diff --git a/CHANGELOG.md b/CHANGELOG.md
index 79aee75f..7d553cc2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,6 +1,178 @@
 Change log
 ==========
 
+1.6.1 (2016-02-23)
+------------------
+
+Bug Fixes
+
+-   Fixed a bug where recreating a container multiple times would cause the
+    new container to be started without the previous volumes.
+
+-   Fixed a bug where Compose would set the value of unset environment variables
+    to an empty string, instead of a key without a value.
+
+-   Provide a better error message when Compose requires a more recent version
+    of the Docker API.
+
+-   Add a missing config field `network.aliases` which allows setting a network
+    scoped alias for a service.
+
+-   Fixed a bug where `run` would not start services listed in `depends_on`.
+
+-   Fixed a bug where `networks` and `network_mode` where not merged when using
+    extends or multiple Compose files.
+
+-   Fixed a bug with service aliases where the short container id alias was
+    only contained 10 characters, instead of the 12 characters used in previous
+    versions.
+
+-   Added a missing log message when creating a new named volume.
+
+-   Fixed a bug where `build.args` was not merged when using `extends` or
+    multiple Compose files.
+
+-   Fixed some bugs with config validation when null values or incorrect types
+    were used instead of a mapping.
+
+-   Fixed a bug where a `build` section without a `context` would show a stack
+    trace instead of a helpful validation message.
+
+-   Improved compatibility with swarm by only setting a container affinity to
+    the previous instance of a services' container when the service uses an
+    anonymous container volume. Previously the affinity was always set on all
+    containers.
+
+-   Fixed the validation of some `driver_opts` would cause an error if a number
+    was used instead of a string.
+
+-   Some improvements to the `run.sh` script used by the Compose container install
+    option.
+
+-   Fixed a bug with `up --abort-on-container-exit` where Compose would exit,
+    but would not stop other containers.
+
+-   Corrected the warning message that is printed when a boolean value is used
+    as a value in a mapping.
+
+
+1.6.0 (2016-01-15)
+------------------
+
+Major Features:
+
+-   Compose 1.6 introduces a new format for `docker-compose.yml` which lets
+    you define networks and volumes in the Compose file as well as services. It
+    also makes a few changes to the structure of some configuration options.
+
+    You don't have to use it - your existing Compose files will run on Compose
+    1.6 exactly as they do today.
+
+    Check the upgrade guide for full details:
+    https://docs.docker.com/compose/compose-file#upgrading
+
+-   Support for networking has exited experimental status and is the recommended
+    way to enable communication between containers.
+
+    If you use the new file format, your app will use networking. If you aren't
+    ready yet, just leave your Compose file as it is and it'll continue to work
+    just the same.
+
+    By default, you don't have to configure any networks. In fact, using
+    networking with Compose involves even less configuration than using links.
+    Consult the networking guide for how to use it:
+    https://docs.docker.com/compose/networking
+
+    The experimental flags `--x-networking` and `--x-network-driver`, introduced
+    in Compose 1.5, have been removed.
+
+-   You can now pass arguments to a build if you're using the new file format:
+
+        build:
+          context: .
+          args:
+            buildno: 1
+
+-   You can now specify both a `build` and an `image` key if you're using the
+    new file format. `docker-compose build` will build the image and tag it with
+    the name you've specified, while `docker-compose pull` will attempt to pull
+    it.
+
+-   There's a new `events` command for monitoring container events from
+    the application, much like `docker events`. This is a good primitive for
+    building tools on top of Compose for performing actions when particular
+    things happen, such as containers starting and stopping.
+
+-   There's a new `depends_on` option for specifying dependencies between
+    services. This enforces the order of startup, and ensures that when you run
+    `docker-compose up SERVICE` on a service with dependencies, those are started
+    as well.
+
+New Features:
+
+-   Added a new command `config` which validates and prints the Compose
+    configuration after interpolating variables, resolving relative paths, and
+    merging multiple files and `extends`.
+
+-   Added a new command `create` for creating containers without starting them.
+
+-   Added a new command `down` to stop and remove all the resources created by
+    `up` in a single command.
+
+-   Added support for the `cpu_quota` configuration option.
+
+-   Added support for the `stop_signal` configuration option.
+
+-   Commands `start`, `restart`, `pause`, and `unpause` now exit with an
+    error status code if no containers were modified.
+
+-   Added a new `--abort-on-container-exit` flag to `up` which causes `up` to
+    stop all container and exit once the first container exits.
+
+-   Removed support for `FIG_FILE`, `FIG_PROJECT_NAME`, and no longer reads
+    `fig.yml` as a default Compose file location.
+
+-   Removed the `migrate-to-labels` command.
+
+-   Removed the `--allow-insecure-ssl` flag.
+
+
+Bug Fixes:
+
+-   Fixed a validation bug that prevented the use of a range of ports in
+    the `expose` field.
+
+-   Fixed a validation bug that prevented the use of arrays in the `entrypoint`
+    field if they contained duplicate entries.
+
+-   Fixed a bug that caused `ulimits` to be ignored when used with `extends`.
+
+-   Fixed a bug that prevented ipv6 addresses in `extra_hosts`.
+
+-   Fixed a bug that caused `extends` to be ignored when included from
+    multiple Compose files.
+
+-   Fixed an incorrect warning when a container volume was defined in
+    the Compose file.
+
+-   Fixed a bug that prevented the force shutdown behaviour of `up` and
+    `logs`.
+
+-   Fixed a bug that caused `None` to be printed as the network driver name
+    when the default network driver was used.
+
+-   Fixed a bug where using the string form of `dns` or `dns_search` would
+    cause an error.
+
+-   Fixed a bug where a container would be reported as "Up" when it was
+    in the restarting state.
+
+-   Fixed a confusing error message when DOCKER_CERT_PATH was not set properly.
+
+-   Fixed a bug where attaching to a container would fail if it was using a
+    non-standard logging driver (or none at all).
+
+
 1.5.2 (2015-12-03)
 ------------------
 
diff --git a/README.md b/README.md
index b60a7eee..f8822151 100644
--- a/README.md
+++ b/README.md
@@ -6,11 +6,11 @@ Compose is a tool for defining and running multi-container Docker applications.
 With Compose, you use a Compose file to configure your application's services.
 Then, using a single command, you create and start all the services
 from your configuration. To learn more about all the features of Compose
-see [the list of features](docs/index.md#features).
+see [the list of features](https://github.com/docker/compose/blob/release/docs/overview.md#features).
 
 Compose is great for development, testing, and staging environments, as well as
 CI workflows. You can learn more about each case in
-[Common Use Cases](docs/index.md#common-use-cases).
+[Common Use Cases](https://github.com/docker/compose/blob/release/docs/overview.md#common-use-cases).
 
 Using Compose is basically a three-step process.
 
@@ -34,7 +34,7 @@ A `docker-compose.yml` looks like this:
       image: redis
 
 For more information about the Compose file, see the
-[Compose file reference](docs/compose-file.md)
+[Compose file reference](https://github.com/docker/compose/blob/release/docs/compose-file.md)
 
 Compose has commands for managing the whole lifecycle of your application:
 
diff --git a/SWARM.md b/SWARM.md
index 1ea4e25f..c6f378a9 100644
--- a/SWARM.md
+++ b/SWARM.md
@@ -1,39 +1 @@
-Docker Compose/Swarm integration
-================================
-
-Eventually, Compose and Swarm aim to have full integration, meaning you can point a Compose app at a Swarm cluster and have it all just work as if you were using a single Docker host.
-
-However, integration is currently incomplete: Compose can create containers on a Swarm cluster, but the majority of Compose apps won’t work out of the box unless all containers are scheduled on one host, because links between containers do not work across hosts.
-
-Docker networking is [getting overhauled](https://github.com/docker/libnetwork) in such a way that it’ll fit the multi-host model much better. For now, linked containers are automatically scheduled on the same host.
-
-Building
---------
-
-Swarm can build an image from a Dockerfile just like a single-host Docker instance can, but the resulting image will only live on a single node and won't be distributed to other nodes.
-
-If you want to use Compose to scale the service in question to multiple nodes, you'll have to build it yourself, push it to a registry (e.g. the Docker Hub) and reference it from `docker-compose.yml`:
-
-    $ docker build -t myusername/web .
-    $ docker push myusername/web
-
-    $ cat docker-compose.yml
-    web:
-      image: myusername/web
-
-    $ docker-compose up -d
-    $ docker-compose scale web=3
-
-Scheduling
-----------
-
-Swarm offers a rich set of scheduling and affinity hints, enabling you to control where containers are located. They are specified via container environment variables, so you can use Compose's `environment` option to set them.
-
-    environment:
-      # Schedule containers on a node that has the 'storage' label set to 'ssd'
-      - "constraint:storage==ssd"
-
-      # Schedule containers where the 'redis' image is already pulled
-      - "affinity:image==redis"
-
-For the full set of available filters and expressions, see the [Swarm documentation](https://docs.docker.com/swarm/scheduler/filter/).
+This file has moved to: https://docs.docker.com/compose/swarm/
diff --git a/compose/__init__.py b/compose/__init__.py
index 3ba90fde..942062f5 100644
--- a/compose/__init__.py
+++ b/compose/__init__.py
@@ -1,4 +1,4 @@
 from __future__ import absolute_import
 from __future__ import unicode_literals
 
-__version__ = '1.6.0dev'
+__version__ = '1.6.1'
diff --git a/compose/cli/command.py b/compose/cli/command.py
index c1681ffc..2a0d8698 100644
--- a/compose/cli/command.py
+++ b/compose/cli/command.py
@@ -92,7 +92,7 @@ def get_project_name(working_dir, project_name=None):
         return re.sub(r'[^a-z0-9]', '', name.lower())
 
     project_name = project_name or os.environ.get('COMPOSE_PROJECT_NAME')
-    if project_name is not None:
+    if project_name:
         return normalize_name(project_name)
 
     project = os.path.basename(os.path.abspath(working_dir))
diff --git a/compose/cli/docker_client.py b/compose/cli/docker_client.py
index 611997df..b680616e 100644
--- a/compose/cli/docker_client.py
+++ b/compose/cli/docker_client.py
@@ -5,9 +5,11 @@ import logging
 import os
 
 from docker import Client
+from docker.errors import TLSParameterError
 from docker.utils import kwargs_from_env
 
 from ..const import HTTP_TIMEOUT
+from .errors import UserError
 
 log = logging.getLogger(__name__)
 
@@ -20,8 +22,16 @@ def docker_client(version=None):
     if 'DOCKER_CLIENT_TIMEOUT' in os.environ:
         log.warn('The DOCKER_CLIENT_TIMEOUT environment variable is deprecated. Please use COMPOSE_HTTP_TIMEOUT instead.')
 
-    kwargs = kwargs_from_env(assert_hostname=False)
+    try:
+        kwargs = kwargs_from_env(assert_hostname=False)
+    except TLSParameterError:
+        raise UserError(
+            'TLS configuration is invalid - make sure your DOCKER_TLS_VERIFY and DOCKER_CERT_PATH are set correctly.\n'
+            'You might need to run `eval "$(docker-machine env default)"`')
+
     if version:
         kwargs['version'] = version
+
     kwargs['timeout'] = HTTP_TIMEOUT
+
     return Client(**kwargs)
diff --git a/compose/cli/main.py b/compose/cli/main.py
index 4be8536f..3c4b5721 100644
--- a/compose/cli/main.py
+++ b/compose/cli/main.py
@@ -2,6 +2,7 @@ from __future__ import absolute_import
 from __future__ import print_function
 from __future__ import unicode_literals
 
+import contextlib
 import json
 import logging
 import re
@@ -18,6 +19,7 @@ from ..config import config
 from ..config import ConfigurationError
 from ..config import parse_environment
 from ..config.serialize import serialize_config
+from ..const import API_VERSION_TO_ENGINE_VERSION
 from ..const import DEFAULT_TIMEOUT
 from ..const import HTTP_TIMEOUT
 from ..const import IS_WINDOWS_PLATFORM
@@ -41,7 +43,7 @@ from .utils import yesno
 
 
 if not IS_WINDOWS_PLATFORM:
-    import dockerpty
+    from dockerpty.pty import PseudoTerminal, RunOperation
 
 log = logging.getLogger(__name__)
 console_handler = logging.StreamHandler(sys.stderr)
@@ -53,7 +55,7 @@ def main():
         command = TopLevelCommand()
         command.sys_dispatch()
     except KeyboardInterrupt:
-        log.error("\nAborting.")
+        log.error("Aborting.")
         sys.exit(1)
     except (UserError, NoSuchService, ConfigurationError) as e:
         log.error(e.msg)
@@ -63,7 +65,7 @@ def main():
         log.error("No such command: %s\n\n%s", e.command, commands)
         sys.exit(1)
     except APIError as e:
-        log.error(e.explanation)
+        log_api_error(e)
         sys.exit(1)
     except BuildError as e:
         log.error("Service '%s' failed to build: %s" % (e.service.name, e.reason))
@@ -83,6 +85,22 @@ def main():
         sys.exit(1)
 
 
+def log_api_error(e):
+    if 'client is newer than server' in e.explanation:
+        # we need JSON formatted errors. In the meantime...
+        # TODO: fix this by refactoring project dispatch
+        # http://github.com/docker/compose/pull/2832#commitcomment-15923800
+        client_version = e.explanation.split('client API version: ')[1].split(',')[0]
+        log.error(
+            "The engine version is lesser than the minimum required by "
+            "compose. Your current project requires a Docker Engine of "
+            "version {version} or superior.".format(
+                version=API_VERSION_TO_ENGINE_VERSION[client_version]
+            ))
+    else:
+        log.error(e.explanation)
+
+
 def setup_logging():
     root_logger = logging.getLogger()
     root_logger.addHandler(console_handler)
@@ -629,18 +647,24 @@ class TopLevelCommand(DocoptCommand):
         if detached and cascade_stop:
             raise UserError("--abort-on-container-exit and -d cannot be combined.")
 
-        to_attach = project.up(
-            service_names=service_names,
-            start_deps=start_deps,
-            strategy=convergence_strategy_from_opts(options),
-            do_build=not options['--no-build'],
-            timeout=timeout,
-            detached=detached
-        )
+        with up_shutdown_context(project, service_names, timeout, detached):
+            to_attach = project.up(
+                service_names=service_names,
+                start_deps=start_deps,
+                strategy=convergence_strategy_from_opts(options),
+                do_build=not options['--no-build'],
+                timeout=timeout,
+                detached=detached)
 
-        if not detached:
+            if detached:
+                return
             log_printer = build_log_printer(to_attach, service_names, monochrome, cascade_stop)
-            attach_to_logs(project, log_printer, service_names, timeout)
+            print("Attaching to", list_containers(log_printer.containers))
+            log_printer.run()
+
+            if cascade_stop:
+                print("Aborting on container exit...")
+                project.stop(service_names=service_names, timeout=timeout)
 
     def version(self, project, options):
         """
@@ -683,14 +707,14 @@ def image_type_from_opt(flag, value):
 
 def run_one_off_container(container_options, project, service, options):
     if not options['--no-deps']:
-        deps = service.get_linked_service_names()
+        deps = service.get_dependency_names()
         if deps:
             project.up(
                 service_names=deps,
                 start_deps=True,
                 strategy=ConvergenceStrategy.never)
 
-    project.initialize_networks()
+    project.initialize()
 
     container = service.create_container(
         quiet=True,
@@ -709,8 +733,16 @@ def run_one_off_container(container_options, project, service, options):
     signals.set_signal_handler_to_shutdown()
     try:
         try:
-            dockerpty.start(project.client, container.id, interactive=not options['-T'])
-            service.connect_container_to_networks(container)
+            operation = RunOperation(
+                project.client,
+                container.id,
+                interactive=not options['-T'],
+                logs=False,
+            )
+            pty = PseudoTerminal(project.client, operation)
+            sockets = pty.sockets()
+            service.start_container(container)
+            pty.start(sockets)
             exit_code = container.wait()
         except signals.ShutdownException:
             project.client.stop(container.id)
@@ -733,13 +765,16 @@ def build_log_printer(containers, service_names, monochrome, cascade_stop):
     return LogPrinter(containers, monochrome=monochrome, cascade_stop=cascade_stop)
 
 
-def attach_to_logs(project, log_printer, service_names, timeout):
-    print("Attaching to", list_containers(log_printer.containers))
-    signals.set_signal_handler_to_shutdown()
+@contextlib.contextmanager
+def up_shutdown_context(project, service_names, timeout, detached):
+    if detached:
+        yield
+        return
 
+    signals.set_signal_handler_to_shutdown()
     try:
         try:
-            log_printer.run()
+            yield
         except signals.ShutdownException:
             print("Gracefully stopping... (press Ctrl+C again to force)")
             project.stop(service_names=service_names, timeout=timeout)
diff --git a/compose/config/config.py b/compose/config/config.py
index b3894225..48b34318 100644
--- a/compose/config/config.py
+++ b/compose/config/config.py
@@ -14,22 +14,31 @@ import six
 import yaml
 from cached_property import cached_property
 
-from ..const import COMPOSEFILE_VERSIONS
+from ..const import COMPOSEFILE_V1 as V1
+from ..const import COMPOSEFILE_V2_0 as V2_0
+from ..utils import build_string_dict
 from .errors import CircularReference
 from .errors import ComposeFileNotFound
 from .errors import ConfigurationError
+from .errors import VERSION_EXPLANATION
 from .interpolation import interpolate_environment_variables
-from .sort_services import get_service_name_from_net
+from .sort_services import get_container_name_from_network_mode
+from .sort_services import get_service_name_from_network_mode
 from .sort_services import sort_service_dicts
 from .types import parse_extra_hosts
 from .types import parse_restart_spec
+from .types import ServiceLink
 from .types import VolumeFromSpec
 from .types import VolumeSpec
+from .validation import match_named_volumes
 from .validation import validate_against_fields_schema
 from .validation import validate_against_service_schema
+from .validation import validate_config_section
+from .validation import validate_depends_on
 from .validation import validate_extends_file_path
+from .validation import validate_network_mode
 from .validation import validate_top_level_object
-from .validation import validate_top_level_service_objects
+from .validation import validate_ulimits
 
 
 DOCKER_CONFIG_KEYS = [
@@ -78,9 +87,8 @@ ALLOWED_KEYS = DOCKER_CONFIG_KEYS + [
     'build',
     'container_name',
     'dockerfile',
-    'expose',
-    'external_links',
     'logging',
+    'network_mode',
 ]
 
 DOCKER_VALID_URL_PREFIXES = (
@@ -98,6 +106,7 @@ SUPPORTED_FILENAMES = [
 
 DEFAULT_OVERRIDE_FILENAME = 'docker-compose.override.yml'
 
+
 log = logging.getLogger(__name__)
 
 
@@ -124,24 +133,48 @@ class ConfigFile(namedtuple('_ConfigFile', 'filename config')):
 
     @cached_property
     def version(self):
-        if self.config is None:
-            return 1
-        version = self.config.get('version', 1)
+        if 'version' not in self.config:
+            return V1
+
+        version = self.config['version']
+
         if isinstance(version, dict):
-            log.warn("Unexpected type for field 'version', in file {} assuming "
-                     "version is the name of a service, and defaulting to "
-                     "Compose file version 1".format(self.filename))
-            return 1
+            log.warn('Unexpected type for "version" key in "{}". Assuming '
+                     '"version" is the name of a service, and defaulting to '
+                     'Compose file version 1.'.format(self.filename))
+            return V1
+
+        if not isinstance(version, six.string_types):
+            raise ConfigurationError(
+                'Version in "{}" is invalid - it should be a string.'
+                .format(self.filename))
+
+        if version == '1':
+            raise ConfigurationError(
+                'Version in "{}" is invalid. {}'
+                .format(self.filename, VERSION_EXPLANATION))
+
+        if version == '2':
+            version = V2_0
+
+        if version != V2_0:
+            raise ConfigurationError(
+                'Version in "{}" is unsupported. {}'
+                .format(self.filename, VERSION_EXPLANATION))
+
         return version
 
+    def get_service(self, name):
+        return self.get_service_dicts()[name]
+
     def get_service_dicts(self):
-        return self.config if self.version == 1 else self.config.get('services', {})
+        return self.config if self.version == V1 else self.config.get('services', {})
 
     def get_volumes(self):
-        return {} if self.version == 1 else self.config.get('volumes', {})
+        return {} if self.version == V1 else self.config.get('volumes', {})
 
     def get_networks(self):
-        return {} if self.version == 1 else self.config.get('networks', {})
+        return {} if self.version == V1 else self.config.get('networks', {})
 
 
 class Config(namedtuple('_Config', 'version services volumes networks')):
@@ -188,10 +221,10 @@ def find(base_dir, filenames):
         [ConfigFile.from_filename(f) for f in filenames])
 
 
-def validate_config_version(config_details):
-    main_file = config_details.config_files[0]
+def validate_config_version(config_files):
+    main_file = config_files[0]
     validate_top_level_object(main_file)
-    for next_file in config_details.config_files[1:]:
+    for next_file in config_files[1:]:
         validate_top_level_object(next_file)
 
         if main_file.version != next_file.version:
@@ -203,10 +236,6 @@ def validate_config_version(config_details):
                     next_file.filename,
                     next_file.version))
 
-    if main_file.version not in COMPOSEFILE_VERSIONS:
-        raise ConfigurationError(
-            'Invalid Compose file version: {0}'.format(main_file.version))
-
 
 def get_default_config_files(base_dir):
     (candidates, path) = find_candidates_in_parent_dirs(SUPPORTED_FILENAMES, base_dir)
@@ -254,7 +283,7 @@ def load(config_details):
 
     Return a fully interpolated, extended and validated configuration.
     """
-    validate_config_version(config_details)
+    validate_config_version(config_details.config_files)
 
     processed_files = [
         process_config_file(config_file)
@@ -263,13 +292,21 @@ def load(config_details):
     config_details = config_details._replace(config_files=processed_files)
 
     main_file = config_details.config_files[0]
-    volumes = load_mapping(config_details.config_files, 'get_volumes', 'Volume')
-    networks = load_mapping(config_details.config_files, 'get_networks', 'Network')
+    volumes = load_mapping(
+        config_details.config_files, 'get_volumes', 'Volume'
+    )
+    networks = load_mapping(
+        config_details.config_files, 'get_networks', 'Network'
+    )
     service_dicts = load_services(
         config_details.working_dir,
-        main_file.filename,
-        [file.get_service_dicts() for file in config_details.config_files],
-        main_file.version)
+        main_file,
+        [file.get_service_dicts() for file in config_details.config_files])
+
+    if main_file.version != V1:
+        for service_dict in service_dicts:
+            match_named_volumes(service_dict, volumes)
+
     return Config(main_file.version, service_dicts, volumes, networks)
 
