {
+    return Assert.equal(foo.check(11), 'ODD', "value is even");
+  }
+
+}
diff --git a/remix-tests/tests/testRunner.ts b/remix-tests/tests/testRunner.ts
index 1ee893578e..ba79ca8b54 100644
--- a/remix-tests/tests/testRunner.ts
+++ b/remix-tests/tests/testRunner.ts
@@ -183,6 +183,33 @@ describe('testRunner', () => {
       })
     })
 
+    // Test multiple directory import in test contract
+    describe('test multiple directory import in test contract', function () {
+      let filename = 'tests/examples_5/test/simple_storage_test.sol'
+
+      before(function (done) {
+        compileAndDeploy(filename, (_err, compilationData, contracts, accounts) => {
+          runTest('StorageResolveTest', contracts.StorageResolveTest, compilationData[filename]['StorageResolveTest'], { accounts }, testCallback, resultsCallback(done))
+        })
+      })
+
+      after(() => { tests = [] })
+
+      it('should 3 passing tests', function () {
+        assert.equal(results.passingNum, 3)
+      })
+
+      it('should return 4 messages', function () {
+        deepEqualExcluding(tests, [
+          { type: 'accountList', value: accounts },
+          { type: 'contract', value: 'StorageResolveTest', filename: 'tests/examples_5/test/simple_storage_test.sol' },
+          { type: 'testPass', value: 'Initial value should be100', context: 'StorageResolveTest' },
+          { type: 'testPass', value: 'Check if odd', context: 'StorageResolveTest' },
+          { type: 'testPass', value: 'Check if even', context: 'StorageResolveTest' }
+        ], ['time'])
+      })
+    })
+
     //Test signed/unsigned integer weight
     describe('test number weight', function () {
       let filename = 'tests/number/number_test.sol'