 
@@ -300,24 +337,30 @@ def load_mapping(config_files, get_func, entity_type):
 
             mapping[name] = config
 
+            if 'driver_opts' in config:
+                config['driver_opts'] = build_string_dict(
+                    config['driver_opts']
+                )
+
     return mapping
 
 
-def load_services(working_dir, filename, service_configs, version):
+def load_services(working_dir, config_file, service_configs):
     def build_service(service_name, service_dict, service_names):
         service_config = ServiceConfig.with_abs_paths(
             working_dir,
-            filename,
+            config_file.filename,
             service_name,
             service_dict)
-        resolver = ServiceExtendsResolver(service_config, version)
+        resolver = ServiceExtendsResolver(service_config, config_file)
         service_dict = process_service(resolver.run())
 
-        validate_service(service_dict, service_config.name, version)
+        service_config = service_config._replace(config=service_dict)
+        validate_service(service_config, service_names, config_file.version)
         service_dict = finalize_service(
-            service_config._replace(config=service_dict),
+            service_config,
             service_names,
-            version)
+            config_file.version)
         return service_dict
 
     def build_services(service_config):
@@ -333,7 +376,7 @@ def load_services(working_dir, filename, service_configs, version):
             name: merge_service_dicts_from_files(
                 base.get(name, {}),
                 override.get(name, {}),
-                version)
+                config_file.version)
             for name in all_service_names
         }
 
@@ -344,27 +387,36 @@ def load_services(working_dir, filename, service_configs, version):
     return build_services(service_config)
 
 
+def interpolate_config_section(filename, config, section):
+    validate_config_section(filename, config, section)
+    return interpolate_environment_variables(config, section)
+
+
 def process_config_file(config_file, service_name=None):
-    service_dicts = config_file.get_service_dicts()
-    validate_top_level_service_objects(config_file.filename, service_dicts)
+    services = interpolate_config_section(
+        config_file.filename,
+        config_file.get_service_dicts(),
+        'service')
 
-    interpolated_config = interpolate_environment_variables(service_dicts, 'service')
-
-    if config_file.version == 2:
+    if config_file.version == V2_0:
         processed_config = dict(config_file.config)
-        processed_config['services'] = interpolated_config
-        processed_config['volumes'] = interpolate_environment_variables(
-            config_file.get_volumes(), 'volume')
-        processed_config['networks'] = interpolate_environment_variables(
-            config_file.get_networks(), 'network')
+        processed_config['services'] = services
+        processed_config['volumes'] = interpolate_config_section(
+            config_file.filename,
+            config_file.get_volumes(),
+            'volume')
+        processed_config['networks'] = interpolate_config_section(
+            config_file.filename,
+            config_file.get_networks(),
+            'network')
 
-    if config_file.version == 1:
-        processed_config = interpolated_config
+    if config_file.version == V1:
+        processed_config = services
 
     config_file = config_file._replace(config=processed_config)
     validate_against_fields_schema(config_file)
 
-    if service_name and service_name not in processed_config:
+    if service_name and service_name not in services:
         raise ConfigurationError(
             "Cannot extend service '{}' in {}: Service not found".format(
                 service_name, config_file.filename))
@@ -373,11 +425,11 @@ def process_config_file(config_file, service_name=None):
 
 
 class ServiceExtendsResolver(object):
-    def __init__(self, service_config, version, already_seen=None):
+    def __init__(self, service_config, config_file, already_seen=None):
         self.service_config = service_config
         self.working_dir = service_config.working_dir
         self.already_seen = already_seen or []
-        self.version = version
+        self.config_file = config_file
 
     @property
     def signature(self):
@@ -404,10 +456,13 @@ class ServiceExtendsResolver(object):
         config_path = self.get_extended_config_path(extends)
         service_name = extends['service']
 
+        extends_file = ConfigFile.from_filename(config_path)
+        validate_config_version([self.config_file, extends_file])
         extended_file = process_config_file(
-            ConfigFile.from_filename(config_path),
+            extends_file,
             service_name=service_name)
-        service_config = extended_file.config[service_name]
+        service_config = extended_file.get_service(service_name)
+
         return config_path, service_config, service_name
 
     def resolve_extends(self, extended_config_path, service_dict, service_name):
@@ -417,7 +472,7 @@ class ServiceExtendsResolver(object):
                 extended_config_path,
                 service_name,
                 service_dict),
-            self.version,
+            self.config_file,
             already_seen=self.already_seen + [self.signature])
 
         service_config = resolver.run()
@@ -425,13 +480,12 @@ class ServiceExtendsResolver(object):
         validate_extended_service_dict(
             other_service_dict,
             extended_config_path,
-            service_name,
-        )
+            service_name)
 
         return merge_service_dicts(
             other_service_dict,
             self.service_config.config,
-            self.version)
+            self.config_file.version)
 
     def get_extended_config_path(self, extends_options):
         """Service we are extending either has a value for 'file' set, which we
@@ -477,26 +531,28 @@ def validate_extended_service_dict(service_dict, filename, service):
             "%s services with 'volumes_from' cannot be extended" % error_prefix)
 
     if 'net' in service_dict:
-        if get_service_name_from_net(service_dict['net']) is not None:
+        if get_container_name_from_network_mode(service_dict['net']):
             raise ConfigurationError(
                 "%s services with 'net: container' cannot be extended" % error_prefix)
 
+    if 'network_mode' in service_dict:
+        if get_service_name_from_network_mode(service_dict['network_mode']):
+            raise ConfigurationError(
+                "%s services with 'network_mode: service' cannot be extended" % error_prefix)
 
-def validate_ulimits(ulimit_config):
-    for limit_name, soft_hard_values in six.iteritems(ulimit_config):
-        if isinstance(soft_hard_values, dict):
-            if not soft_hard_values['soft'] <= soft_hard_values['hard']:
-                raise ConfigurationError(
-                    "ulimit_config \"{}\" cannot contain a 'soft' value higher "
-                    "than 'hard' value".format(ulimit_config))
+    if 'depends_on' in service_dict:
+        raise ConfigurationError(
+            "%s services with 'depends_on' cannot be extended" % error_prefix)
 
 
-def validate_service(service_dict, service_name, version):
+def validate_service(service_config, service_names, version):
+    service_dict, service_name = service_config.config, service_config.name
     validate_against_service_schema(service_dict, service_name, version)
     validate_paths(service_dict)
 
-    if 'ulimits' in service_dict:
-        validate_ulimits(service_dict['ulimits'])
+    validate_ulimits(service_config)
+    validate_network_mode(service_config, service_names)
+    validate_depends_on(service_config, service_names)
 
     if not service_dict.get('image') and has_uppercase(service_name):
         raise ConfigurationError(
@@ -556,6 +612,17 @@ def finalize_service(service_config, service_names, version):
         service_dict['volumes'] = [
             VolumeSpec.parse(v) for v in service_dict['volumes']]
 
+    if 'net' in service_dict:
+        network_mode = service_dict.pop('net')
+        container_name = get_container_name_from_network_mode(network_mode)
+        if container_name and container_name in service_names:
+            service_dict['network_mode'] = 'service:{}'.format(container_name)
+        else:
+            service_dict['network_mode'] = network_mode
+
+    if 'networks' in service_dict:
+        service_dict['networks'] = parse_networks(service_dict['networks'])
+
     if 'restart' in service_dict:
         service_dict['restart'] = parse_restart_spec(service_dict['restart'])
 
@@ -598,63 +665,94 @@ def merge_service_dicts_from_files(base, override, version):
     return new_service
 
 
+class MergeDict(dict):
+    """A dict-like object responsible for merging two dicts into one."""
+
+    def __init__(self, base, override):
+        self.base = base
+        self.override = override
+
+    def needs_merge(self, field):
+        return field in self.base or field in self.override
+
+    def merge_field(self, field, merge_func, default=None):
+        if not self.needs_merge(field):
+            return
+
+        self[field] = merge_func(
+            self.base.get(field, default),
+            self.override.get(field, default))
+
+    def merge_mapping(self, field, parse_func):
+        if not self.needs_merge(field):
+            return
+
+        self[field] = parse_func(self.base.get(field))
+        self[field].update(parse_func(self.override.get(field)))
+
+    def merge_sequence(self, field, parse_func):
+        def parse_sequence_func(seq):
+            return to_mapping((parse_func(item) for item in seq), 'merge_field')
+
+        if not self.needs_merge(field):
+            return
+
+        merged = parse_sequence_func(self.base.get(field, []))
+        merged.update(parse_sequence_func(self.override.get(field, [])))
+        self[field] = [item.repr() for item in merged.values()]
+
+    def merge_scalar(self, field):
+        if self.needs_merge(field):
+            self[field] = self.override.get(field, self.base.get(field))
+
+
 def merge_service_dicts(base, override, version):
-    d = {}
+    md = MergeDict(base, override)
 
-    def merge_field(field, merge_func, default=None):
-        if field in base or field in override:
-            d[field] = merge_func(
-                base.get(field, default),
-                override.get(field, default))
-
-    def merge_mapping(mapping, parse_func):
-        if mapping in base or mapping in override:
-            merged = parse_func(base.get(mapping, None))
-            merged.update(parse_func(override.get(mapping, None)))
-            d[mapping] = merged
-
-    merge_mapping('environment', parse_environment)
-    merge_mapping('labels', parse_labels)
-    merge_mapping('ulimits', parse_ulimits)
+    md.merge_mapping('environment', parse_environment)
+    md.merge_mapping('labels', parse_labels)
+    md.merge_mapping('ulimits', parse_ulimits)
+    md.merge_mapping('networks', parse_networks)
+    md.merge_sequence('links', ServiceLink.parse)
 
     for field in ['volumes', 'devices']:
-        merge_field(field, merge_path_mappings)
+        md.merge_field(field, merge_path_mappings)
 
-    for field in ['ports', 'expose', 'external_links']:
-        merge_field(field, operator.add, default=[])
+    for field in [
+        'depends_on',
+        'expose',
+        'external_links',
+        'ports',
+        'volumes_from',
+    ]:
+        md.merge_field(field, operator.add, default=[])
 
     for field in ['dns', 'dns_search', 'env_file']:
-        merge_field(field, merge_list_or_string)
+        md.merge_field(field, merge_list_or_string)
 
-    for field in set(ALLOWED_KEYS) - set(d):
-        if field in base or field in override:
-            d[field] = override.get(field, base.get(field))
+    for field in set(ALLOWED_KEYS) - set(md):
+        md.merge_scalar(field)
 
-    if version == 1:
-        legacy_v1_merge_image_or_build(d, base, override)
-    else:
-        merge_build(d, base, override)
+    if version == V1:
+        legacy_v1_merge_image_or_build(md, base, override)
+    elif md.needs_merge('build'):
+        md['build'] = merge_build(md, base, override)
 
-    return d
+    return dict(md)
 
 
 def merge_build(output, base, override):
-    build = {}
+    def to_dict(service):
+        build_config = service.get('build', {})
+        if isinstance(build_config, six.string_types):
+            return {'context': build_config}
+        return build_config
 
-    if 'build' in base:
-        if isinstance(base['build'], six.string_types):
-            build['context'] = base['build']
-        else:
-            build.update(base['build'])
-
-    if 'build' in override:
-        if isinstance(override['build'], six.string_types):
-            build['context'] = override['build']
-        else:
-            build.update(override['build'])
-
-    if build:
-        output['build'] = build
+    md = MergeDict(to_dict(base), to_dict(override))
+    md.merge_scalar('context')
+    md.merge_scalar('dockerfile')
+    md.merge_mapping('args', parse_build_arguments)
+    return dict(md)
 
 
 def legacy_v1_merge_image_or_build(output, base, override):
@@ -711,6 +809,7 @@ def parse_dict_or_list(split_func, type_name, arguments):
 parse_build_arguments = functools.partial(parse_dict_or_list, split_env, 'build arguments')
 parse_environment = functools.partial(parse_dict_or_list, split_env, 'environment')
 parse_labels = functools.partial(parse_dict_or_list, split_label, 'labels')
+parse_networks = functools.partial(parse_dict_or_list, lambda k: (k, None), 'networks')
 
 
 def parse_ulimits(ulimits):
@@ -727,7 +826,7 @@ def resolve_env_var(key, val):
     elif key in os.environ:
         return key, os.environ[key]
     else:
-        return key, ''
+        return key, None
 
 
 def env_vars_from_file(filename):
@@ -774,7 +873,7 @@ def normalize_build(service_dict, working_dir):
         else:
             build.update(service_dict['build'])
             if 'args' in build:
-                build['args'] = resolve_build_args(build)
+                build['args'] = build_string_dict(resolve_build_args(build))
 
         service_dict['build'] = build
 
@@ -797,6 +896,9 @@ def validate_paths(service_dict):
             build_path = build
         elif isinstance(build, dict) and 'context' in build:
             build_path = build['context']
+        else:
+            # We have a build section but no context, so nothing to validate
+            return
 
         if (
             not is_url(build_path) and
@@ -869,6 +971,10 @@ def to_list(value):
         return value
 
 
+def to_mapping(sequence, key_field):
+    return {getattr(item, key_field): item for item in sequence}
+
+
 def has_uppercase(name):
     return any(char in string.ascii_uppercase for char in name)
 
diff --git a/compose/config/errors.py b/compose/config/errors.py
index 99129f3d..f94ac7ac 100644
--- a/compose/config/errors.py
+++ b/compose/config/errors.py
@@ -2,6 +2,14 @@ from __future__ import absolute_import
 from __future__ import unicode_literals
 
 
+VERSION_EXPLANATION = (
+    'Either specify a version of "2" (or "2.0") and place your service '
+    'definitions under the `services` key, or omit the `version` key and place '
+    'your service definitions at the root of the file to use version 1.\n'
+    'For more on the Compose file format versions, see '
+    'https://docs.docker.com/compose/compose-file/')
+
+
 class ConfigurationError(Exception):
     def __init__(self, msg):
         self.msg = msg
diff --git a/compose/config/fields_schema_v2.json b/compose/config/fields_schema_v2.0.json
similarity index 62%
rename from compose/config/fields_schema_v2.json
rename to compose/config/fields_schema_v2.0.json
index b0f304e8..7703adcd 100644
--- a/compose/config/fields_schema_v2.json
+++ b/compose/config/fields_schema_v2.0.json
@@ -1,18 +1,18 @@
 {
   "$schema": "http://json-schema.org/draft-04/schema#",
   "type": "object",
-  "id": "fields_schema_v2.json",
+  "id": "fields_schema_v2.0.json",
 
   "properties": {
     "version": {
-      "enum": [2]
+      "type": "string"
     },
     "services": {
       "id": "#/properties/services",
       "type": "object",
       "patternProperties": {
         "^[a-zA-Z0-9._-]+$": {
-          "$ref": "service_schema_v2.json#/definitions/service"
+          "$ref": "service_schema_v2.0.json#/definitions/service"
         }
       },
       "additionalProperties": false
@@ -41,7 +41,34 @@
   "definitions": {
     "network": {
       "id": "#/definitions/network",
-      "type": "object"
+      "type": "object",
+      "properties": {
+        "driver": {"type": "string"},
+        "driver_opts": {
+          "type": "object",
+          "patternProperties": {
+            "^.+$": {"type": ["string", "number"]}
+          }
+        },
+        "ipam": {
+            "type": "object",
+            "properties": {
+                "driver": {"type": "string"},
+                "config": {
+                    "type": "array"
+                }
+            },
+            "additionalProperties": false
+        },
+        "external": {
+          "type": ["boolean", "object"],
+          "properties": {
+            "name": {"type": "string"}
+          },
+          "additionalProperties": false
+        }
+      },
+      "additionalProperties": false
     },
     "volume": {
       "id": "#/definitions/volume",
diff --git a/compose/config/interpolation.py b/compose/config/interpolation.py
index e1c781fe..1e56ebb6 100644
--- a/compose/config/interpolation.py
+++ b/compose/config/interpolation.py
@@ -21,7 +21,7 @@ def interpolate_environment_variables(config, section):
         )
 
     return dict(
-        (name, process_item(name, config_dict))
+        (name, process_item(name, config_dict or {}))
         for name, config_dict in config.items()
     )
 
diff --git a/compose/config/service_schema_v2.json b/compose/config/service_schema_v2.0.json
similarity index 77%
rename from compose/config/service_schema_v2.json
rename to compose/config/service_schema_v2.0.json
index 8623507a..4c5c40fb 100644
--- a/compose/config/service_schema_v2.json
+++ b/compose/config/service_schema_v2.0.json
@@ -1,6 +1,6 @@
 {
   "$schema": "http://json-schema.org/draft-04/schema#",
-  "id": "service_schema_v2.json",
+  "id": "service_schema_v2.0.json",
 
   "type": "object",
 
@@ -23,7 +23,20 @@
               "properties": {
                 "context": {"type": "string"},
                 "dockerfile": {"type": "string"},
-                "args": {"$ref": "#/definitions/list_or_dict"}
+                "args": {
+                  "oneOf": [
+                    {"$ref": "#/definitions/list_of_strings"},
+                    {
+                      "type": "object",
+                      "patternProperties": {
+                        "^.+$": {
+                          "type": ["string", "number"]
+                        }
+                      },
+                      "additionalProperties": false
+                    }
+                  ]
+                }
               },
               "additionalProperties": false
             }
@@ -42,6 +55,7 @@
         "cpu_shares": {"type": ["number", "string"]},
         "cpu_quota": {"type": ["number", "string"]},
         "cpuset": {"type": "string"},
+        "depends_on": {"$ref": "#/definitions/list_of_strings"},
         "devices": {"type": "array", "items": {"type": "string"}, "uniqueItems": true},
         "dns": {"$ref": "#/definitions/string_or_list"},
         "dns_search": {"$ref": "#/definitions/string_or_list"},
@@ -82,11 +96,13 @@
           ]
         },
 
+        "external_links": {"type": "array", "items": {"type": "string"}, "uniqueItems": true},
         "extra_hosts": {"$ref": "#/definitions/list_or_dict"},
         "hostname": {"type": "string"},
         "image": {"type": "string"},
         "ipc": {"type": "string"},
         "labels": {"$ref": "#/definitions/list_or_dict"},
+        "links": {"type": "array", "items": {"type": "string"}, "uniqueItems": true},
 
         "logging": {
             "type": "object",
@@ -101,13 +117,31 @@
         "mac_address": {"type": "string"},
         "mem_limit": {"type": ["number", "string"]},
         "memswap_limit": {"type": ["number", "string"]},
+        "network_mode": {"type": "string"},
 
         "networks": {
-          "type": "array",
-          "items": {"type": "string"},
-          "uniqueItems": true
+          "oneOf": [
+            {"$ref": "#/definitions/list_of_strings"},
+            {
+              "type": "object",
+              "patternProperties": {
+                "^[a-zA-Z0-9._-]+$": {
+                  "oneOf": [
+                    {
+                      "type": "object",
+                      "properties": {
+                        "aliases": {"$ref": "#/definitions/list_of_strings"}
+                      },
+                      "additionalProperties": false
+                    },
+                    {"type": "null"}
+                  ]
+                }
+              },
+              "additionalProperties": false
+            }
+          ]
         },
-
         "pid": {"type": ["string", "null"]},
 
         "ports": {
@@ -191,7 +225,12 @@
       "anyOf": [
           {"required": ["build"]},
           {"required": ["image"]}
-      ]
+      ],
+      "properties": {
+        "build": {
+          "required": ["context"]
+        }
+      }
     }
   }
 }
diff --git a/compose/config/sort_services.py b/compose/config/sort_services.py
index 05552122..9d29f329 100644
--- a/compose/config/sort_services.py
+++ b/compose/config/sort_services.py
@@ -4,14 +4,22 @@ from __future__ import unicode_literals
 from compose.config.errors import DependencyError
 
 
-def get_service_name_from_net(net_config):
-    if not net_config:
+def get_service_name_from_network_mode(network_mode):
+    return get_source_name_from_network_mode(network_mode, 'service')
+
+
+def get_container_name_from_network_mode(network_mode):
+    return get_source_name_from_network_mode(network_mode, 'container')
+
+
+def get_source_name_from_network_mode(network_mode, source_type):
+    if not network_mode:
         return
 
-    if not net_config.startswith('container:'):
+    if not network_mode.startswith(source_type+':'):
         return
 
-    _, net_name = net_config.split(':', 1)
+    _, net_name = network_mode.split(':', 1)
     return net_name
 
 
@@ -33,7 +41,8 @@ def sort_service_dicts(services):
             service for service in services
             if (name in get_service_names(service.get('links', [])) or
                 name in get_service_names_from_volumes_from(service.get('volumes_from', [])) or
-                name == get_service_name_from_net(service.get('net')))
+                name == get_service_name_from_network_mode(service.get('network_mode')) or
+                name in service.get('depends_on', []))
         ]
 
     def visit(n):
@@ -42,8 +51,10 @@ def sort_service_dicts(services):
                 raise DependencyError('A service can not link to itself: %s' % n['name'])
             if n['name'] in n.get('volumes_from', []):
                 raise DependencyError('A service can not mount itself as volume: %s' % n['name'])
-            else:
-                raise DependencyError('Circular import between %s' % ' and '.join(temporary_marked))
+            if n['name'] in n.get('depends_on', []):
+                raise DependencyError('A service can not depend on itself: %s' % n['name'])
+            raise DependencyError('Circular dependency between %s' % ' and '.join(temporary_marked))
+
         if n in unmarked:
             temporary_marked.add(n['name'])
             for m in get_service_dependents(n, services):
diff --git a/compose/config/types.py b/compose/config/types.py
index b872cba9..fc3347c8 100644
--- a/compose/config/types.py
+++ b/compose/config/types.py
@@ -7,6 +7,7 @@ from __future__ import unicode_literals
 import os
 from collections import namedtuple
 
+from compose.config.config import V1
 from compose.config.errors import ConfigurationError
 from compose.const import IS_WINDOWS_PLATFORM
 
@@ -16,7 +17,7 @@ class VolumeFromSpec(namedtuple('_VolumeFromSpec', 'source mode type')):
     # TODO: drop service_names arg when v1 is removed
     @classmethod
     def parse(cls, volume_from_config, service_names, version):
-        func = cls.parse_v1 if version == 1 else cls.parse_v2
+        func = cls.parse_v1 if version == V1 else cls.parse_v2
         return func(service_names, volume_from_config)
 
     @classmethod
@@ -163,3 +164,26 @@ class VolumeSpec(namedtuple('_VolumeSpec', 'external internal mode')):
     def repr(self):
         external = self.external + ':' if self.external else ''
         return '{ext}{v.internal}:{v.mode}'.format(ext=external, v=self)
+
+    @property
+    def is_named_volume(self):
+        return self.external and not self.external.startswith(('.', '/', '~'))
+
+
+class ServiceLink(namedtuple('_ServiceLink', 'target alias')):
+
+    @classmethod
+    def parse(cls, link_spec):
+        target, _, alias = link_spec.partition(':')
+        if not alias:
+            alias = target
+        return cls(target, alias)
+
+    def repr(self):
+        if self.target == self.alias:
+            return self.target
+        return '{s.target}:{s.alias}'.format(s=self)
+
+    @property
+    def merge_field(self):
+        return self.alias
diff --git a/compose/config/validation.py b/compose/config/validation.py
index 639e8bed..60ee5c93 100644
--- a/compose/config/validation.py
+++ b/compose/config/validation.py
@@ -15,6 +15,8 @@ from jsonschema import RefResolver
 from jsonschema import ValidationError
 
 from .errors import ConfigurationError
+from .errors import VERSION_EXPLANATION
+from .sort_services import get_service_name_from_network_mode
 
 
 log = logging.getLogger(__name__)
@@ -62,46 +64,78 @@ def format_expose(instance):
 
 @FormatChecker.cls_checks(format="bool-value-in-mapping")
 def format_boolean_in_environment(instance):
-    """
-    Check if there is a boolean in the environment and display a warning.
+    """Check if there is a boolean in the mapping sections and display a warning.
     Always return True here so the validation won't raise an error.
     """
     if isinstance(instance, bool):
         log.warn(
-            "There is a boolean value in the 'environment' key.\n"
-            "Environment variables can only be strings.\n"
-            "Please add quotes to any boolean values to make them string "
-            "(eg, 'True', 'yes', 'N').\n"
+            "There is a boolean value in the 'environment', 'labels', or "
+            "'extra_hosts' field of a service.\n"
+            "These sections only support string values.\n"
+            "Please add quotes to any boolean values to make them strings "
+            "(eg, 'True', 'false', 'yes', 'N', 'on', 'Off').\n"
             "This warning will become an error in a future release. \r\n"
         )
     return True
 
 
-def validate_top_level_service_objects(filename, service_dicts):
-    """Perform some high level validation of the service name and value.
-
-    This validation must happen before interpolation, which must happen
-    before the rest of validation, which is why it's separate from the
-    rest of the service validation.
-    """
-    for service_name, service_dict in service_dicts.items():
-        if not isinstance(service_name, six.string_types):
+def match_named_volumes(service_dict, project_volumes):
+    service_volumes = service_dict.get('volumes', [])
+    for volume_spec in service_volumes:
+        if volume_spec.is_named_volume and volume_spec.external not in project_volumes:
             raise ConfigurationError(
-                "In file '{}' service name: {} needs to be a string, eg '{}'".format(
-                    filename,
-                    service_name,
-                    service_name))
-
-        if not isinstance(service_dict, dict):
-            raise ConfigurationError(
-                "In file '{}' service '{}' doesn\'t have any configuration options. "
-                "All top level keys in your docker-compose.yml must map "
-                "to a dictionary of configuration options.".format(
-                    filename, service_name
+                'Named volume "{0}" is used in service "{1}" but no'
+                ' declaration was found in the volumes section.'.format(
+                    volume_spec.repr(), service_dict.get('name')
                 )
             )
 
 
+def python_type_to_yaml_type(type_):
+    type_name = type(type_).__name__
+    return {
+        'dict': 'mapping',
+        'list': 'array',
+        'int': 'number',
+        'float': 'number',
+        'bool': 'boolean',
+        'unicode': 'string',
+        'str': 'string',
+        'bytes': 'string',
+    }.get(type_name, type_name)
+
+
+def validate_config_section(filename, config, section):
+    """Validate the structure of a configuration section. This must be done
+    before interpolation so it's separate from schema validation.
+    """
+    if not isinstance(config, dict):
+        raise ConfigurationError(
+            "In file '{filename}', {section} must be a mapping, not "
+            "{type}.".format(
+                filename=filename,
+                section=section,
+                type=anglicize_json_type(python_type_to_yaml_type(config))))
+
+    for key, value in config.items():
+        if not isinstance(key, six.string_types):
+            raise ConfigurationError(
+                "In file '{filename}', the {section} name {name} must be a "
+                "quoted string, i.e. '{name}'.".format(
+                    filename=filename,
+                    section=section,
+                    name=key))
+
+        if not isinstance(value, (dict, type(None))):
+            raise ConfigurationError(
+                "In file '{filename}', {section} '{name}' must be a mapping not "
+                "{type}.".format(
+                    filename=filename,
+                    section=section,
+                    name=key,
+                    type=anglicize_json_type(python_type_to_yaml_type(value))))
+
+
 def validate_top_level_object(config_file):
     if not isinstance(config_file.config, dict):
         raise ConfigurationError(
@@ -110,6 +144,18 @@ def validate_top_level_object(config_file):
                 type(config_file.config)))
 
 
+def validate_ulimits(service_config):
+    ulimit_config = service_config.config.get('ulimits', {})
+    for limit_name, soft_hard_values in six.iteritems(ulimit_config):
+        if isinstance(soft_hard_values, dict):
+            if not soft_hard_values['soft'] <= soft_hard_values['hard']:
+                raise ConfigurationError(
+                    "Service '{s.name}' has invalid ulimit '{ulimit}'. "
+                    "'soft' value can not be greater than 'hard' value ".format(
+                        s=service_config,
+                        ulimit=ulimit_config))
+
+
 def validate_extends_file_path(service_name, extends_options, filename):
     """
     The service to be extended must either be defined in the config key 'file',
@@ -123,24 +169,50 @@ def validate_extends_file_path(service_name, extends_options, filename):
         )
 
 
-def get_unsupported_config_msg(service_name, error_key):
-    msg = "Unsupported config option for '{}' service: '{}'".format(service_name, error_key)
+def validate_network_mode(service_config, service_names):
+    network_mode = service_config.config.get('network_mode')
+    if not network_mode:
+        return
+
+    if 'networks' in service_config.config:
+        raise ConfigurationError("'network_mode' and 'networks' cannot be combined")
+
+    dependency = get_service_name_from_network_mode(network_mode)
+    if not dependency:
+        return
+
+    if dependency not in service_names:
+        raise ConfigurationError(
+            "Service '{s.name}' uses the network stack of service '{dep}' which "
+            "is undefined.".format(s=service_config, dep=dependency))
+
+
+def validate_depends_on(service_config, service_names):
+    for dependency in service_config.config.get('depends_on', []):
+        if dependency not in service_names:
+            raise ConfigurationError(
+                "Service '{s.name}' depends on service '{dep}' which is "
+                "undefined.".format(s=service_config, dep=dependency))
+
+
+def get_unsupported_config_msg(path, error_key):
+    msg = "Unsupported config option for {}: '{}'".format(path_string(path), error_key)
     if error_key in DOCKER_CONFIG_HINTS:
         msg += " (did you mean '{}'?)".format(DOCKER_CONFIG_HINTS[error_key])
     return msg
 
 
-def anglicize_validator(validator):
-    if validator in ["array", "object"]:
-        return 'an ' + validator
-    return 'a ' + validator
+def anglicize_json_type(json_type):
+    if json_type.startswith(('a', 'e', 'i', 'o', 'u')):
+        return 'an ' + json_type
+    return 'a ' + json_type
 
 
 def is_service_dict_schema(schema_id):
     return schema_id == 'fields_schema_v1.json' or schema_id == '#/properties/services'
 
 
-def handle_error_for_schema_with_id(error, service_name):
+def handle_error_for_schema_with_id(error, path):
     schema_id = error.schema['id']
 
     if is_service_dict_schema(schema_id) and error.validator == 'additionalProperties':
@@ -164,62 +236,66 @@ def handle_error_for_schema_with_id(error, service_name):
         # TODO: only applies to v1
         if 'image' in error.instance and context:
             return (
-                "Service '{}' has both an image and build path specified. "
+                "{} has both an image and build path specified. "
                 "A service can either be built to image or use an existing "
-                "image, not both.".format(service_name))
+                "image, not both.".format(path_string(path)))
         if 'image' not in error.instance and not context:
             return (
-                "Service '{}' has neither an image nor a build path "
-                "specified. At least one must be provided.".format(service_name))
+                "{} has neither an image nor a build path specified. "
+                "At least one must be provided.".format(path_string(path)))
         # TODO: only applies to v1
         if 'image' in error.instance and dockerfile:
             return (
-                "Service '{}' has both an image and alternate Dockerfile. "
+                "{} has both an image and alternate Dockerfile. "
                 "A service can either be built to image or use an existing "
-                "image, not both.".format(service_name))
+                "image, not both.".format(path_string(path)))
 
-    if schema_id == '#/definitions/service':
-        if error.validator == 'additionalProperties':
+    if error.validator == 'additionalProperties':
+        if schema_id == '#/definitions/service':
             invalid_config_key = parse_key_from_error_msg(error)
-            return get_unsupported_config_msg(service_name, invalid_config_key)
+            return get_unsupported_config_msg(path, invalid_config_key)
+
+        if not error.path:
+            return '{}\n{}'.format(error.message, VERSION_EXPLANATION)
 
 
-def handle_generic_service_error(error, service_name):
-    config_key = " ".join("'%s'" % k for k in error.path)
+def handle_generic_service_error(error, path):
     msg_format = None
     error_msg = error.message
 
     if error.validator == 'oneOf':
-        msg_format = "Service '{}' configuration key {} {}"
-        error_msg = _parse_oneof_validator(error)
+        msg_format = "{path} {msg}"
+        config_key, error_msg = _parse_oneof_validator(error)
+        if config_key:
+            path.append(config_key)
 
     elif error.validator == 'type':
-        msg_format = ("Service '{}' configuration key {} contains an invalid "
-                      "type, it should be {}")
+        msg_format = "{path} contains an invalid type, it should be {msg}"
         error_msg = _parse_valid_types_from_validator(error.validator_value)
 
-    # TODO: no test case for this branch, there are no config options
-    # which exercise this branch
     elif error.validator == 'required':
-        msg_format = "Service '{}' configuration key '{}' is invalid, {}"
+        error_msg = ", ".join(error.validator_value)
+        msg_format = "{path} is invalid, {msg} is required."
 
     elif error.validator == 'dependencies':
-        msg_format = "Service '{}' configuration key '{}' is invalid: {}"
         config_key = list(error.validator_value.keys())[0]
         required_keys = ",".join(error.validator_value[config_key])
+
+        msg_format = "{path} is invalid: {msg}"
+        path.append(config_key)
         error_msg = "when defining '{}' you must set '{}' as well".format(
             config_key,
             required_keys)
 
     elif error.cause:
         error_msg = six.text_type(error.cause)
-        msg_format = "Service '{}' configuration key {} is invalid: {}"
+        msg_format = "{path} is invalid: {msg}"
 
     elif error.path:
-        msg_format = "Service '{}' configuration key {} value {}"
+        msg_format = "{path} value {msg}"
 
     if msg_format:
-        return msg_format.format(service_name, config_key, error_msg)
+        return msg_format.format(path=path_string(path), msg=error_msg)
 
     return error.message
 
@@ -228,19 +304,23 @@ def parse_key_from_error_msg(error):
     return error.message.split("'")[1]
 
 
+def path_string(path):
+    return ".".join(c for c in path if isinstance(c, six.string_types))
+
+
 def _parse_valid_types_from_validator(validator):
     """A validator value can be either an array of valid types or a string of
     a valid type. Parse the valid types and prefix with the correct article.
     """
     if not isinstance(validator, list):
-        return anglicize_validator(validator)
+        return anglicize_json_type(validator)
 
     if len(validator) == 1:
-        return anglicize_validator(validator[0])
+        return anglicize_json_type(validator[0])
 
     return "{}, or {}".format(
-        ", ".join([anglicize_validator(validator[0])] + validator[1:-1]),
-        anglicize_validator(validator[-1]))
+        ", ".join([anglicize_json_type(validator[0])] + validator[1:-1]),
+        anglicize_json_type(validator[-1]))
 
 
 def _parse_oneof_validator(error):
@@ -252,53 +332,57 @@ def _parse_oneof_validator(error):
     types = []
     for context in error.context:
 
+        if context.validator == 'oneOf':
+            _, error_msg = _parse_oneof_validator(context)
+            return path_string(context.path), error_msg
+
         if context.validator == 'required':
-            return context.message
+            return (None, context.message)
 
         if context.validator == 'additionalProperties':
             invalid_config_key = parse_key_from_error_msg(context)
-            return "contains unsupported option: '{}'".format(invalid_config_key)
+            return (None, "contains unsupported option: '{}'".format(invalid_config_key))
 
         if context.path:
-            invalid_config_key = " ".join(
-                "'{}' ".format(fragment) for fragment in context.path
-                if isinstance(fragment, six.string_types)
+            return (
+                path_string(context.path),
+                "contains {}, which is an invalid type, it should be {}".format(
+                    json.dumps(context.instance),
+                    _parse_valid_types_from_validator(context.validator_value)),
             )
-            return "{}contains {}, which is an invalid type, it should be {}".format(
-                invalid_config_key,
-                # Always print the json repr of the invalid value
-                json.dumps(context.instance),
-                _parse_valid_types_from_validator(context.validator_value))
 
         if context.validator == 'uniqueItems':
-            return "contains non unique items, please remove duplicates from {}".format(
-                context.instance)
+            return (
+                None,
+                "contains non unique items, please remove duplicates from {}".format(
+                    context.instance),
+            )
 
         if context.validator == 'type':
             types.append(context.validator_value)
 
     valid_types = _parse_valid_types_from_validator(types)
-    return "contains an invalid type, it should be {}".format(valid_types)
+    return (None, "contains an invalid type, it should be {}".format(valid_types))
 
 
-def process_errors(errors, service_name=None):
+def process_errors(errors, path_prefix=None):
     """jsonschema gives us an error tree full of information to explain what has
     gone wrong. Process each error and pull out relevant information and re-write
     helpful error messages that are relevant.
     """
-    def format_error_message(error, service_name):
-        if not service_name and error.path:
-            # field_schema errors will have service name on the path
-            service_name = error.path.popleft()
+    path_prefix = path_prefix or []
+
+    def format_error_message(error):
+        path = path_prefix + list(error.path)
 
         if 'id' in error.schema:
-            error_msg = handle_error_for_schema_with_id(error, service_name)
+            error_msg = handle_error_for_schema_with_id(error, path)
             if error_msg:
                 return error_msg
 
-        return handle_generic_service_error(error, service_name)
+        return handle_generic_service_error(error, path)
 
-    return '\n'.join(format_error_message(error, service_name) for error in errors)
+    return '\n'.join(format_error_message(error) for error in errors)
 
 
 def validate_against_fields_schema(config_file):
@@ -315,14 +399,14 @@ def validate_against_service_schema(config, service_name, version):
         config,
         "service_schema_v{0}.json".format(version),
         format_checker=["ports"],
-        service_name=service_name)
+        path_prefix=[service_name])
 
 
 def _validate_against_schema(
         config,
         schema_filename,
         format_checker=(),
-        service_name=None,
+        path_prefix=None,
         filename=None):
     config_source_dir = os.path.dirname(os.path.abspath(__file__))
 
@@ -348,7 +432,7 @@ def _validate_against_schema(
     if not errors:
         return
 
-    error_msg = process_errors(errors, service_name)
+    error_msg = process_errors(errors, path_prefix=path_prefix)
     file_msg = " in file '{}'".format(filename) if filename else ''
     raise ConfigurationError("Validation failed{}, reason(s):\n{}".format(
         file_msg,
diff --git a/compose/const.py b/compose/const.py
index 6ff108fb..db5e2fb4 100644
--- a/compose/const.py
+++ b/compose/const.py
@@ -14,9 +14,16 @@ LABEL_PROJECT = 'com.docker.compose.project'
 LABEL_SERVICE = 'com.docker.compose.service'
 LABEL_VERSION = 'com.docker.compose.version'
 LABEL_CONFIG_HASH = 'com.docker.compose.config-hash'
-COMPOSEFILE_VERSIONS = (1, 2)
+
+COMPOSEFILE_V1 = '1'
+COMPOSEFILE_V2_0 = '2.0'
 
 API_VERSIONS = {
-    1: '1.21',
-    2: '1.22',
+    COMPOSEFILE_V1: '1.21',
+    COMPOSEFILE_V2_0: '1.22',
+}
+
+API_VERSION_TO_ENGINE_VERSION = {
+    API_VERSIONS[COMPOSEFILE_V1]: '1.9.0',
+    API_VERSIONS[COMPOSEFILE_V2_0]: '1.10.0'
 }
diff --git a/compose/container.py b/compose/container.py
index 2565c8ff..c96b63ef 100644
--- a/compose/container.py
+++ b/compose/container.py
@@ -60,7 +60,7 @@ class Container(object):
 
     @property
     def short_id(self):
-        return self.id[:10]
+        return self.id[:12]
 
     @property
     def name(self):
@@ -134,7 +134,11 @@ class Container(object):
 
     @property
     def environment(self):
-        return dict(var.split("=", 1) for var in self.get('Config.Env') or [])
+        def parse_env(var):
+            if '=' in var:
+                return var.split("=", 1)
+            return var, None
+        return dict(parse_env(var) for var in self.get('Config.Env') or [])
 
     @property
     def exit_code(self):
diff --git a/compose/network.py b/compose/network.py
index eaad770c..135502cc 100644
--- a/compose/network.py
+++ b/compose/network.py
@@ -4,6 +4,8 @@ from __future__ import unicode_literals
 import logging
 
 from docker.errors import NotFound
+from docker.utils import create_ipam_config
+from docker.utils import create_ipam_pool
 
 from .config import ConfigurationError
 
@@ -13,12 +15,13 @@ log = logging.getLogger(__name__)
 
 class Network(object):
     def __init__(self, client, project, name, driver=None, driver_opts=None,
-                 external_name=None):
+                 ipam=None, external_name=None):
         self.client = client
         self.project = project
         self.name = name
         self.driver = driver
         self.driver_opts = driver_opts
+        self.ipam = create_ipam_config_from_dict(ipam)
         self.external_name = external_name
 
     def ensure(self):
@@ -44,11 +47,11 @@ class Network(object):
             data = self.inspect()
             if self.driver and data['Driver'] != self.driver:
                 raise ConfigurationError(
-                    'Network {} needs to be recreated - driver has changed'
+                    'Network "{}" needs to be recreated - driver has changed'
                     .format(self.full_name))
             if data['Options'] != (self.driver_opts or {}):
                 raise ConfigurationError(
-                    'Network {} needs to be recreated - options have changed'
+                    'Network "{}" needs to be recreated - options have changed'
                     .format(self.full_name))
         except NotFound:
             driver_name = 'the default driver'
@@ -61,7 +64,10 @@ class Network(object):
             )
 
             self.client.create_network(
-                self.full_name, self.driver, self.driver_opts
+                name=self.full_name,
+                driver=self.driver,
+                options=self.driver_opts,
+                ipam=self.ipam,
             )
 
     def remove(self):
@@ -80,3 +86,102 @@ class Network(object):
         if self.external_name:
             return self.external_name
         return '{0}_{1}'.format(self.project, self.name)
+
+
+def create_ipam_config_from_dict(ipam_dict):
+    if not ipam_dict:
+        return None
+
+    return create_ipam_config(
+        driver=ipam_dict.get('driver'),
+        pool_configs=[
+            create_ipam_pool(
+                subnet=config.get('subnet'),
+                iprange=config.get('ip_range'),
+                gateway=config.get('gateway'),
+                aux_addresses=config.get('aux_addresses'),
+            )
+            for config in ipam_dict.get('config', [])
+        ],
+    )
+
+
+def build_networks(name, config_data, client):
+    network_config = config_data.networks or {}
+    networks = {
+        network_name: Network(
+            client=client, project=name, name=network_name,
+            driver=data.get('driver'),
+            driver_opts=data.get('driver_opts'),
+            ipam=data.get('ipam'),
+            external_name=data.get('external_name'),
+        )
+        for network_name, data in network_config.items()
+    }
+
+    if 'default' not in networks:
+        networks['default'] = Network(client, name, 'default')
+
+    return networks
+
+
+class ProjectNetworks(object):
+
+    def __init__(self, networks, use_networking):
+        self.networks = networks or {}
+        self.use_networking = use_networking
+
+    @classmethod
+    def from_services(cls, services, networks, use_networking):
+        service_networks = {
+            network: networks.get(network)
+            for service in services
+            for network in get_network_names_for_service(service)
+        }
+        unused = set(networks) - set(service_networks) - {'default'}
+        if unused:
+            log.warn(
+                "Some networks were defined but are not used by any service: "
+                "{}".format(", ".join(unused)))
+        return cls(service_networks, use_networking)
+
+    def remove(self):
+        if not self.use_networking:
+            return
+        for network in self.networks.values():
+            network.remove()
+
+    def initialize(self):
+        if not self.use_networking:
+            return
+
+        for network in self.networks.values():
+            network.ensure()
+
+
+def get_network_aliases_for_service(service_dict):
+    if 'network_mode' in service_dict:
+        return {}
+    networks = service_dict.get('networks', {'default': None})
+    return dict(
+        (net, (config or {}).get('aliases', []))
+        for net, config in networks.items()
+    )
+
+
+def get_network_names_for_service(service_dict):
+    return get_network_aliases_for_service(service_dict).keys()
+
+
+def get_networks(service_dict, network_definitions):
+    networks = {}
+    for name, aliases in get_network_aliases_for_service(service_dict).items():
+        network = network_definitions.get(name)
+        if network:
+            networks[network.full_name] = aliases
+        else:
+            raise ConfigurationError(
+                'Service "{}" uses an undefined network "{}"'
+                .format(service_dict['name'], name))
+
+    return networks
diff --git a/compose/project.py b/compose/project.py
index 1322c990..cfb11aa0 100644
--- a/compose/project.py
+++ b/compose/project.py
@@ -6,25 +6,28 @@ import logging
 from functools import reduce
 
 from docker.errors import APIError
-from docker.errors import NotFound
 
 from . import parallel
 from .config import ConfigurationError
-from .config.sort_services import get_service_name_from_net
+from .config.config import V1
+from .config.sort_services import get_container_name_from_network_mode
+from .config.sort_services import get_service_name_from_network_mode
 from .const import DEFAULT_TIMEOUT
 from .const import IMAGE_EVENTS
 from .const import LABEL_ONE_OFF
 from .const import LABEL_PROJECT
 from .const import LABEL_SERVICE
 from .container import Container
-from .network import Network
-from .service import ContainerNet
+from .network import build_networks
+from .network import get_networks
+from .network import ProjectNetworks
+from .service import ContainerNetworkMode
 from .service import ConvergenceStrategy
-from .service import Net
+from .service import NetworkMode
 from .service import Service
-from .service import ServiceNet
+from .service import ServiceNetworkMode
 from .utils import microseconds_from_time_nano
-from .volume import Volume
+from .volume import ProjectVolumes
 
 
 log = logging.getLogger(__name__)
@@ -34,15 +37,12 @@ class Project(object):
     """
     A collection of services.
     """
-    def __init__(self, name, services, client, networks=None, volumes=None,
-                 use_networking=False, network_driver=None):
+    def __init__(self, name, services, client, networks=None, volumes=None):
         self.name = name
         self.services = services
         self.client = client
-        self.use_networking = use_networking
-        self.network_driver = network_driver
-        self.networks = networks or []
-        self.volumes = volumes or []
+        self.volumes = volumes or ProjectVolumes({})
+        self.networks = networks or ProjectNetworks({}, False)
 
     def labels(self, one_off=False):
         return [
@@ -55,60 +55,47 @@ class Project(object):
         """
         Construct a Project from a config.Config object.
         """
-        use_networking = (config_data.version and config_data.version >= 2)
-        project = cls(name, [], client, use_networking=use_networking)
-
-        custom_networks = []
-        if config_data.networks:
-            for network_name, data in config_data.networks.items():
-                custom_networks.append(
-                    Network(
-                        client=client, project=name, name=network_name,
-                        driver=data.get('driver'),
-                        driver_opts=data.get('driver_opts'),
-                        external_name=data.get('external_name'),
-                    )
-                )
+        use_networking = (config_data.version and config_data.version != V1)
+        networks = build_networks(name, config_data, client)
+        project_networks = ProjectNetworks.from_services(
+            config_data.services,
+            networks,
+            use_networking)
+        volumes = ProjectVolumes.from_config(name, config_data, client)
+        project = cls(name, [], client, project_networks, volumes)
 
         for service_dict in config_data.services:
+            service_dict = dict(service_dict)
             if use_networking:
-                networks = get_networks(
-                    service_dict,
-                    custom_networks + [project.default_network])
-                net = Net(networks[0]) if networks else Net("none")
-                links = []
+                service_networks = get_networks(service_dict, networks)
             else:
-                networks = []
-                net = project.get_net(service_dict)
-                links = project.get_links(service_dict)
+                service_networks = {}
 
+            service_dict.pop('networks', None)
+            links = project.get_links(service_dict)
+            network_mode = project.get_network_mode(
+                service_dict, list(service_networks.keys())
+            )
             volumes_from = get_volumes_from(project, service_dict)
 
+            if config_data.version != V1:
+                service_dict['volumes'] = [
+                    volumes.namespace_spec(volume_spec)
+                    for volume_spec in service_dict.get('volumes', [])
+                ]
+
             project.services.append(
                 Service(
+                    service_dict.pop('name'),
                     client=client,
                     project=name,
                     use_networking=use_networking,
-                    networks=networks,
+                    networks=service_networks,
                     links=links,
-                    net=net,
+                    network_mode=network_mode,
                     volumes_from=volumes_from,
-                    **service_dict))
-
-        project.networks += custom_networks
-        if project.uses_default_network():
-            project.networks.append(project.default_network)
-
-        if config_data.volumes:
-            for vol_name, data in config_data.volumes.items():
-                project.volumes.append(
-                    Volume(
-                        client=client, project=name, name=vol_name,
-                        driver=data.get('driver'),
-                        driver_opts=data.get('driver_opts'),
-                        external_name=data.get('external_name')
-                    )
-                )
+                    **service_dict)
+            )
 
         return project
 
@@ -188,27 +175,27 @@ class Project(object):
             del service_dict['links']
         return links
 
-    def get_net(self, service_dict):
-        net = service_dict.pop('net', None)
-        if not net:
-            return Net(None)
+    def get_network_mode(self, service_dict, networks):
+        network_mode = service_dict.pop('network_mode', None)
+        if not network_mode:
+            if self.networks.use_networking:
+                return NetworkMode(networks[0]) if networks else NetworkMode('none')
+            return NetworkMode(None)
 
-        net_name = get_service_name_from_net(net)
-        if not net_name:
-            return Net(net)
+        service_name = get_service_name_from_network_mode(network_mode)
+        if service_name:
+            return ServiceNetworkMode(self.get_service(service_name))
 
-        try:
-            return ServiceNet(self.get_service(net_name))
-        except NoSuchService:
-            pass
-        try:
-            return ContainerNet(Container.from_id(self.client, net_name))
-        except APIError:
-            raise ConfigurationError(
-                'Service "%s" is trying to use the network of "%s", '
-                'which is not the name of a service or container.' % (
-                    service_dict['name'],
-                    net_name))
+        container_name = get_container_name_from_network_mode(network_mode)
+        if container_name:
+            try:
+                return ContainerNetworkMode(Container.from_id(self.client, container_name))
+            except APIError:
+                raise ConfigurationError(
+                    "Service '{name}' uses the network stack of container '{dep}' which "
+                    "does not exist.".format(name=service_dict['name'], dep=container_name))
+
+        return NetworkMode(network_mode)
 
     def start(self, service_names=None, **options):
         containers = []
@@ -236,49 +223,13 @@ class Project(object):
     def remove_stopped(self, service_names=None, **options):
         parallel.parallel_remove(self.containers(service_names, stopped=True), options)
 
-    def initialize_volumes(self):
-        try:
-            for volume in self.volumes:
-                if volume.external:
-                    log.debug(
-                        'Volume {0} declared as external. No new '
-                        'volume will be created.'.format(volume.name)
-                    )
-                    if not volume.exists():
-                        raise ConfigurationError(
-                            'Volume {name} declared as external, but could'
-                            ' not be found. Please create the volume manually'
-                            ' using `{command}{name}` and try again.'.format(
-                                name=volume.full_name,
-                                command='docker volume create --name='
-                            )
-                        )
-                    continue
-                volume.create()
-        except NotFound:
-            raise ConfigurationError(
-                'Volume %s specifies nonexistent driver %s' % (volume.name, volume.driver)
-            )
-        except APIError as e:
-            if 'Choose a different volume name' in str(e):
-                raise ConfigurationError(
-                    'Configuration for volume {0} specifies driver {1}, but '
-                    'a volume with the same name uses a different driver '
-                    '({3}). If you wish to use the new configuration, please '
-                    'remove the existing volume "{2}" first:\n'
-                    '$ docker volume rm {2}'.format(
-                        volume.name, volume.driver, volume.full_name,
-                        volume.inspect()['Driver']
-                    )
-                )
-
     def down(self, remove_image_type, include_volumes):
         self.stop()
         self.remove_stopped(v=include_volumes)
-        self.remove_networks()
+        self.networks.remove()
 
         if include_volumes:
-            self.remove_volumes()
+            self.volumes.remove()
 
         self.remove_images(remove_image_type)
 
@@ -286,33 +237,6 @@ class Project(object):
         for service in self.get_services():
             service.remove_image(remove_image_type)
 
-    def remove_networks(self):
-        if not self.use_networking:
-            return
-        for network in self.networks:
-            network.remove()
-
-    def remove_volumes(self):
-        for volume in self.volumes:
-            volume.remove()
-
-    def initialize_networks(self):
-        if not self.use_networking:
-            return
-
-        for network in self.networks:
-            network.ensure()
-
-    def uses_default_network(self):
-        return any(
-            self.default_network.full_name in service.networks
-            for service in self.services
-        )
-
-    @property
-    def default_network(self):
-        return Network(client=self.client, project=self.name, name='default')
-
     def restart(self, service_names=None, **options):
         containers = self.containers(service_names, stopped=True)
         parallel.parallel_restart(containers, options)
@@ -378,13 +302,12 @@ class Project(object):
            timeout=DEFAULT_TIMEOUT,
            detached=False):
 
-        services = self.get_services_without_duplicate(service_names, include_deps=start_deps)
+        self.initialize()
+        services = self.get_services_without_duplicate(
+            service_names,
+            include_deps=start_deps)
 
         plans = self._get_convergence_plans(services, strategy)
-
-        self.initialize_networks()
-        self.initialize_volumes()
-
         return [
             container
             for service in services
@@ -396,6 +319,10 @@ class Project(object):
             )
         ]
 
+    def initialize(self):
+        self.networks.initialize()
+        self.volumes.initialize()
+
     def _get_convergence_plans(self, services, strategy):
         plans = {}
 
@@ -455,22 +382,6 @@ class Project(object):
         return acc + dep_services
 
 
-def get_networks(service_dict, network_definitions):
-    networks = []
-    for name in service_dict.pop('networks', ['default']):
-        if name in ['bridge', 'host']:
-            networks.append(name)
-        else:
-            matches = [n for n in network_definitions if n.name == name]
-            if matches:
-                networks.append(matches[0].full_name)
-            else:
-                raise ConfigurationError(
-                    'Service "{}" uses an undefined network "{}"'
-                    .format(service_dict['name'], name))
-    return networks
-
-
 def get_volumes_from(project, service_dict):
     volumes_from = service_dict.pop('volumes_from', None)
     if not volumes_from:
diff --git a/compose/service.py b/compose/service.py
index f5db07fb..4e169daa 100644
--- a/compose/service.py
+++ b/compose/service.py
@@ -27,9 +27,7 @@ from .const import LABEL_SERVICE
 from .const import LABEL_VERSION
 from .container import Container
 from .parallel import parallel_execute
-from .parallel import parallel_remove
 from .parallel import parallel_start
-from .parallel import parallel_stop
 from .progress_stream import stream_output
 from .progress_stream import StreamOutputError
 from .utils import json_hash
@@ -49,7 +47,6 @@ DOCKER_START_KEYS = [
     'extra_hosts',
     'ipc',
     'read_only',
-    'net',
     'log_driver',
     'log_opt',
     'mem_limit',
@@ -115,7 +112,7 @@ class Service(object):
         use_networking=False,
         links=None,
         volumes_from=None,
-        net=None,
+        network_mode=None,
         networks=None,
         **options
     ):
@@ -125,8 +122,8 @@ class Service(object):
         self.use_networking = use_networking
         self.links = links or []
         self.volumes_from = volumes_from or []
-        self.net = net or Net(None)
-        self.networks = networks or []
+        self.network_mode = network_mode or NetworkMode(None)
+        self.networks = networks or {}
         self.options = options
 
     def containers(self, stopped=False, one_off=False, filters={}):
@@ -180,6 +177,10 @@ class Service(object):
             service.start_container(container)
             return container
 
+        def stop_and_remove(container):
+            container.stop(timeout=timeout)
+            container.remove()
+
         running_containers = self.containers(stopped=False)
         num_running = len(running_containers)
 
@@ -225,14 +226,17 @@ class Service(object):
 
         if desired_num < num_running:
             num_to_stop = num_running - desired_num
+
             sorted_running_containers = sorted(
                 running_containers,
                 key=attrgetter('number'))
-            parallel_stop(
-                sorted_running_containers[-num_to_stop:],
-                dict(timeout=timeout))
 
-        parallel_remove(self.containers(stopped=True), {})
+            parallel_execute(
+                sorted_running_containers[-num_to_stop:],
+                stop_and_remove,
+                lambda c: c.name,
+                "Stopping and removing",
+            )
 
     def create_container(self,
                          one_off=False,
@@ -420,16 +424,23 @@ class Service(object):
             return self.start_container(container)
 
     def start_container(self, container):
-        container.start()
         self.connect_container_to_networks(container)
+        container.start()
         return container
 
     def connect_container_to_networks(self, container):
-        for network in self.networks:
-            log.debug('Connecting "{}" to "{}"'.format(container.name, network))
+        connected_networks = container.get('NetworkSettings.Networks')
+
+        for network, aliases in self.networks.items():
+            if network in connected_networks:
+                self.client.disconnect_container_from_network(
+                    container.id, network)
+
             self.client.connect_container_to_network(
                 container.id, network,
-                aliases=[self.name])
+                aliases=list(self._get_aliases(container).union(aliases)),
+                links=self._get_links(False),
+            )
 
     def remove_duplicate_containers(self, timeout=DEFAULT_TIMEOUT):
         for c in self.duplicate_containers():
@@ -460,7 +471,8 @@ class Service(object):
             'options': self.options,
             'image_id': self.image()['Id'],
             'links': self.get_link_names(),
-            'net': self.net.id,
+            'net': self.network_mode.id,
+            'networks': list(self.networks.keys()),
             'volumes_from': [
                 (v.source.name, v.mode)
                 for v in self.volumes_from if isinstance(v.source, Service)
@@ -468,10 +480,11 @@ class Service(object):
         }
 
     def get_dependency_names(self):
-        net_name = self.net.service_name
+        net_name = self.network_mode.service_name
         return (self.get_linked_service_names() +
                 self.get_volumes_from_names() +
-                ([net_name] if net_name else []))
+                ([net_name] if net_name else []) +
+                self.options.get('depends_on', []))
 
     def get_linked_service_names(self):
         return [service.name for (service, _) in self.links]
@@ -498,28 +511,38 @@ class Service(object):
         numbers = [c.number for c in containers]
         return 1 if not numbers else max(numbers) + 1
 
-    def _get_links(self, link_to_self):
-        if self.use_networking:
-            return []
+    def _get_aliases(self, container):
+        if container.labels.get(LABEL_ONE_OFF) == "True":
+            return set()
+
+        return {self.name, container.short_id}
+
+    def _get_links(self, link_to_self):
+        links = {}
 
-        links = []
         for service, link_name in self.links:
             for container in service.containers():
-                links.append((container.name, link_name or service.name))
-                links.append((container.name, container.name))
-                links.append((container.name, container.name_without_project))
+                links[link_name or service.name] = container.name
+                links[container.name] = container.name
+                links[container.name_without_project] = container.name
+
         if link_to_self:
             for container in self.containers():
-                links.append((container.name, self.name))
-                links.append((container.name, container.name))
-                links.append((container.name, container.name_without_project))
+                links[self.name] = container.name
+                links[container.name] = container.name
+                links[container.name_without_project] = container.name
+
         for external_link in self.options.get('external_links') or []:
             if ':' not in external_link:
                 link_name = external_link
             else:
                 external_link, link_name = external_link.split(':')
-            links.append((external_link, link_name))
-        return links
+            links[link_name] = external_link
+
+        return [
+            (alias, container_name)
+            for (container_name, alias) in links.items()
+        ]
 
     def _get_volumes_from(self):
         return [build_volume_from(spec) for spec in self.volumes_from]
@@ -568,20 +591,19 @@ class Service(object):
                     ports.append(port)
             container_options['ports'] = ports
 
-        override_options['binds'] = merge_volume_bindings(
-            container_options.get('volumes') or [],
-            previous_container)
-
-        if 'volumes' in container_options:
-            container_options['volumes'] = dict(
-                (v.internal, {}) for v in container_options['volumes'])
-
         container_options['environment'] = merge_environment(
             self.options.get('environment'),
             override_options.get('environment'))
 
-        if previous_container:
-            container_options['environment']['affinity:container'] = ('=' + previous_container.id)
+        binds, affinity = merge_volume_bindings(
+            container_options.get('volumes') or [],
+            previous_container)
+        override_options['binds'] = binds
+        container_options['environment'].update(affinity)
+
+        if 'volumes' in container_options:
+            container_options['volumes'] = dict(
+                (v.internal, {}) for v in container_options['volumes'])
 
         container_options['image'] = self.image_name
 
@@ -599,8 +621,8 @@ class Service(object):
             override_options,
             one_off=one_off)
 
-        container_options['networking_config'] = self._get_container_networking_config()
-
+        container_options['environment'] = format_environment(
+            container_options['environment'])
         return container_options
 
     def _get_container_host_config(self, override_options, one_off=False):
@@ -615,7 +637,7 @@ class Service(object):
             binds=options.get('binds'),
             volumes_from=self._get_volumes_from(),
             privileged=options.get('privileged', False),
-            network_mode=self.net.mode,
+            network_mode=self.network_mode.mode,
             devices=options.get('devices'),
             dns=options.get('dns'),
             dns_search=options.get('dns_search'),
@@ -635,13 +657,6 @@ class Service(object):
             cpu_quota=options.get('cpu_quota'),
         )
 
-    def _get_container_networking_config(self):
-        return self.client.create_networking_config({
-            network_name: self.client.create_endpoint_config(aliases=[self.name])
-            for network_name in self.networks
-            if network_name not in ['host', 'bridge']
-        })
-
     def build(self, no_cache=False, pull=False, force_rm=False):
         log.info('Building %s' % self.name)
 
@@ -760,22 +775,22 @@ class Service(object):
                 log.error(six.text_type(e))
 
 
-class Net(object):
+class NetworkMode(object):
     """A `standard` network mode (ex: host, bridge)"""
 
     service_name = None
 
-    def __init__(self, net):
-        self.net = net
+    def __init__(self, network_mode):
+        self.network_mode = network_mode
 
     @property
     def id(self):
-        return self.net
+        return self.network_mode
 
     mode = id
 
 
-class ContainerNet(object):
+class ContainerNetworkMode(object):
     """A network mode that uses a container's network stack."""
 
     service_name = None
@@ -792,7 +807,7 @@ class ContainerNet(object):
         return 'container:' + self.container.id
 
 
-class ServiceNet(object):
+class ServiceNetworkMode(object):
     """A network mode that uses a service's network stack."""
 
     def __init__(self, service):
@@ -861,18 +876,23 @@ def merge_volume_bindings(volumes, previous_container):
     """Return a list of volume bindings for a container. Container data volumes
     are replaced by those from the previous container.
     """
+    affinity = {}
+
     volume_bindings = dict(
         build_volume_binding(volume)
         for volume in volumes
         if volume.external)
 
     if previous_container:
-        data_volumes = get_container_data_volumes(previous_container, volumes)
-        warn_on_masked_volume(volumes, data_volumes, previous_container.service)
+        old_volumes = get_container_data_volumes(previous_container, volumes)
+        warn_on_masked_volume(volumes, old_volumes, previous_container.service)
         volume_bindings.update(
-            build_volume_binding(volume) for volume in data_volumes)
+            build_volume_binding(volume) for volume in old_volumes)
 
-    return list(volume_bindings.values())
+        if old_volumes:
+            affinity = {'affinity:container': '=' + previous_container.id}
+
+    return list(volume_bindings.values()), affinity
 
 
 def get_container_data_volumes(container, volumes_option):
@@ -904,8 +924,12 @@ def get_container_data_volumes(container, volumes_option):
         if not mount:
             continue
 
+        # Volume was previously a host volume, now it's a container volume
+        if not mount.get('Name'):
+            continue
+
         # Copy existing volume from old container
-        volume = volume._replace(external=mount['Source'])
+        volume = volume._replace(external=mount['Name'])
         volumes.append(volume)
 
     return volumes
@@ -996,3 +1020,12 @@ def get_log_config(logging_dict):
         type=log_driver,
         config=log_options
     )
+
+
+# TODO: remove once fix is available in docker-py
+def format_environment(environment):
+    def format_env(key, value):
+        if value is None:
+            return key
+        return '{key}={value}'.format(key=key, value=value)
+    return [format_env(*item) for item in environment.items()]
diff --git a/compose/utils.py b/compose/utils.py
index 29d8a695..494beea3 100644
--- a/compose/utils.py
+++ b/compose/utils.py
@@ -92,3 +92,7 @@ def json_hash(obj):
 
 def microseconds_from_time_nano(time_nano):
     return int(time_nano % 1000000000 / 1000)
+
+
+def build_string_dict(source_dict):
+    return dict((k, str(v)) for k, v in source_dict.items())
diff --git a/compose/volume.py b/compose/volume.py
index 469e406a..26fbda96 100644
--- a/compose/volume.py
+++ b/compose/volume.py
@@ -3,8 +3,10 @@ from __future__ import unicode_literals
 
 import logging
 
+from docker.errors import APIError
 from docker.errors import NotFound
 
+from .config import ConfigurationError
 
 log = logging.getLogger(__name__)
 
@@ -50,3 +52,77 @@ class Volume(object):
         if self.external_name:
             return self.external_name
         return '{0}_{1}'.format(self.project, self.name)
+
+
+class ProjectVolumes(object):
+
+    def __init__(self, volumes):
+        self.volumes = volumes
+
+    @classmethod
+    def from_config(cls, name, config_data, client):
+        config_volumes = config_data.volumes or {}
+        volumes = {
+            vol_name: Volume(
+                client=client,
+                project=name,
+                name=vol_name,
+                driver=data.get('driver'),
+                driver_opts=data.get('driver_opts'),
+                external_name=data.get('external_name')
+            )
+            for vol_name, data in config_volumes.items()
+        }
+        return cls(volumes)
+
+    def remove(self):
+        for volume in self.volumes.values():
+            volume.remove()
+
+    def initialize(self):
+        try:
+            for volume in self.volumes.values():
+                if volume.external:
+                    log.debug(
+                        'Volume {0} declared as external. No new '
+                        'volume will be created.'.format(volume.name)
+                    )
+                    if not volume.exists():
+                        raise ConfigurationError(
+                            'Volume {name} declared as external, but could'
+                            ' not be found. Please create the volume manually'
+                            ' using `{command}{name}` and try again.'.format(
+                                name=volume.full_name,
+                                command='docker volume create --name='
+                            )
+                        )
+                    continue
+                log.info(
+                    'Creating volume "{0}" with {1} driver'.format(
+                        volume.full_name, volume.driver or 'default'
+                    )
+                )
+                volume.create()
+        except NotFound:
+            raise ConfigurationError(
+                'Volume %s specifies nonexistent driver %s' % (volume.name, volume.driver)
+            )
+        except APIError as e:
+            if 'Choose a different volume name' in str(e):
+                raise ConfigurationError(
+                    'Configuration for volume {0} specifies driver {1}, but '
+                    'a volume with the same name uses a different driver '
+                    '({3}). If you wish to use the new configuration, please '
+                    'remove the existing volume "{2}" first:\n'
+                    '$ docker volume rm {2}'.format(
+                        volume.name, volume.driver, volume.full_name,
+                        volume.inspect()['Driver']
+                    )
+                )
+
+    def namespace_spec(self, volume_spec):
+        if not volume_spec.is_named_volume:
+            return volume_spec
+
+        volume = self.volumes[volume_spec.external]
+        return volume_spec._replace(external=volume.full_name)
diff --git a/contrib/completion/bash/docker-compose b/contrib/completion/bash/docker-compose
index 2b020c37..3b135311 100644
--- a/contrib/completion/bash/docker-compose
+++ b/contrib/completion/bash/docker-compose
@@ -17,6 +17,10 @@
 #    . ~/.docker-compose-completion.sh
 
 
+__docker_compose_q() {
+	docker-compose 2>/dev/null ${compose_file:+-f $compose_file} ${compose_project:+-p $compose_project} "$@"
+}
+
 # suppress trailing whitespace
 __docker_compose_nospace() {
 	# compopt is not available in ancient bash versions
@@ -39,7 +43,7 @@ __docker_compose_compose_file() {
 
 # Extracts all service names from the compose file.
 ___docker_compose_all_services_in_compose_file() {
-	awk -F: '/^[a-zA-Z0-9]/{print $1}' "${compose_file:-$(__docker_compose_compose_file)}" 2>/dev/null
+	__docker_compose_q config --services
 }
 
 # All services, even those without an existing container
@@ -49,8 +53,12 @@ __docker_compose_services_all() {
 
 # All services that have an entry with the given key in their compose_file section
 ___docker_compose_services_with_key() {
-	# flatten sections to one line, then filter lines containing the key and return section name.
-	awk '/^[a-zA-Z0-9]/{printf "\n"};{printf $0;next;}' "${compose_file:-$(__docker_compose_compose_file)}" 2>/dev/null | awk -F: -v key=": +$1:" '$0 ~ key {print $1}'
+	# flatten sections under "services" to one line, then filter lines containing the key and return section name
+	__docker_compose_q config \
+		| sed -n -e '/^services:/,/^[^ ]/p' \
+		| sed -n 's/^  //p' \
+		| awk '/^[a-zA-Z0-9]/{printf "\n"};{printf $0;next;}' \
+		| awk -F: -v key=": +$1:" '$0 ~ key {print $1}'
 }
 
 # All services that are defined by a Dockerfile reference
@@ -67,11 +75,9 @@ __docker_compose_services_from_image() {
 # by a boolean expression passed in as argument.
 __docker_compose_services_with() {
 	local containers names
-	containers="$(docker-compose 2>/dev/null ${compose_file:+-f $compose_file} ${compose_project:+-p $compose_project} ps -q)"
-	names=( $(docker 2>/dev/null inspect --format "{{if ${1:-true}}} {{ .Name }} {{end}}" $containers) )
-	names=( ${names[@]%_*} )  # strip trailing numbers
-	names=( ${names[@]#*_} )  # strip project name
-	COMPREPLY=( $(compgen -W "${names[*]}" -- "$cur") )
+	containers="$(__docker_compose_q ps -q)"
+	names=$(docker 2>/dev/null inspect -f "{{if ${1:-true}}}{{range \$k, \$v := .Config.Labels}}{{if eq \$k \"com.docker.compose.service\"}}{{\$v}}{{end}}{{end}}{{end}}" $containers)
+	COMPREPLY=( $(compgen -W "$names" -- "$cur") )
 }
 
 # The services for which at least one paused container exists
@@ -107,6 +113,18 @@ _docker_compose_config() {
 }
 
 
+_docker_compose_create() {
+	case "$cur" in
+		-*)
+			COMPREPLY=( $( compgen -W "--force-recreate --help --no-build --no-recreate" -- "$cur" ) )
+			;;
+		*)
+			__docker_compose_services_all
+			;;
+	esac
+}
+
+
 _docker_compose_docker_compose() {
 	case "$prev" in
 		--file|-f)
@@ -409,6 +427,7 @@ _docker_compose() {
 	local commands=(
 		build
 		config
+		create
 		down
 		events
 		help
diff --git a/contrib/completion/zsh/_docker-compose b/contrib/completion/zsh/_docker-compose
index 01e5f896..f67bc9f6 100644
--- a/contrib/completion/zsh/_docker-compose
+++ b/contrib/completion/zsh/_docker-compose
@@ -179,7 +179,7 @@ __docker-compose_commands() {
         local -a lines
         lines=(${(f)"$(_call_program commands docker-compose 2>&1)"})
         _docker_compose_subcommands=(${${${lines[$((${lines[(i)Commands:]} + 1)),${lines[(I)  *]}]}## #}/ ##/:})
-        _store_cache docker_compose_subcommands _docker_compose_subcommands
+        (( $#_docker_compose_subcommands > 0 )) && _store_cache docker_compose_subcommands _docker_compose_subcommands
     fi
     _describe -t docker-compose-commands "docker-compose command" _docker_compose_subcommands
 }
@@ -203,6 +203,20 @@ __docker-compose_subcommand() {
                 '(--quiet -q)'{--quiet,-q}"[Only validate the configuration, don't print anything.]" \
                 '--services[Print the service names, one per line.]' && ret=0
             ;;
+        (create)
+            _arguments \
+                $opts_help \
+                "(--no-recreate --no-build)--force-recreate[Recreate containers even if their configuration and image haven't changed. Incompatible with --no-recreate.]" \
+                "(--force-recreate)--no-build[If containers already exist, don't recreate them. Incompatible with --force-recreate.]" \
+                "(--force-recreate)--no-recreate[Don't build an image, even if it's missing]" \
+                '*:services:__docker-compose_services_all' && ret=0
+            ;;
+        (down)
+            _arguments \
+                $opts_help \
+                "--rmi[Remove images, type may be one of: 'all' to remove all images, or 'local' to remove only images that don't have an custom name set by the 'image' field]:type:(all local)" \
+                '(-v --volumes)'{-v,--volumes}"[Remove data volumes]" && ret=0
+            ;;
         (events)
             _arguments \
                 $opts_help \
@@ -298,12 +312,13 @@ __docker-compose_subcommand() {
         (up)
             _arguments \
                 $opts_help \
-                '-d[Detached mode: Run containers in the background, print new container names.]' \
+                '(--abort-on-container-exit)-d[Detached mode: Run containers in the background, print new container names.]' \
                 '--no-color[Produce monochrome output.]' \
                 "--no-deps[Don't start linked services.]" \
                 "--force-recreate[Recreate containers even if their configuration and image haven't changed. Incompatible with --no-recreate.]" \
                 "--no-recreate[If containers already exist, don't recreate them.]" \
                 "--no-build[Don't build an image, even if it's missing]" \
+                "(-d)--abort-on-container-exit[Stops all containers if any container was stopped. Incompatible with -d.]" \
                 '(-t --timeout)'{-t,--timeout}"[Specify a shutdown timeout in seconds. (default: 10)]:seconds: " \
                 '*:services:__docker-compose_services_all' && ret=0
             ;;
diff --git a/contrib/migration/migrate-compose-file-v1-to-v2.py b/contrib/migration/migrate-compose-file-v1-to-v2.py
new file mode 100755
index 00000000..c1785b0d
--- /dev/null
+++ b/contrib/migration/migrate-compose-file-v1-to-v2.py
@@ -0,0 +1,173 @@
+#!/usr/bin/env python
+"""
+Migrate a Compose file from the V1 format in Compose 1.5 to the V2 format
+supported by Compose 1.6+
+"""
+from __future__ import absolute_import
+from __future__ import unicode_literals
+
+import argparse
+import logging
+import sys
+
+import ruamel.yaml
+
+from compose.config.types import VolumeSpec
+
+
+log = logging.getLogger('migrate')
+
+
+def migrate(content):
+    data = ruamel.yaml.load(content, ruamel.yaml.RoundTripLoader)
+
+    service_names = data.keys()
+
+    for name, service in data.items():
+        warn_for_links(name, service)
+        warn_for_external_links(name, service)
+        rewrite_net(service, service_names)
+        rewrite_build(service)
+        rewrite_logging(service)
+        rewrite_volumes_from(service, service_names)
+
+    services = {name: data.pop(name) for name in data.keys()}
+
+    data['version'] = "2"
+    data['services'] = services
+    create_volumes_section(data)
+
+    return data
+
+
+def warn_for_links(name, service):
+    links = service.get('links')
+    if links:
+        example_service = links[0].partition(':')[0]
+        log.warn(
+            "Service {name} has links, which no longer create environment "
+            "variables such as {example_service_upper}_PORT. "
+            "If you are using those in your application code, you should "
+            "instead connect directly to the hostname, e.g. "
+            "'{example_service}'."
+            .format(name=name, example_service=example_service,
+                    example_service_upper=example_service.upper()))
+
+
+def warn_for_external_links(name, service):
+    external_links = service.get('external_links')
+    if external_links:
+        log.warn(
+            "Service {name} has external_links: {ext}, which now work "
+            "slightly differently. In particular, two containers must be "
+            "connected to at least one network in common in order to "
+            "communicate, even if explicitly linked together.\n\n"
+            "Either connect the external container to your app's default "
+            "network, or connect both the external container and your "
+            "service's containers to a pre-existing network. See "
+            "https://docs.docker.com/compose/networking/ "
+            "for more on how to do this."
+            .format(name=name, ext=external_links))
+
+
+def rewrite_net(service, service_names):
+    if 'net' in service:
+        network_mode = service.pop('net')
+
+        # "container:<service name>" is now "service:<service name>"
+        if network_mode.startswith('container:'):
+            name = network_mode.partition(':')[2]
+            if name in service_names:
+                network_mode = 'service:{}'.format(name)
+
+        service['network_mode'] = network_mode
+
+
+def rewrite_build(service):
+    if 'dockerfile' in service:
+        service['build'] = {
+            'context': service.pop('build'),
+            'dockerfile': service.pop('dockerfile'),
+        }
+
+
+def rewrite_logging(service):
+    if 'log_driver' in service:
+        service['logging'] = {'driver': service.pop('log_driver')}
+        if 'log_opt' in service:
+            service['logging']['options'] = service.pop('log_opt')
+
+
+def rewrite_volumes_from(service, service_names):
+    for idx, volume_from in enumerate(service.get('volumes_from', [])):
+        if volume_from.split(':', 1)[0] not in service_names:
+            service['volumes_from'][idx] = 'container:%s' % volume_from
+
+
+def create_volumes_section(data):
+    named_volumes = get_named_volumes(data['services'])
+    if named_volumes:
+        log.warn(
+            "Named volumes ({names}) must be explicitly declared. Creating a "
+            "'volumes' section with declarations.\n\n"
+            "For backwards-compatibility, they've been declared as external. "
+            "If you don't mind the volume names being prefixed with the "
+            "project name, you can remove the 'external' option from each one."
+            .format(names=', '.join(list(named_volumes))))
+
+        data['volumes'] = named_volumes
+
+
+def get_named_volumes(services):
+    volume_specs = [
+        VolumeSpec.parse(volume)
+        for service in services.values()
+        for volume in service.get('volumes', [])
+    ]
+    names = {
+        spec.external
+        for spec in volume_specs
+        if spec.is_named_volume
+    }
+    return {name: {'external': True} for name in names}
+
+
+def write(stream, new_format, indent, width):
+    ruamel.yaml.dump(
+        new_format,
+        stream,
+        Dumper=ruamel.yaml.RoundTripDumper,
+        indent=indent,
+        width=width)
+
+
+def parse_opts(args):
+    parser = argparse.ArgumentParser()
+    parser.add_argument("filename", help="Compose file filename.")
+    parser.add_argument("-i", "--in-place", action='store_true')
+    parser.add_argument(
+        "--indent", type=int, default=2,
+        help="Number of spaces used to indent the output yaml.")
+    parser.add_argument(
+        "--width", type=int, default=80,
+        help="Number of spaces used as the output width.")
+    return parser.parse_args()
+
+
+def main(args):
+    logging.basicConfig(format='\033[33m%(levelname)s:\033[37m %(message)s\033[0m\n')
+
+    opts = parse_opts(args)
+
+    with open(opts.filename, 'r') as fh:
+        new_format = migrate(fh.read())
+
+    if opts.in_place:
+        output = open(opts.filename, 'w')
+    else:
+        output = sys.stdout
+    write(output, new_format, opts.indent, opts.width)
+
+
+if __name__ == "__main__":
+    main(sys.argv)
diff --git a/docker-compose.spec b/docker-compose.spec
index f7f2059f..b3d8db39 100644
--- a/docker-compose.spec
+++ b/docker-compose.spec
@@ -23,8 +23,8 @@ exe = EXE(pyz,
                 'DATA'
             ),
             (
-                'compose/config/fields_schema_v2.json',
-                'compose/config/fields_schema_v2.json',
+                'compose/config/fields_schema_v2.0.json',
+                'compose/config/fields_schema_v2.0.json',
                 'DATA'
             ),
             (
@@ -33,8 +33,8 @@ exe = EXE(pyz,
                 'DATA'
             ),
             (
-                'compose/config/service_schema_v2.json',
-                'compose/config/service_schema_v2.json',
+                'compose/config/service_schema_v2.0.json',
+                'compose/config/service_schema_v2.0.json',
                 'DATA'
             ),
             (
diff --git a/docs/Dockerfile b/docs/Dockerfile
index 83b65633..5f32dc4d 100644
--- a/docs/Dockerfile
+++ b/docs/Dockerfile
@@ -5,9 +5,10 @@ RUN svn checkout https://github.com/docker/docker/trunk/docs /docs/content/engin
 RUN svn checkout https://github.com/docker/swarm/trunk/docs /docs/content/swarm
 RUN svn checkout https://github.com/docker/machine/trunk/docs /docs/content/machine
 RUN svn checkout https://github.com/docker/distribution/trunk/docs /docs/content/registry
-RUN svn checkout https://github.com/kitematic/kitematic/trunk/docs /docs/content/kitematic
-RUN svn checkout https://github.com/docker/tutorials/trunk/docs /docs/content/tutorials
-RUN svn checkout https://github.com/docker/opensource/trunk/docs /docs/content
+RUN svn checkout https://github.com/docker/notary/trunk/docs /docs/content/notary
+RUN svn checkout https://github.com/docker/kitematic/trunk/docs /docs/content/kitematic
+RUN svn checkout https://github.com/docker/toolbox/trunk/docs /docs/content/toolbox
+RUN svn checkout https://github.com/docker/opensource/trunk/docs /docs/content/project
 
 ENV PROJECT=compose
 # To get the git info for this repo
diff --git a/docs/README.md b/docs/README.md
index d8ab7c3e..e60fa48c 100644
--- a/docs/README.md
+++ b/docs/README.md
@@ -58,7 +58,7 @@ The top of each Docker Compose documentation file contains TOML metadata. The me
     description = "How to use Docker Compose's extends keyword to share configuration between files and projects"
     keywords = ["fig, composition, compose, docker, orchestration, documentation, docs"]
     [menu.main]
-    parent="smn_workw_compose"
+    parent="workw_compose"
     weight=2
     +++
     <![end-metadata]-->
@@ -70,7 +70,7 @@ The metadata alone has this structure:
     description = "How to use Docker Compose's extends keyword to share configuration between files and projects"
     keywords = ["fig, composition, compose, docker, orchestration, documentation, docs"]
     [menu.main]
-    parent="smn_workw_compose"
+    parent="workw_compose"
     weight=2
     +++
 
diff --git a/docs/completion.md b/docs/completion.md
index cac0d1a6..2076d512 100644
--- a/docs/completion.md
+++ b/docs/completion.md
@@ -4,8 +4,8 @@ title = "Command-line Completion"
 description = "Compose CLI reference"
 keywords = ["fig, composition, compose, docker, orchestration, cli,  reference"]
 [menu.main]
-parent="smn_workw_compose"
-weight=10
+parent="workw_compose"
+weight=88
 +++
 <![end-metadata]-->
 
diff --git a/docs/compose-file.md b/docs/compose-file.md
index ecd135f1..97b8ba51 100644
--- a/docs/compose-file.md
+++ b/docs/compose-file.md
@@ -1,90 +1,45 @@
 <!--[metadata]>
 +++
-title = "Compose file reference"
+title = "Compose File Reference"
 description = "Compose file reference"
 keywords = ["fig, composition, compose, docker"]
 aliases = ["/compose/yml"]
 [menu.main]
-parent="smn_compose_ref"
+parent="workw_compose"
+weight=70
 +++
 <![end-metadata]-->
 
 
 # Compose file reference
 
-The compose file is a [YAML](http://yaml.org/) file where all the top level
-keys are the name of a service, and the values are the service definition.
-The default path for a compose file is `./docker-compose.yml`.
+The Compose file is a [YAML](http://yaml.org/) file defining
+[services](#service-configuration-reference),
+[networks](#network-configuration-reference) and
+[volumes](#volume-configuration-reference).
+The default path for a Compose file is `./docker-compose.yml`.
 
-Each service defined in `docker-compose.yml` must specify exactly one of
-`image` or `build`. Other keys are optional, and are analogous to their
-`docker run` command-line counterparts.
+A service definition contains configuration which will be applied to each
+container started for that service, much like passing command-line parameters to
+`docker run`. Likewise, network and volume definitions are analogous to
+`docker network create` and `docker volume create`.
 
 As with `docker run`, options specified in the Dockerfile (e.g., `CMD`,
 `EXPOSE`, `VOLUME`, `ENV`) are respected by default - you don't need to
 specify them again in `docker-compose.yml`.
 
-## Versioning
-
-It is possible to use different versions of the `compose.yml` format.
-Below are the formats currently supported by compose.
-
-
-### Version 1
-
-Compose files that do not declare a version are considered "version 1". In
-those files, all the [services](#service-configuration-reference) are declared
-at the root of the document.
-
-Version 1 files do not support the declaration of
-named [volumes](#volume-configuration-reference) or
-[build arguments](#args).
-
-Example:
-
-    web:
-      build: .
-      ports:
-       - "5000:5000"
-      volumes:
-       - .:/code
-       - logvolume01:/var/log
-      links:
-       - redis
-    redis:
-      image: redis
-
-
-### Version 2
-
-Compose files using the version 2 syntax must indicate the version number at
-the root of the document. All [services](#service-configuration-reference)
-must be declared under the `services` key.
-Named [volumes](#volume-configuration-reference) must be declared under the
-`volumes` key.
-
-Example:
-
-    version: 2
-    services:
-      web:
-        build: .
-        ports:
-         - "5000:5000"
-        volumes:
-         - .:/code
-         - logvolume01:/var/log
-        links:
-         - redis
-      redis:
-        image: redis
-    volumes:
-      logvolume01:
-        driver: default
+You can use environment variables in configuration values with a Bash-like
+`${VARIABLE}` syntax - see [variable substitution](#variable-substitution) for
+full details.
 
 
 ## Service configuration reference
 
+> **Note:** There are two versions of the Compose file format – version 1 (the
+> legacy format, which does not support volumes or networks) and version 2 (the
+> most up-to-date). For more information, see the [Versioning](#versioning)
+> section.
+
 This section contains a list of all configuration options supported by a service
 definition.
 
@@ -92,28 +47,30 @@ definition.
 
 Configuration options that are applied at build time.
 
-In version 1 this must be given as a string representing the context.
+`build` can be specified either as a string containing a path to the build
+context, or an object with the path specified under [context](#context) and
+optionally [dockerfile](#dockerfile) and [args](#args).
 
-  build: .
+    build: ./dir
 
-In version 2 this can alternatively be given as an object with extra options.
+    build:
+      context: ./dir
+      dockerfile: Dockerfile-alternate
+      args:
+        buildno: 1
 
-  version: 2
-  services:
-    web:
-      build: .
-
-    version: 2
-    services:
-      web:
-        build:
-          context: .
-          dockerfile: Dockerfile-alternate
-          args:
-            buildno: 1
+> **Note**: In the [version 1 file format](#version-1), `build` is different in
+> two ways:
+>
+> -   Only the string form (`build: .`) is allowed - not the object form.
+> -   Using `build` together with `image` is not allowed. Attempting to do so
+>     results in an error.
 
 #### context
 
+> [Version 2 file format](#version-2) only. In version 1, just use
+> [build](#build).
+
 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
@@ -122,29 +79,34 @@ 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
-
     build:
-      context: /path/to/build/dir
-
-Using `context` together with `image` is not allowed. Attempting to do so results in
-an error.
+      context: ./dir
 
 #### dockerfile
 
 Alternate Dockerfile.
 
 Compose will use an alternate file to build with. A build path must also be
-specified using the `build` key.
+specified.
 
     build:
-      context: /path/to/build/dir
+      context: .
       dockerfile: Dockerfile-alternate
 
-Using `dockerfile` together with `image` is not allowed. Attempting to do so results in an error.
+> **Note**: In the [version 1 file format](#version-1), `dockerfile` is
+> different in two ways:
+>
+> -   It appears alongside `build`, not as a sub-option:
+>
+>         build: .
+>         dockerfile: Dockerfile-alternate
+> -   Using `dockerfile` together with `image` is not allowed. Attempting to do
+>     so results in an error.
 
 #### args
 
+> [Version 2 file format](#version-2) only.
+
 Add build arguments. You can use either an array or a dictionary. Any
 boolean values; true, false, yes, no, need to be enclosed in quotes to ensure
 they are not converted to True or False by the YML parser.
@@ -152,8 +114,6 @@ they are not converted to True or False by the YML parser.
 Build arguments with only a key are resolved to their environment value on the
 machine Compose is running on.
 
-> **Note:** Introduced in version 2 of the compose file format.
-
     build:
       args:
         buildno: 1
@@ -210,6 +170,31 @@ client create option.
     devices:
       - "/dev/ttyUSB0:/dev/ttyUSB0"
 
+### depends_on
+
+Express dependency between services, which has two effects:
+
+- `docker-compose up` will start services in dependency order. In the following
+  example, `db` and `redis` will be started before `web`.
+
+- `docker-compose up SERVICE` will automatically include `SERVICE`'s
+  dependencies. In the following example, `docker-compose up web` will also
+  create and start `db` and `redis`.
+
+Simple example:
+
+    version: '2'
+    services:
+      web:
+        build: .
+        depends_on:
+          - db
+          - redis
+      redis:
+        image: redis
+      db:
+        image: postgres
+
 ### dns
 
 Custom DNS servers. Can be a single value or a list.
@@ -336,6 +321,10 @@ container name and the link alias (`CONTAINER:ALIAS`).
      - project_db_1:mysql
      - project_db_1:postgresql
 
+> **Note:** If you're using the [version 2 file format](#version-2), the
+> externally-created containers must be connected to at least one of the same
+> networks as the service which is linking to them.
+
 ### extra_hosts
 
 Add hostname mappings. Use the same values as the docker client `--add-host` parameter.
@@ -377,33 +366,35 @@ It's recommended that you use reverse-DNS notation to prevent your labels from c
 ### links
 
 Link to containers in another service. Either specify both the service name and
-the link alias (`SERVICE:ALIAS`), or just the service name (which will also be
-used for the alias).
+a link alias (`SERVICE:ALIAS`), or just the service name.
 
-    links:
-     - db
-     - db:database
-     - redis
+    web:
+      links:
+       - db
+       - db:database
+       - redis
 
-An entry with the alias' name will be created in `/etc/hosts` inside containers
-for this service, e.g:
+Containers for the linked service will be reachable at a hostname identical to
+the alias, or the service name if no alias was specified.
 
-    172.17.2.186  db
-    172.17.2.186  database
-    172.17.2.187  redis
+Links also express dependency between services in the same way as
+[depends_on](#depends-on), so they determine the order of service startup.
 
-Environment variables will also be created - see the [environment variable
-reference](env.md) for details.
+> **Note:** If you define both links and [networks](#networks), services with
+> links between them must share at least one network in common in order to
+> communicate.
 
 ### logging
 
-Logging configuration for the service. This configuration replaces the previous
-`log_driver` and `log_opt` keys.
+> [Version 2 file format](#version-2) only. In version 1, use
+> [log_driver](#log_driver) and [log_opt](#log_opt).
+
+Logging configuration for the service.
 
     logging:
-        driver: log_driver
-        options:
-            syslog-address: "tcp://192.168.0.42:123"
+      driver: syslog
+      options:
+        syslog-address: "tcp://192.168.0.42:123"
 
 The `driver`  name specifies a logging driver for the service's
 containers, as with the ``--log-driver`` option for docker run
@@ -421,21 +412,116 @@ The default value is json-file.
 
 Specify logging options for the logging driver with the ``options`` key, as with the ``--log-opt`` option for `docker run`.
 
-
-Logging options are key value pairs. An example of `syslog` options:
+Logging options are key-value pairs. An example of `syslog` options:
 
     driver: "syslog"
     options:
       syslog-address: "tcp://192.168.0.42:123"
 
+### log_driver
+
+> [Version 1 file format](#version-1) only. In version 2, use
+> [logging](#logging).
+
+Specify a log driver. The default is `json-file`.
+
+    log_driver: syslog
+
+### log_opt
+
+> [Version 1 file format](#version-1) only. In version 2, use
+> [logging](#logging).
+
+Specify logging options as key-value pairs. An example of `syslog` options:
+
+    log_opt:
+      syslog-address: "tcp://192.168.0.42:123"
+
 ### net
 
-Networking mode. Use the same values as the docker client `--net` parameter.
+> [Version 1 file format](#version-1) only. In version 2, use
+> [network_mode](#network_mode).
+
+Network mode. Use the same values as the docker client `--net` parameter.
+The `container:...` form can take a service name instead of a container name or
+id.
 
     net: "bridge"
-    net: "none"
-    net: "container:[name or id]"
     net: "host"
+    net: "none"
+    net: "container:[service name or container name/id]"
+
+### network_mode
+
+> [Version 2 file format](#version-2) only. In version 1, use [net](#net).
+
+Network mode. Use the same values as the docker client `--net` parameter, plus
+the special form `service:[service name]`.
+
+    network_mode: "bridge"
+    network_mode: "host"
+    network_mode: "none"
+    network_mode: "service:[service name]"
+    network_mode: "container:[container name/id]"
+
+### networks
+
+> [Version 2 file format](#version-2) only. In version 1, use [net](#net).
+
+Networks to join, referencing entries under the
+[top-level `networks` key](#network-configuration-reference).
+
+    networks:
+      - some-network
+      - other-network
+
+#### aliases
+
+Aliases (alternative hostnames) for this service on the network. Other containers on the same network can use either the service name or this alias to connect to one of the service's containers.
+
+Since `aliases` is network-scoped, the same service can have different aliases on different networks.
+
+> **Note**: A network-wide alias can be shared by multiple containers, and even by multiple services. If it is, then exactly which container the name will resolve to is not guaranteed.
+
+The general format is shown here.
+
+    networks:
+      some-network:
+        aliases:
+          - alias1
+          - alias3
+      other-network:
+        aliases:
+          - alias2
+
+In the example below, three services are provided (`web`, `worker`, and `db`), along with two networks (`new` and `legacy`). The `db` service is reachable at the hostname `db` or `database` on the `new` network, and at `db` or `mysql` on the `legacy` network.
+
+    version: 2
+
+    services:
+      web:
+        build: ./web
+        networks:
+          - new
+
+      worker:
+        build: ./worker
+        networks:
+        - legacy
+
+      db:
+        image: mysql
+        networks:
+          new:
+            aliases:
+              - database
+          legacy:
+            aliases:
+              - mysql
+
+    networks:
+      new:
+      legacy:
 
 ### pid
 
@@ -469,9 +555,17 @@ port (a random host port will be chosen).
 
 Override the default labeling scheme for each container.
 
-      security_opt:
-        - label:user:USER
-        - label:role:ROLE
+    security_opt:
+      - label:user:USER
+      - label:role:ROLE
+
+### stop_signal
+
+Sets an alternative signal to stop the container. By default `stop` uses
+SIGTERM. Setting an alternative signal using `stop_signal` will cause
+`stop` to send that signal instead.
+
+    stop_signal: SIGUSR1
 
 ### ulimits
 
@@ -479,31 +573,50 @@ Override the default ulimits for a container. You can either specify a single
 limit as an integer or soft/hard limits as a mapping.
 
 
-      ulimits:
-        nproc: 65535
-        nofile:
-          soft: 20000
-          hard: 40000
+    ulimits:
+      nproc: 65535
+      nofile:
+        soft: 20000
+        hard: 40000
 
 ### volumes, volume\_driver
 
-Mount paths as volumes, optionally specifying a path on the host machine
+Mount paths or named volumes, optionally specifying a path on the host machine
 (`HOST:CONTAINER`), or an access mode (`HOST:CONTAINER:ro`).
-
-    volumes:
-     - /var/lib/mysql
-     - ./cache:/tmp/cache
-     - ~/configs:/etc/configs/:ro
+For [version 2 files](#version-2), named volumes need to be specified with the
+[top-level `volumes` key](#volume-configuration-reference).
+When using [version 1](#version-1), the Docker Engine will create the named
+volume automatically if it doesn't exist.
 
 You can mount a relative path on the host, which will expand relative to
 the directory of the Compose configuration file being used. Relative paths
 should always begin with `.` or `..`.
 
-If you use a volume name (instead of a volume path), you may also specify
-a `volume_driver`.
+    volumes:
+      # Just specify a path and let the Engine create a volume
+      - /var/lib/mysql
+
+      # Specify an absolute path mapping
+      - /opt/data:/var/lib/mysql
+
+      # Path on the host, relative to the Compose file
+      - ./cache:/tmp/cache
+
+      # User-relative path
+      - ~/configs:/etc/configs/:ro
+
+      # Named volume
+      - datavolume:/var/lib/mysql
+
+If you do not use a host path, you may specify a `volume_driver`.
 
     volume_driver: mydriver
 
+Note that for [version 2 files](#version-2), this driver
+will not apply to named volumes (you should use the `driver` option when
+[declaring the volume](#volume-configuration-reference) instead).
+For [version 1](#version-1), both named volumes and container volumes will
+use the specified driver.
 
 > Note: No path expansion will be done if you have also specified a
 > `volume_driver`.
@@ -519,8 +632,18 @@ specifying read-only access(``ro``) or read-write(``rw``).
 
     volumes_from:
      - service_name
-     - container_name
-     - service_name:rw
+     - service_name:ro
+     - container:container_name
+     - container:container_name:rw
+
+> **Note:** The `container:...` formats are only supported in the
+> [version 2 file format](#version-2). In [version 1](#version-1), you can use
+> container names without marking them as such:
+>
+>     - service_name
+>     - service_name:ro
+>     - container_name
+>     - container_name:rw
 
 ### cpu\_shares, cpu\_quota, cpuset, domainname, hostname, ipc, mac\_address, mem\_limit, memswap\_limit, privileged, read\_only, restart, stdin\_open, tty, user, working\_dir
 
@@ -556,26 +679,347 @@ While it is possible to declare volumes on the fly as part of the service
 declaration, this section allows you to create named volumes that can be
 reused across multiple services (without relying on `volumes_from`), and are
 easily retrieved and inspected using the docker command line or API.
-See the [docker volume](http://docs.docker.com/reference/commandline/volume/)
+See the [docker volume](/engine/reference/commandline/volume_create.md)
 subcommand documentation for more information.
 
 ### driver
 
 Specify which volume driver should be used for this volume. Defaults to
-`local`. An exception will be raised if the driver is not available.
+`local`. The Docker Engine will return an error if the driver is not available.
 
-      driver: foobar
+     driver: foobar
 
 ### driver_opts
 
 Specify a list of options as key-value pairs to pass to the driver for this
-volume. Those options are driver dependent - consult the driver's
+volume. Those options are driver-dependent - consult the driver's
+documentation for more information. Optional.
+
+     driver_opts:
+       foo: "bar"
+       baz: 1
+
+## external
+
+If set to `true`, specifies that this volume has been created outside of
+Compose. `docker-compose up` will not attempt to create it, and will raise
+an error if it doesn't exist.
+
+`external` cannot be used in conjunction with other volume configuration keys
+(`driver`, `driver_opts`).
+
+In the example below, instead of attemping to create a volume called
+`[projectname]_data`, Compose will look for an existing volume simply
+called `data` and mount it into the `db` service's containers.
+
+    version: '2'
+
+    services:
+      db:
+        image: postgres
+        volumes:
+          - data:/var/lib/postgres/data
+
+    volumes:
+      data:
+        external: true
+
+You can also specify the name of the volume separately from the name used to
+refer to it within the Compose file:
+
+    volumes
+      data:
+        external:
+          name: actual-name-of-volume
+
+
+## Network configuration reference
+
+The top-level `networks` key lets you specify networks to be created. For a full
+explanation of Compose's use of Docker networking features, see the
+[Networking guide](networking.md).
+
+### driver
+
+Specify which driver should be used for this network.
+
+The default driver depends on how the Docker Engine you're using is configured,
+but in most instances it will be `bridge` on a single host and `overlay` on a
+Swarm.
+
+The Docker Engine will return an error if the driver is not available.
+
+    driver: overlay
+
+### driver_opts
+
+Specify a list of options as key-value pairs to pass to the driver for this
+network. Those options are driver-dependent - consult the driver's
 documentation for more information. Optional.
 
       driver_opts:
         foo: "bar"
         baz: 1
 
+### ipam
+
+Specify custom IPAM config. This is an object with several properties, each of
+which is optional:
+
+-   `driver`: Custom IPAM driver, instead of the default.
+-   `config`: A list with zero or more config blocks, each containing any of
+    the following keys:
+    - `subnet`: Subnet in CIDR format that represents a network segment
+    - `ip_range`: Range of IPs from which to allocate container IPs
+    - `gateway`: IPv4 or IPv6 gateway for the master subnet
+    - `aux_addresses`: Auxiliary IPv4 or IPv6 addresses used by Network driver,
+      as a mapping from hostname to IP
+
+A full example:
+
+    ipam:
+      driver: default
+      config:
+        - subnet: 172.28.0.0/16
+          ip_range: 172.28.5.0/24
+          gateway: 172.28.5.254
+          aux_addresses:
+            host1: 172.28.1.5
+            host2: 172.28.1.6
+            host3: 172.28.1.7
+
+### external
+
+If set to `true`, specifies that this network has been created outside of
+Compose. `docker-compose up` will not attempt to create it, and will raise
+an error if it doesn't exist.
+
+`external` cannot be used in conjunction with other network configuration keys
+(`driver`, `driver_opts`, `ipam`).
+
+In the example below, `proxy` is the gateway to the outside world. Instead of
+attemping to create a network called `[projectname]_outside`, Compose will
+look for an existing network simply called `outside` and connect the `proxy`
+service's containers to it.
+
+    version: '2'
+
+    services:
+      proxy:
+        build: ./proxy
+        networks:
+          - outside
+          - default
+      app:
+        build: ./app
+        networks:
+          - default
+
+    networks:
+      outside:
+        external: true
+
+You can also specify the name of the network separately from the name used to
+refer to it within the Compose file:
+
+    networks:
+      outside:
+        external:
+          name: actual-name-of-network
+
+
+## Versioning
+
+There are two versions of the Compose file format:
+
+- Version 1, the legacy format. This is specified by omitting a `version` key at
+  the root of the YAML.
+- Version 2, the recommended format. This is specified with a `version: '2'` entry
+  at the root of the YAML.
+
+To move your project from version 1 to 2, see the [Upgrading](#upgrading)
+section.
+
+> **Note:** If you're using
+> [multiple Compose files](extends.md#different-environments) or
+> [extending services](extends.md#extending-services), each file must be of the
+> same version - you cannot mix version 1 and 2 in a single project.
+
+Several things differ depending on which version you use:
+
+- The structure and permitted configuration keys
+- The minimum Docker Engine version you must be running
+- Compose's behaviour with regards to networking
+
+These differences are explained below.
+
+
+### Version 1
+
+Compose files that do not declare a version are considered "version 1". In
+those files, all the [services](#service-configuration-reference) are declared
+at the root of the document.
+
+Version 1 is supported by **Compose up to 1.6.x**. It will be deprecated in a
+future Compose release.
+
+Version 1 files cannot declare named
+[volumes](#volume-configuration-reference), [networks](networking.md) or
+[build arguments](#args).
+
+Example:
+
+    web:
+      build: .
+      ports:
+       - "5000:5000"
+      volumes:
+       - .:/code
+      links:
+       - redis
+    redis:
+      image: redis
+
+
+### Version 2
+
+Compose files using the version 2 syntax must indicate the version number at
+the root of the document. All [services](#service-configuration-reference)
+must be declared under the `services` key.
+
+Version 2 files are supported by **Compose 1.6.0+** and require a Docker Engine
+of version **1.10.0+**.
+
+Named [volumes](#volume-configuration-reference) can be declared under the
+`volumes` key, and [networks](#network-configuration-reference) can be declared
+under the `networks` key.
+
+Simple example:
+
+    version: '2'
+    services:
+      web:
+        build: .
+        ports:
+         - "5000:5000"
+        volumes:
+         - .:/code
+      redis:
+        image: redis
+
+A more extended example, defining volumes and networks:
+
+    version: '2'
+    services:
+      web:
+        build: .
+        ports:
+         - "5000:5000"
+        volumes:
+         - .:/code
+        networks:
+          - front-tier
+          - back-tier
+      redis:
+        image: redis
+        volumes:
+          - redis-data:/var/lib/redis
+        networks:
+          - back-tier
+    volumes:
+      redis-data:
+        driver: local
+    networks:
+      front-tier:
+        driver: bridge
+      back-tier:
+        driver: bridge
+
+
+### Upgrading
+
+In the majority of cases, moving from version 1 to 2 is a very simple process:
+
+1. Indent the whole file by one level and put a `services:` key at the top.
+2. Add a `version: '2'` line at the top of the file.
+
+It's more complicated if you're using particular configuration features:
+
+-   `dockerfile`: This now lives under the `build` key:
+
+        build:
+          context: .
+          dockerfile: Dockerfile-alternate
+
+-   `log_driver`, `log_opt`: These now live under the `logging` key:
+
+        logging:
+          driver: syslog
+          options:
+            syslog-address: "tcp://192.168.0.42:123"
+
+-   `links` with environment variables: As documented in the
+    [environment variables reference](link-env-deprecated.md), environment variables
+    created by
+    links have been deprecated for some time. In the new Docker network system,
+    they have been removed. You should either connect directly to the
+    appropriate hostname or set the relevant environment variable yourself,
+    using the link hostname:
+
+        web:
+          links:
+            - db
+          environment:
+            - DB_PORT=tcp://db:5432
+
+-   `external_links`: Compose uses Docker networks when running version 2
+    projects, so links behave slightly differently. In particular, two
+    containers must be connected to at least one network in common in order to
+    communicate, even if explicitly linked together.
+
+    Either connect the external container to your app's
+    [default network](networking.md), or connect both the external container and
+    your service's containers to an
+    [external network](networking.md#using-a-pre-existing-network).
+
+-   `net`: This is now replaced by [network_mode](#network_mode):
+
+        net: host    ->  network_mode: host
+        net: bridge  ->  network_mode: bridge
+        net: none    ->  network_mode: none
+
+    If you're using `net: "container:[service name]"`, you must now use
+    `network_mode: "service:[service name]"` instead.
+
+        net: "container:web"  ->  network_mode: "service:web"
+
+    If you're using `net: "container:[container name/id]"`, the value does not
+    need to change.
+
+        net: "container:cont-name"  ->  network_mode: "container:cont-name"
+        net: "container:abc12345"   ->  network_mode: "container:abc12345"
+
+-   `volumes` with named volumes: these must now be explicitly declared in a
+    top-level `volumes` section of your Compose file. If a service mounts a
+    named volume called `data`, you must declare a `data` volume in your
+    top-level `volumes` section. The whole file might look like this:
+
+        version: '2'
+        services:
+          db:
+            image: postgres
+            volumes:
+              - data:/var/lib/postgresql/data
+        volumes:
+          data: {}
+
+    By default, Compose creates a volume whose name is prefixed with your
+    project name. If you want it to just be called `data`, declared it as
+    external:
+
+        volumes:
+          data:
+            external: true
 
 ## Variable substitution
 
diff --git a/docs/django.md b/docs/django.md
index 2d4fdaf9..e616d0e1 100644
--- a/docs/django.md
+++ b/docs/django.md
@@ -1,16 +1,16 @@
 <!--[metadata]>
 +++
-title = "Quickstart Guide: Compose and Django"
+title = "Quickstart: Compose and Django"
 description = "Getting started with Docker Compose and Django"
 keywords = ["documentation, docs,  docker, compose, orchestration, containers"]
 [menu.main]
-parent="smn_workw_compose"
+parent="workw_compose"
 weight=4
 +++
 <![end-metadata]-->
 
 
-# Quickstart Guide: Compose and Django
+# Quickstart: Compose and Django
 
 This quick-start guide demonstrates how to use Compose to set up and run a
 simple Django/PostgreSQL app. Before starting, you'll need to have
@@ -72,17 +72,19 @@ and a `docker-compose.yml` file.
 
 9. Add the following configuration to the file.
 
-        db:
-          image: postgres
-        web:
-          build: .
-          command: python manage.py runserver 0.0.0.0:8000
-          volumes:
-            - .:/code
-          ports:
-            - "8000:8000"
-          links:
-            - db
+        version: '2'
+        services:
+          db:
+            image: postgres
+          web:
+            build: .
+            command: python manage.py runserver 0.0.0.0:8000
+            volumes:
+              - .:/code
+            ports:
+              - "8000:8000"
+            depends_on:
+              - db
 
     This file defines two services: The `db` service and the `web` service.
 
@@ -129,7 +131,7 @@ In this step, you create a Django started project by building the image from the
 
 In this section, you set up the database connection for Django.
 
-1. In your project dirctory, edit the `composeexample/settings.py` file.
+1. In your project directory, edit the `composeexample/settings.py` file.
 
 2. Replace the `DATABASES = ...` with the following:
 
diff --git a/docs/extends.md b/docs/extends.md
index 011a7350..bceb0257 100644
--- a/docs/extends.md
+++ b/docs/extends.md
@@ -1,11 +1,11 @@
 <!--[metadata]>
 +++
-title = "Extending services in Compose"
+title = "Extending Services in Compose"
 description = "How to use Docker Compose's extends keyword to share configuration between files and projects"
 keywords = ["fig, composition, compose, docker, orchestration, documentation, docs"]
 [menu.main]
-parent="smn_workw_compose"
-weight=2
+parent="workw_compose"
+weight=20
 +++
 <![end-metadata]-->
 
@@ -32,17 +32,14 @@ contains your base configuration. The override file, as its name implies, can
 contain configuration overrides for existing services or entirely new
 services.
 
-If a service is defined in both files, Compose merges the configurations using
-the same rules as the `extends` field (see [Adding and overriding
-configuration](#adding-and-overriding-configuration)), with one exception.  If a
-service contains `links` or `volumes_from` those fields are copied over and
-replace any values in the original service, in the same way single-valued fields
-are copied.
+If a service is defined in both files Compose merges the configurations using
+the rules described in [Adding and overriding
+configuration](#adding-and-overriding-configuration).
 
 To use multiple override files, or an override file with a different name, you
 can use the `-f` option to specify the list of files. Compose merges files in
 the order they're specified on the command line. See the [`docker-compose`
-command reference](./reference/docker-compose.md) for more information about
+command reference](./reference/overview.md) for more information about
 using `-f`.
 
 When you use multiple configuration files, you must make sure all paths in the
@@ -176,10 +173,12 @@ is useful if you have several services that reuse a common set of configuration
 options. Using `extends` you can define a common set of service options in one
 place and refer to it from anywhere.
 
-> **Note:** `links` and `volumes_from` are never shared between services using
-> `extends`. See
-> [Adding and overriding configuration](#adding-and-overriding-configuration)
- > for more information.
+> **Note:** `links`, `volumes_from`, and `depends_on` are never shared between
+> services using >`extends`. These exceptions exist to avoid
+> implicit dependencies&mdash;you always define `links` and `volumes_from`
+> locally. This ensures dependencies between services are clearly visible when
+> reading the current file. Defining these locally also ensures changes to the
+> referenced file don't result in breakage.
 
 ### Understand the extends configuration
 
@@ -275,13 +274,7 @@ common configuration:
 
 ## Adding and overriding configuration
 
-Compose copies configurations from the original service over to the local one,
-**except** for `links` and `volumes_from`. These exceptions exist to avoid
-implicit dependencies&mdash;you always define `links` and `volumes_from`
-locally. This ensures dependencies between services are clearly visible when
-reading the current file. Defining these locally also ensures changes to the
-referenced file don't result in breakage.
-
+Compose copies configurations from the original service over to the local one.
 If a configuration option is defined in both the original service the local
 service, the local value *replaces* or *extends* the original value.
 
diff --git a/docs/faq.md b/docs/faq.md
index b36eb5ac..73596c18 100644
--- a/docs/faq.md
+++ b/docs/faq.md
@@ -4,8 +4,9 @@ title = "Frequently Asked Questions"
 description = "Docker Compose FAQ"
 keywords = "documentation, docs,  docker, compose, faq"
 [menu.main]
-parent="smn_workw_compose"
-weight=9
+identifier="faq.compose"
+parent="workw_compose"
+weight=90
 +++
 <![end-metadata]-->
 
@@ -50,8 +51,8 @@ handling `SIGTERM` properly.
 Compose uses the project name to create unique identifiers for all of a
 project's  containers and other resources. To run multiple copies of a project,
 set a custom project name using the [`-p` command line
-option](./reference/docker-compose.md) or the [`COMPOSE_PROJECT_NAME`
-environment variable](./reference/overview.md#compose-project-name).
+option](./reference/overview.md) or the [`COMPOSE_PROJECT_NAME`
+environment variable](./reference/envvars.md#compose-project-name).
 
 ## What's the difference between `up`, `run`, and `start`?
 
diff --git a/docs/gettingstarted.md b/docs/gettingstarted.md
index bb3d51e9..36577f07 100644
--- a/docs/gettingstarted.md
+++ b/docs/gettingstarted.md
@@ -4,8 +4,8 @@ title = "Getting Started"
 description = "Getting started with Docker Compose"
 keywords = ["documentation, docs,  docker, compose, orchestration, containers"]
 [menu.main]
-parent="smn_workw_compose"
-weight=3
+parent="workw_compose"
+weight=-85
 +++
 <![end-metadata]-->
 
@@ -95,16 +95,19 @@ Define a set of services using `docker-compose.yml`:
 1. Create a file called docker-compose.yml in your project directory and add
    the following:
 
-        web:
-          build: .
-          ports:
-           - "5000:5000"
-          volumes:
-           - .:/code
-          links:
-           - redis
-        redis:
-          image: redis
+
+        version: '2'
+        services:
+          web:
+            build: .
+            ports:
+             - "5000:5000"
+            volumes:
+             - .:/code
+            depends_on:
+             - redis
+          redis:
+            image: redis
 
 This Compose file defines two services, `web` and `redis`. The web service:
 
diff --git a/docs/index.md b/docs/index.md
index 887df99d..f5d84218 100644
--- a/docs/index.md
+++ b/docs/index.md
@@ -1,66 +1,21 @@
 <!--[metadata]>
 +++
-title = "Overview of Docker Compose"
+title = "Docker Compose"
 description = "Introduction and Overview of Compose"
 keywords = ["documentation, docs,  docker, compose, orchestration,  containers"]
 [menu.main]
-parent="smn_workw_compose"
+identifier="workw_compose"
+weight=-70
 +++
 <![end-metadata]-->
 
 
-# Overview of Docker Compose
+# Docker Compose
 
-Compose is a tool for defining and running multi-container Docker applications.
-With Compose, you use a Compose file to configure your application's services.
-Then, using a single command, you create and start all the services
-from your configuration. To learn more about all the features of Compose
-see [the list of features](#features).
+Compose is a tool for defining and running multi-container Docker applications. To learn more about Compose refer to the following documentation:
 
-Compose is great for development, testing, and staging environments, as well as
-CI workflows. You can learn more about each case in
-[Common Use Cases](#common-use-cases).
-
-Using Compose is basically a three-step process.
-
-1. Define your app's environment with a `Dockerfile` so it can be
-reproduced anywhere.
-2. Define the services that make up your app in `docker-compose.yml` so
-they can be run together in an isolated environment.
-3. Lastly, run `docker-compose up` and Compose will start and run your entire app.
-
-A `docker-compose.yml` looks like this:
-
-    version: 2
-    services:
-      web:
-        build: .
-        ports:
-         - "5000:5000"
-        volumes:
-         - .:/code
-         - logvolume01:/var/log
-        links:
-         - redis
-      redis:
-        image: redis
-    volumes:
-      logvolume01:
-        driver: default
-
-For more information about the Compose file, see the
-[Compose file reference](compose-file.md)
-
-Compose has commands for managing the whole lifecycle of your application:
-
- * Start, stop and rebuild services
- * View the status of running services
- * Stream the log output of running services
- * Run a one-off command on a service
-
-## Compose documentation
-
-- [Installing Compose](install.md)
+- [Compose Overview](overview.md)
+- [Install Compose](install.md)
 - [Getting Started](gettingstarted.md)
 - [Get started with Django](django.md)
 - [Get started with Rails](rails.md)
@@ -69,123 +24,6 @@ Compose has commands for managing the whole lifecycle of your application:
 - [Command line reference](./reference/index.md)
 - [Compose file reference](compose-file.md)
 
-## Features
-
-The features of Compose that make it effective are:
-
-* [Multiple isolated environments on a single host](#Multiple-isolated-environments-on-a-single-host)
-* [Preserve volume data when containers are created](#preserve-volume-data-when-containers-are-created)
-* [Only recreate containers that have changed](#only-recreate-containers-that-have-changed)
-* [Variables and moving a composition between environments](#variables-and-moving-a-composition-between-environments)
-
-#### Multiple isolated environments on a single host
-
-Compose uses a project name to isolate environments from each other. You can use
-this project name to:
-
-* on a dev host, to create multiple copies of a single environment (ex: you want
-  to run a stable copy for each feature branch of a project)
-* on a CI server, to keep builds from interfering with each other, you can set
-  the project name to a unique build number
-* on a shared host or dev host, to prevent different projects which may use the
-  same service names, from interfering with each other
-
-The default project name is the basename of the project directory. You can set
-a custom project name by using the
-[`-p` command line option](./reference/docker-compose.md) or the
-[`COMPOSE_PROJECT_NAME` environment variable](./reference/overview.md#compose-project-name).
-
-#### Preserve volume data when containers are created
-
-Compose preserves all volumes used by your services. When `docker-compose up`
-runs, if it finds any containers from previous runs, it copies the volumes from
-the old container to the new container. This process ensures that any data
-you've created in volumes isn't lost.
-
-
-#### Only recreate containers that have changed
-
-Compose caches the configuration used to create a container. When you
-restart a service that has not changed, Compose re-uses the existing
-containers. Re-using containers means that you can make changes to your
-environment very quickly.
-
-
-#### Variables and moving a composition between environments
-
-Compose supports variables in the Compose file. You can use these variables
-to customize your composition for different environments, or different users.
-See [Variable substitution](compose-file.md#variable-substitution) for more
-details.
-
-You can extend a Compose file using the `extends` field or by creating multiple
-Compose files. See [extends](extends.md) for more details.
-
-
-## Common Use Cases
-
-Compose can be used in many different ways. Some common use cases are outlined
-below.
-
-### Development environments
-
-When you're developing software, the ability to run an application in an
-isolated environment and interact with it is crucial.  The Compose command
-line tool can be used to create the environment and interact with it.
-
-The [Compose file](compose-file.md) provides a way to document and configure
-all of the application's service dependencies (databases, queues, caches,
-web service APIs, etc). Using the Compose command line tool you can create
-and start one or more containers for each dependency with a single command
-(`docker-compose up`).
-
-Together, these features provide a convenient way for developers to get
-started on a project.  Compose can reduce a multi-page "developer getting
-started guide" to a single machine readable Compose file and a few commands.
-
-### Automated testing environments
-
-An important part of any Continuous Deployment or Continuous Integration process
-is the automated test suite. Automated end-to-end testing requires an
-environment in which to run tests. Compose provides a convenient way to create
-and destroy isolated testing environments for your test suite. By defining the full
-environment in a [Compose file](compose-file.md) you can create and destroy these
-environments in just a few commands:
-
-    $ docker-compose up -d
-    $ ./run_tests
-    $ docker-compose down
-
-### Single host deployments
-
-Compose has traditionally been focused on development and testing workflows,
-but with each release we're making progress on more production-oriented features.
-You can use Compose to deploy to a remote Docker Engine. The Docker Engine may
-be a single instance provisioned with
-[Docker Machine](https://docs.docker.com/machine/) or an entire
-[Docker Swarm](https://docs.docker.com/swarm/) cluster.
-
-For details on using production-oriented features, see
-[compose in production](production.md) in this documentation.
-
-
-## Release Notes
-
 To see a detailed list of changes for past and current releases of Docker
 Compose, please refer to the
 [CHANGELOG](https://github.com/docker/compose/blob/master/CHANGELOG.md).
-
-## Getting help
-
-Docker Compose is under active development. If you need help, would like to
-contribute, or simply want to talk about the project with like-minded
-individuals, we have a number of open channels for communication.
-
-* To report bugs or file feature requests: please use the [issue tracker on Github](https://github.com/docker/compose/issues).
-
-* To talk about the project with people in real time: please join the
-  `#docker-compose` channel on freenode IRC.
-
-* To contribute code or documentation changes: please submit a [pull request on Github](https://github.com/docker/compose/pulls).
-
-For more information and resources, please visit the [Getting Help project page](https://docs.docker.com/opensource/get-help/).
diff --git a/docs/install.md b/docs/install.md
index 417a48c1..a51befca 100644
--- a/docs/install.md
+++ b/docs/install.md
@@ -1,11 +1,11 @@
 <!--[metadata]>
 +++
-title = "Docker Compose"
+title = "Install Compose"
 description = "How to install Docker Compose"
 keywords = ["compose, orchestration, install, installation, docker, documentation"]
 [menu.main]
-parent="mn_install"
-weight=4
+parent="workw_compose"
+weight=-90
 +++
 <![end-metadata]-->
 
@@ -39,7 +39,7 @@ which the release page specifies, in your terminal.
 
      The following is an example command illustrating the format:
 
-        curl -L https://github.com/docker/compose/releases/download/1.5.2/docker-compose-`uname -s`-`uname -m` > /usr/local/bin/docker-compose
+        curl -L https://github.com/docker/compose/releases/download/1.6.1/docker-compose-`uname -s`-`uname -m` > /usr/local/bin/docker-compose
 
      If you have problems installing with `curl`, see
      [Alternative Install Options](#alternative-install-options).
@@ -54,7 +54,7 @@ which the release page specifies, in your terminal.
 7. Test the installation.
 
         $ docker-compose --version
-        docker-compose version: 1.5.2
+        docker-compose version: 1.6.1
 
 
 ## Alternative install options
@@ -77,7 +77,7 @@ to get started.
 Compose can also be run inside a container, from a small bash script wrapper.
 To install compose as a container run:
 
-    $ curl -L https://github.com/docker/compose/releases/download/1.5.2/run.sh > /usr/local/bin/docker-compose
+    $ curl -L https://github.com/docker/compose/releases/download/1.6.1/run.sh > /usr/local/bin/docker-compose
     $ chmod +x /usr/local/bin/docker-compose
 
 ## Master builds
diff --git a/docs/env.md b/docs/link-env-deprecated.md
similarity index 71%
rename from docs/env.md
rename to docs/link-env-deprecated.md
index c0e03a4e..55ba5f2d 100644
--- a/docs/env.md
+++ b/docs/link-env-deprecated.md
@@ -1,17 +1,20 @@
 <!--[metadata]>
 +++
-title = "Compose environment variables reference"
+title = "Link Environment Variables"
 description = "Compose CLI reference"
 keywords = ["fig, composition, compose, docker, orchestration, cli,  reference"]
+aliases = ["/compose/env"]
 [menu.main]
-parent="smn_compose_ref"
-weight=3
+parent="workw_compose"
+weight=89
 +++
 <![end-metadata]-->
 
-# Compose environment variables reference
+# Link environment variables reference
 
-**Note:** Environment variables are no longer the recommended method for connecting to linked services. Instead, you should use the link name (by default, the name of the linked service) as the hostname to connect to. See the [docker-compose.yml documentation](compose-file.md#links) for details.
+> **Note:** Environment variables are no longer the recommended method for connecting to linked services. Instead, you should use the link name (by default, the name of the linked service) as the hostname to connect to. See the [docker-compose.yml documentation](compose-file.md#links) for details.
+>
+> Environment variables will only be populated if you're using the [legacy version 1 Compose file format](compose-file.md#versioning).
 
 Compose uses [Docker links] to expose services' containers to one another. Each linked container injects a set of environment variables, each of which begins with the uppercase name of the container.
 
diff --git a/docs/networking.md b/docs/networking.md
index 91ac0b73..1fd6c116 100644
--- a/docs/networking.md
+++ b/docs/networking.md
@@ -4,91 +4,149 @@ title = "Networking in Compose"
 description = "How Compose sets up networking between containers"
 keywords = ["documentation, docs,  docker, compose, orchestration, containers, networking"]
 [menu.main]
-parent="smn_workw_compose"
-weight=6
+parent="workw_compose"
+weight=21
 +++
 <![end-metadata]-->
 
 
 # Networking in Compose
 
-> **Note:** Compose's networking support is experimental, and must be explicitly enabled with the `docker-compose --x-networking` flag.
+> **Note:** This document only applies if you're using [version 2 of the Compose file format](compose-file.md#versioning). Networking features are not supported for version 1 (legacy) Compose files.
 
-Compose sets up a single default
+By default Compose sets up a single
 [network](/engine/reference/commandline/network_create.md) for your app. Each
 container for a service joins the default network and is both *reachable* by
 other containers on that network, and *discoverable* by them at a hostname
 identical to the container name.
 
-> **Note:** Your app's network is given the same name as the "project name", which is based on the name of the directory it lives in. See the [Command line overview](reference/docker-compose.md) for how to override it.
+> **Note:** Your app's network is given a name based on the "project name",
+> which is based on the name of the directory it lives in. You can override the
+> project name with either the [`--project-name`
+> flag](reference/overview.md) or the [`COMPOSE_PROJECT_NAME` environment
+> variable](reference/envvars.md#compose-project-name).
 
 For example, suppose your app is in a directory called `myapp`, and your `docker-compose.yml` looks like this:
 
-    web:
-      build: .
-      ports:
-        - "8000:8000"
-    db:
-      image: postgres
+    version: '2'
 
-When you run `docker-compose --x-networking up`, the following happens:
+    services:
+      web:
+        build: .
+        ports:
+          - "8000:8000"
+      db:
+        image: postgres
 
-1. A network called `myapp` is created.
-2. A container is created using `web`'s configuration. It joins the network
-`myapp` under the name `myapp_web_1`.
-3. A container is created using `db`'s configuration. It joins the network
-`myapp` under the name `myapp_db_1`.
+When you run `docker-compose up`, the following happens:
 
-Each container can now look up the hostname `myapp_web_1` or `myapp_db_1` and
+1.  A network called `myapp_default` is created.
+2.  A container is created using `web`'s configuration. It joins the network
+    `myapp_default` under the name `web`.
+3.  A container is created using `db`'s configuration. It joins the network
+    `myapp_default` under the name `db`.
+
+Each container can now look up the hostname `web` or `db` and
 get back the appropriate container's IP address. For example, `web`'s
-application code could connect to the URL `postgres://myapp_db_1:5432` and start
+application code could connect to the URL `postgres://db:5432` and start
 using the Postgres database.
 
 Because `web` explicitly maps a port, it's also accessible from the outside world via port 8000 on your Docker host's network interface.
 
-> **Note:** in the next release there will be additional aliases for the
-> container, including a short name without the project name and container
-> index. The full container name will remain as one of the alias for backwards
-> compatibility.
-
 ## Updating containers
 
 If you make a configuration change to a service and run `docker-compose up` to update it, the old container will be removed and the new one will join the network under a different IP address but the same name. Running containers will be able to look up that name and connect to the new address, but the old address will stop working.
 
 If any containers have connections open to the old container, they will be closed. It is a container's responsibility to detect this condition, look up the name again and reconnect.
 
-## Configure how services are published
-
-By default, containers for each service are published on the network with the
-container name. If you want to change the name, or stop containers from being
-discoverable at all, you can use the `container_name` option:
-
-    web:
-      build: .
-      container_name: "my-web-application"
-
 ## Links
 
-Docker links are a one-way, single-host communication system. They should now be considered deprecated, and you should update your app to use networking instead. In the majority of cases, this will simply involve removing the `links` sections from your `docker-compose.yml`.
+Links allow you to define extra aliases by which a service is reachable from another service. They are not required to enable services to communicate - by default, any service can reach any other service at that service's name. In the following example, `db` is reachable from `web` at the hostnames `db` and `database`:
 
-## Specifying the network driver
+    version: '2'
+    services:
+      web:
+        build: .
+        links:
+          - "db:database"
+      db:
+        image: postgres
 
-By default, Compose uses the `bridge` driver when creating the app’s network. The Docker Engine provides one other driver out-of-the-box: `overlay`, which implements secure communication between containers on different hosts (see the next section for how to set up and use the `overlay` driver). Docker also allows you to install [custom network drivers](/engine/extend/plugins_network.md).
+See the [links reference](compose-file.md#links) for more information.
 
-You can specify which one to use with the `--x-network-driver` flag:
-
-    $ docker-compose --x-networking --x-network-driver=overlay up
-
-<!--[metadata]>
 ## Multi-host networking
 
-(TODO: talk about Swarm and the overlay driver)
-<![end-metadata]-->
+When [deploying a Compose application to a Swarm cluster](swarm.md), you can make use of the built-in `overlay` driver to enable multi-host communication between containers with no changes to your Compose file or application code.
 
-## Custom container network modes
+Consult the [Getting started with multi-host networking](/engine/userguide/networking/get-started-overlay.md) to see how to set up a Swarm cluster. The cluster will use the `overlay` driver by default, but you can specify it explicitly if you prefer - see below for how to do this.
 
-Compose allows you to specify a custom network mode for a service with the `net` option - for example, `net: "host"` specifies that its containers should use the same network namespace as the Docker host, and `net: "none"` specifies that they should have no networking capabilities.
+## Specifying custom networks
 
-If a service specifies the `net` option, its containers will *not* join the app’s network and will not be able to communicate with other services in the app.
+Instead of just using the default app network, you can specify your own networks with the top-level `networks` key. This lets you create more complex topologies and specify [custom network drivers](/engine/extend/plugins_network.md) and options. You can also use it to connect services to externally-created networks which aren't managed by Compose.
 
-If *all* services in an app specify the `net` option, a network will not be created at all.
+Each service can specify what networks to connect to with the *service-level* `networks` key, which is a list of names referencing entries under the *top-level* `networks` key.
+
+Here's an example Compose file defining two custom networks. The `proxy` service is isolated from the `db` service, because they do not share a network in common - only `app` can talk to both.
+
+    version: '2'
+
+    services:
+      proxy:
+        build: ./proxy
+        networks:
+          - front
+      app:
+        build: ./app
+        networks:
+          - front
+          - back
+      db:
+        image: postgres
+        networks:
+          - back
+
+    networks:
+      front:
+        # Use a custom driver
+        driver: custom-driver-1
+      back:
+        # Use a custom driver which takes special options
+        driver: custom-driver-2
+        driver_opts:
+          foo: "1"
+          bar: "2"
+
+For full details of the network configuration options available, see the following references:
+
+- [Top-level `networks` key](compose-file.md#network-configuration-reference)
+- [Service-level `networks` key](compose-file.md#networks)
+
+## Configuring the default network
+
+Instead of (or as well as) specifying your own networks, you can also change the settings of the app-wide default network by defining an entry under `networks` named `default`:
+
+    version: '2'
+
+    services:
+      web:
+        build: .
+        ports:
+          - "8000:8000"
+      db:
+        image: postgres
+
+    networks:
+      default:
+        # Use a custom driver
+        driver: custom-driver-1
+
+## Using a pre-existing network
+
+If you want your containers to join a pre-existing network, use the [`external` option](compose-file.md#network-configuration-reference):
+
+    networks:
+      default:
+        external:
+          name: my-pre-existing-network
+
+Instead of attemping to create a network called `[projectname]_default`, Compose will look for a network called `my-pre-existing-network` and connect your app's containers to it.
diff --git a/docs/overview.md b/docs/overview.md
new file mode 100644
index 00000000..bb3c5d71
--- /dev/null
+++ b/docs/overview.md
@@ -0,0 +1,191 @@
+<!--[metadata]>
++++
+title = "Overview of Docker Compose"
+description = "Introduction and Overview of Compose"
+keywords = ["documentation, docs,  docker, compose, orchestration,  containers"]
+[menu.main]
+parent="workw_compose"
+weight=-99
++++
+<![end-metadata]-->
+
+
+# Overview of Docker Compose
+
+Compose is a tool for defining and running multi-container Docker applications.
+With Compose, you use a Compose file to configure your application's services.
+Then, using a single command, you create and start all the services
+from your configuration. To learn more about all the features of Compose
+see [the list of features](#features).
+
+Compose is great for development, testing, and staging environments, as well as
+CI workflows. You can learn more about each case in
+[Common Use Cases](#common-use-cases).
+
+Using Compose is basically a three-step process.
+
+1. Define your app's environment with a `Dockerfile` so it can be
+reproduced anywhere.
+2. Define the services that make up your app in `docker-compose.yml` so
+they can be run together in an isolated environment.
+3. Lastly, run `docker-compose up` and Compose will start and run your entire app.
+
+A `docker-compose.yml` looks like this:
+
+    version: '2'
+    services:
+      web:
+        build: .
+        ports:
+         - "5000:5000"
+        volumes:
+         - .:/code
+         - logvolume01:/var/log
+        links:
+         - redis
+      redis:
+        image: redis
+    volumes:
+      logvolume01: {}
+
+For more information about the Compose file, see the
+[Compose file reference](compose-file.md)
+
+Compose has commands for managing the whole lifecycle of your application:
+
+ * Start, stop and rebuild services
+ * View the status of running services
+ * Stream the log output of running services
+ * Run a one-off command on a service
+
+## Compose documentation
+
+- [Installing Compose](install.md)
+- [Getting Started](gettingstarted.md)
+- [Get started with Django](django.md)
+- [Get started with Rails](rails.md)
+- [Get started with WordPress](wordpress.md)
+- [Frequently asked questions](faq.md)
+- [Command line reference](./reference/index.md)
+- [Compose file reference](compose-file.md)
+
+## Features
+
+The features of Compose that make it effective are:
+
+* [Multiple isolated environments on a single host](#Multiple-isolated-environments-on-a-single-host)
+* [Preserve volume data when containers are created](#preserve-volume-data-when-containers-are-created)
+* [Only recreate containers that have changed](#only-recreate-containers-that-have-changed)
+* [Variables and moving a composition between environments](#variables-and-moving-a-composition-between-environments)
+
+### Multiple isolated environments on a single host
+
+Compose uses a project name to isolate environments from each other. You can use
+this project name to:
+
+* on a dev host, to create multiple copies of a single environment (ex: you want
+  to run a stable copy for each feature branch of a project)
+* on a CI server, to keep builds from interfering with each other, you can set
+  the project name to a unique build number
+* on a shared host or dev host, to prevent different projects which may use the
+  same service names, from interfering with each other
+
+The default project name is the basename of the project directory. You can set
+a custom project name by using the
+[`-p` command line option](./reference/overview.md) or the
+[`COMPOSE_PROJECT_NAME` environment variable](./reference/envvars.md#compose-project-name).
+
+### Preserve volume data when containers are created
+
+Compose preserves all volumes used by your services. When `docker-compose up`
+runs, if it finds any containers from previous runs, it copies the volumes from
+the old container to the new container. This process ensures that any data
+you've created in volumes isn't lost.
+
+
+### Only recreate containers that have changed
+
+Compose caches the configuration used to create a container. When you
+restart a service that has not changed, Compose re-uses the existing
+containers. Re-using containers means that you can make changes to your
+environment very quickly.
+
+
+### Variables and moving a composition between environments
+
+Compose supports variables in the Compose file. You can use these variables
+to customize your composition for different environments, or different users.
+See [Variable substitution](compose-file.md#variable-substitution) for more
+details.
+
+You can extend a Compose file using the `extends` field or by creating multiple
+Compose files. See [extends](extends.md) for more details.
+
+
+## Common Use Cases
+
+Compose can be used in many different ways. Some common use cases are outlined
+below.
+
+### Development environments
+
+When you're developing software, the ability to run an application in an
+isolated environment and interact with it is crucial.  The Compose command
+line tool can be used to create the environment and interact with it.
+
+The [Compose file](compose-file.md) provides a way to document and configure
+all of the application's service dependencies (databases, queues, caches,
+web service APIs, etc). Using the Compose command line tool you can create
+and start one or more containers for each dependency with a single command
+(`docker-compose up`).
+
+Together, these features provide a convenient way for developers to get
+started on a project.  Compose can reduce a multi-page "developer getting
+started guide" to a single machine readable Compose file and a few commands.
+
+### Automated testing environments
+
+An important part of any Continuous Deployment or Continuous Integration process
+is the automated test suite. Automated end-to-end testing requires an
+environment in which to run tests. Compose provides a convenient way to create
+and destroy isolated testing environments for your test suite. By defining the full
+environment in a [Compose file](compose-file.md) you can create and destroy these
+environments in just a few commands:
+
+    $ docker-compose up -d
+    $ ./run_tests
+    $ docker-compose down
+
+### Single host deployments
+
+Compose has traditionally been focused on development and testing workflows,
+but with each release we're making progress on more production-oriented features.
+You can use Compose to deploy to a remote Docker Engine. The Docker Engine may
+be a single instance provisioned with
+[Docker Machine](https://docs.docker.com/machine/) or an entire
+[Docker Swarm](https://docs.docker.com/swarm/) cluster.
+
+For details on using production-oriented features, see
+[compose in production](production.md) in this documentation.
+
+
+## Release Notes
+
+To see a detailed list of changes for past and current releases of Docker
+Compose, please refer to the
+[CHANGELOG](https://github.com/docker/compose/blob/master/CHANGELOG.md).
+
+## Getting help
+
+Docker Compose is under active development. If you need help, would like to
+contribute, or simply want to talk about the project with like-minded
+individuals, we have a number of open channels for communication.
+
+* To report bugs or file feature requests: please use the [issue tracker on Github](https://github.com/docker/compose/issues).
+
+* To talk about the project with people in real time: please join the
+  `#docker-compose` channel on freenode IRC.
+
+* To contribute code or documentation changes: please submit a [pull request on Github](https://github.com/docker/compose/pulls).
+
+For more information and resources, please visit the [Getting Help project page](https://docs.docker.com/opensource/get-help/).
diff --git a/docs/production.md b/docs/production.md
index 46e221bb..40ce1e66 100644
--- a/docs/production.md
+++ b/docs/production.md
@@ -1,11 +1,11 @@
 <!--[metadata]>
 +++
-title = "Using Compose in production"
+title = "Using Compose in Production"
 description = "Guide to using Docker Compose in production"
 keywords = ["documentation, docs,  docker, compose, orchestration, containers,  production"]
 [menu.main]
-parent="smn_workw_compose"
-weight=1
+parent="workw_compose"
+weight=22
 +++
 <![end-metadata]-->
 
@@ -60,7 +60,7 @@ recreating any services which `web` depends on.
 You can use Compose to deploy an app to a remote Docker host by setting the
 `DOCKER_HOST`, `DOCKER_TLS_VERIFY`, and `DOCKER_CERT_PATH` environment variables
 appropriately. For tasks like this,
-[Docker Machine](https://docs.docker.com/machine/) makes managing local and
+[Docker Machine](/machine/overview) makes managing local and
 remote Docker hosts very easy, and is recommended even if you're not deploying
 remotely.
 
@@ -69,14 +69,12 @@ commands will work with no further configuration.
 
 ### Running Compose on a Swarm cluster
 
-[Docker Swarm](https://docs.docker.com/swarm/), a Docker-native clustering
+[Docker Swarm](/swarm/overview), a Docker-native clustering
 system, exposes the same API as a single Docker host, which means you can use
 Compose against a Swarm instance and run your apps across multiple hosts.
 
-Compose/Swarm integration is still in the experimental stage, and Swarm is still
-in beta, but if you'd like to explore and experiment, check out the <a
-href="https://github.com/docker/compose/blob/master/SWARM.md">integration
-guide</a>.
+Compose/Swarm integration is still in the experimental stage, but if you'd like
+to explore and experiment, check out the [integration guide](swarm.md).
 
 ## Compose documentation
 
diff --git a/docs/rails.md b/docs/rails.md
index e3daff25..8b7b4fd9 100644
--- a/docs/rails.md
+++ b/docs/rails.md
@@ -1,15 +1,15 @@
 <!--[metadata]>
 +++
-title = "Quickstart Guide: Compose and Rails"
+title = "Quickstart: Compose and Rails"
 description = "Getting started with Docker Compose and Rails"
 keywords = ["documentation, docs,  docker, compose, orchestration, containers"]
 [menu.main]
-parent="smn_workw_compose"
+parent="workw_compose"
 weight=5
 +++
 <![end-metadata]-->
 
-## Quickstart Guide: Compose and Rails
+## Quickstart: Compose and Rails
 
 This Quickstart guide will show you how to use Compose to set up and run a Rails/PostgreSQL app. Before starting, you'll need to have [Compose installed](install.md).
 
@@ -43,17 +43,19 @@ You'll need an empty `Gemfile.lock` in order to build our `Dockerfile`.
 
 Finally, `docker-compose.yml` is where the magic happens. This file describes the services that comprise your app (a database and a web app), how to get each one's Docker image (the database just runs on a pre-made PostgreSQL image, and the web app is built from the current directory), and the configuration needed to link them together and expose the web app's port.
 
-    db:
-      image: postgres
-    web:
-      build: .
-      command: bundle exec rails s -p 3000 -b '0.0.0.0'
-      volumes:
-        - .:/myapp
-      ports:
-        - "3000:3000"
-      links:
-        - db
+    version: '2'
+    services:
+      db:
+        image: postgres
+      web:
+        build: .
+        command: bundle exec rails s -p 3000 -b '0.0.0.0'
+        volumes:
+          - .:/myapp
+        ports:
+          - "3000:3000"
+        depends_on:
+          - db
 
 ### Build the project
 
diff --git a/docs/reference/docker-compose.md b/docs/reference/docker-compose.md
deleted file mode 100644
index c19e4284..00000000
--- a/docs/reference/docker-compose.md
+++ /dev/null
@@ -1,106 +0,0 @@
-<!--[metadata]>
-+++
-title = "docker-compose"
-description = "docker-compose Command Binary"
-keywords = ["fig, composition, compose, docker, orchestration, cli,  docker-compose"]
-[menu.main]
-parent = "smn_compose_cli"
-weight=-2
-+++
-<![end-metadata]-->
-
-
-# docker-compose Command
-
-```
-Usage:
-  docker-compose [-f=<arg>...] [options] [COMMAND] [ARGS...]
-  docker-compose -h|--help
-
-Options:
-  -f, --file FILE           Specify an alternate compose file (default: docker-compose.yml)
-  -p, --project-name NAME   Specify an alternate project name (default: directory name)
-  --verbose                 Show more output
-  -v, --version             Print version and exit
-
-Commands:
-  build              Build or rebuild services
-  help               Get help on a command
-  kill               Kill containers
-  logs               View output from containers
-  pause              Pause services
-  port               Print the public port for a port binding
-  ps                 List containers
-  pull               Pulls service images
-  restart            Restart services
-  rm                 Remove stopped containers
-  run                Run a one-off command
-  scale              Set number of containers for a service
-  start              Start services
-  stop               Stop services
-  unpause            Unpause services
-  up                 Create and start containers
-  version            Show the Docker-Compose version information
-```
-
-The Docker Compose binary. You use this command to build and manage multiple
-services in Docker containers.
-
-Use the `-f` flag to specify the location of a Compose configuration file. You
-can supply multiple `-f` configuration files. When you supply multiple files,
-Compose combines them into a single configuration. Compose builds the
-configuration in the order you supply the files. Subsequent files override and
-add to their successors.
-
-For example, consider this command line:
-
-```
-$ docker-compose -f docker-compose.yml -f docker-compose.admin.yml run backup_db`
-```
-
-The `docker-compose.yml` file might specify a `webapp` service.
-
-```
-webapp:
-  image: examples/web
-  ports:
-    - "8000:8000"
-  volumes:
-    - "/data"
-```
-
-If the `docker-compose.admin.yml` also specifies this same service, any matching
-fields will override the previous file. New values, add to the `webapp` service
-configuration.
-
-```
-webapp:
-  build: .
-  environment:
-    - DEBUG=1
-```
-
-Use a `-f` with `-` (dash) as the filename to read the configuration from
-stdin. When stdin is used all paths in the configuration are
-relative to the current working directory.
-
-The `-f` flag is optional. If you don't provide this flag on the command line,
-Compose traverses the working directory and its subdirectories looking for a
-`docker-compose.yml` and a `docker-compose.override.yml` file. You must
-supply at least the `docker-compose.yml` file. If both files are present,
-Compose combines the two files into a single configuration. The configuration
-in the `docker-compose.override.yml` file is applied over and in addition to
-the values in the `docker-compose.yml` file.
-
-See also the `COMPOSE_FILE` [environment variable](overview.md#compose-file).
-
-Each configuration has a project name. If you supply a `-p` flag, you can
-specify a project name. If you don't specify the flag, Compose uses the current
-directory name. See also the `COMPOSE_PROJECT_NAME` [environment variable](
-overview.md#compose-project-name)
-
-
-## Where to go next
-
-* [CLI environment variables](overview.md)
-* [Command line reference](index.md)
diff --git a/docs/reference/down.md b/docs/reference/down.md
index 428e4e58..2495abea 100644
--- a/docs/reference/down.md
+++ b/docs/reference/down.md
@@ -4,7 +4,7 @@ title = "down"
 description = "down"
 keywords = ["fig, composition, compose, docker, orchestration, cli,  down"]
 [menu.main]
-identifier="build.compose"
+identifier="down.compose"
 parent = "smn_compose_cli"
 +++
 <![end-metadata]-->
diff --git a/docs/reference/envvars.md b/docs/reference/envvars.md
new file mode 100644
index 00000000..6360fe54
--- /dev/null
+++ b/docs/reference/envvars.md
@@ -0,0 +1,78 @@
+<!--[metadata]>
++++
+title = "CLI Environment Variables"
+description = "CLI Environment Variables"
+keywords = ["fig, composition, compose, docker, orchestration, cli,  reference"]
+[menu.main]
+parent = "smn_compose_cli"
+weight=-1
++++
+<![end-metadata]-->
+
+
+# CLI Environment Variables
+
+Several environment variables are available for you to configure the Docker Compose command-line behaviour.
+
+Variables starting with `DOCKER_` are the same as those used to configure the
+Docker command-line client. If you're using `docker-machine`, then the `eval "$(docker-machine env my-docker-vm)"` command should set them to their correct values. (In this example, `my-docker-vm` is the name of a machine you created.)
+
+## COMPOSE\_PROJECT\_NAME
+
+Sets the project name. This value is prepended along with the service name to the container container on start up. For example, if you project name is `myapp` and it includes two services `db` and `web` then compose starts containers named  `myapp_db_1` and `myapp_web_1` respectively.
+
+Setting this is optional. If you do not set this, the `COMPOSE_PROJECT_NAME`
+defaults to the `basename` of the project directory. See also the `-p`
+[command-line option](overview.md).
+
+## COMPOSE\_FILE
+
+Specify the file containing the compose configuration. If not provided,
+Compose looks for a file named  `docker-compose.yml` in the current directory
+and then each parent directory in succession until a file by that name is
+found. See also the `-f` [command-line option](overview.md).
+
+## COMPOSE\_API\_VERSION
+
+The Docker API only supports requests from clients which report a specific
+version. If you receive a `client and server don't have same version error` using
+`docker-compose`, you can workaround this error by setting this environment
+variable. Set the version value to match the server version.
+
+Setting this variable is intended as a workaround for situations where you need
+to run temporarily with a mismatch between the client and server version. For
+example, if you can upgrade the client but need to wait to upgrade the server.
+
+Running with this variable set and a known mismatch does prevent some Docker
+features from working properly. The exact features that fail would depend on the
+Docker client and server versions. For this reason, running with this variable
+set is only intended as a workaround and it is not officially supported.
+
+If you run into problems running with this set, resolve the mismatch through
+upgrade and remove this setting to see if your problems resolve before notifying
+support.
+
+## DOCKER\_HOST
+
+Sets the URL of the `docker` daemon. As with the Docker client, defaults to `unix:///var/run/docker.sock`.
+
+## DOCKER\_TLS\_VERIFY
+
+When set to anything other than an empty string, enables TLS communication with
+the `docker` daemon.
+
+## DOCKER\_CERT\_PATH
+
+Configures the path to the `ca.pem`, `cert.pem`, and `key.pem` files used for TLS verification. Defaults to `~/.docker`.
+
+## COMPOSE\_HTTP\_TIMEOUT
+
+Configures the time (in seconds) a request to the Docker daemon is allowed to hang before Compose considers
+it failed. Defaults to 60 seconds.
+
+
+## Related Information
+
+- [User guide](../index.md)
+- [Installing Compose](../install.md)
+- [Compose file reference](../compose-file.md)
diff --git a/docs/reference/index.md b/docs/reference/index.md
index 5406b9c7..2ac3676a 100644
--- a/docs/reference/index.md
+++ b/docs/reference/index.md
@@ -1,18 +1,20 @@
 <!--[metadata]>
 +++
-title = "Compose CLI reference"
+title = "Command-line Reference"
 description = "Compose CLI reference"
 keywords = ["fig, composition, compose, docker, orchestration, cli,  reference"]
 [menu.main]
 identifier = "smn_compose_cli"
-parent = "smn_compose_ref"
+parent = "workw_compose"
+weight=80
 +++
 <![end-metadata]-->
 
-## Compose CLI reference
+## Compose command-line reference
 
-The following pages describe the usage information for the [docker-compose](docker-compose.md) subcommands. You can also see this information by running `docker-compose [SUBCOMMAND] --help` from the command line.
+The following pages describe the usage information for the [docker-compose](overview.md) subcommands. You can also see this information by running `docker-compose [SUBCOMMAND] --help` from the command line.
 
+* [docker-compose](overview.md)
 * [build](build.md)
 * [config](config.md)
 * [create](create.md)
@@ -36,5 +38,5 @@ The following pages describe the usage information for the [docker-compose](dock
 
 ## Where to go next
 
-* [CLI environment variables](overview.md)
-* [docker-compose Command](docker-compose.md)
+* [CLI environment variables](envvars.md)
+* [docker-compose Command](overview.md)
diff --git a/docs/reference/overview.md b/docs/reference/overview.md
index 8e3967b2..09f2817a 100644
--- a/docs/reference/overview.md
+++ b/docs/reference/overview.md
@@ -1,8 +1,9 @@
 <!--[metadata]>
 +++
-title = "Introduction to the CLI"
-description = "Introduction to the CLI"
-keywords = ["fig, composition, compose, docker, orchestration, cli,  reference"]
+title = "Overview of docker-compose CLI"
+description = "Overview of docker-compose CLI"
+keywords = ["fig, composition, compose, docker, orchestration, cli,  docker-compose"]
+aliases = ["/compose/reference/docker-compose/"]
 [menu.main]
 parent = "smn_compose_cli"
 weight=-2
@@ -10,80 +11,107 @@ weight=-2
 <![end-metadata]-->
 
 
-# Introduction to the CLI
+# Overview of docker-compose CLI
 
-This section describes the subcommands you can use with the `docker-compose` command.  You can run subcommand against one or more services. To run against a specific service, you supply the service name from your compose configuration. If you do not specify the service name, the command runs against all the services in your configuration.
+This page provides the usage information for the `docker-compose` Command.
+You can also see this information by running `docker-compose --help` from the
+command line.
+
+```
+Define and run multi-container applications with Docker.
+
+Usage:
+  docker-compose [-f=<arg>...] [options] [COMMAND] [ARGS...]
+  docker-compose -h|--help
+
+Options:
+  -f, --file FILE           Specify an alternate compose file (default: docker-compose.yml)
+  -p, --project-name NAME   Specify an alternate project name (default: directory name)
+  --verbose                 Show more output
+  -v, --version             Print version and exit
+
+Commands:
+  build              Build or rebuild services
+  config             Validate and view the compose file
+  create             Create services
+  down               Stop and remove containers, networks, images, and volumes
+  events             Receive real time events from containers
+  help               Get help on a command
+  kill               Kill containers
+  logs               View output from containers
+  pause              Pause services
+  port               Print the public port for a port binding
+  ps                 List containers
+  pull               Pulls service images
+  restart            Restart services
+  rm                 Remove stopped containers
+  run                Run a one-off command
+  scale              Set number of containers for a service
+  start              Start services
+  stop               Stop services
+  unpause            Unpause services
+  up                 Create and start containers
+  version            Show the Docker-Compose version information
+
+```
+
+The Docker Compose binary. You use this command to build and manage multiple
+services in Docker containers.
+
+Use the `-f` flag to specify the location of a Compose configuration file. You
+can supply multiple `-f` configuration files. When you supply multiple files,
+Compose combines them into a single configuration. Compose builds the
+configuration in the order you supply the files. Subsequent files override and
+add to their successors.
+
+For example, consider this command line:
+
+```
+$ docker-compose -f docker-compose.yml -f docker-compose.admin.yml run backup_db`
+```
+
+The `docker-compose.yml` file might specify a `webapp` service.
+
+```
+webapp:
+  image: examples/web
+  ports:
+    - "8000:8000"
+  volumes:
+    - "/data"
+```
+
+If the `docker-compose.admin.yml` also specifies this same service, any matching
+fields will override the previous file. New values, add to the `webapp` service
+configuration.
+
+```
+webapp:
+  build: .
+  environment:
+    - DEBUG=1
+```
+
+Use a `-f` with `-` (dash) as the filename to read the configuration from
+stdin. When stdin is used all paths in the configuration are
+relative to the current working directory.
+
+The `-f` flag is optional. If you don't provide this flag on the command line,
+Compose traverses the working directory and its parent directories looking for a
+`docker-compose.yml` and a `docker-compose.override.yml` file. You must
+supply at least the `docker-compose.yml` file. If both files are present on the
+same directory level, Compose combines the two files into a single configuration.
+The configuration in the `docker-compose.override.yml` file is applied over and
+in addition to the values in the `docker-compose.yml` file.
+
+See also the `COMPOSE_FILE` [environment variable](envvars.md#compose-file).
+
+Each configuration has a project name. If you supply a `-p` flag, you can
+specify a project name. If you don't specify the flag, Compose uses the current
+directory name. See also the `COMPOSE_PROJECT_NAME` [environment variable](
+envvars.md#compose-project-name)
 
 
-## Commands
+## Where to go next
 
-* [docker-compose Command](docker-compose.md)
-* [CLI Reference](index.md)
-
-
-## Environment Variables
-
-Several environment variables are available for you to configure the Docker Compose command-line behaviour.
-
-Variables starting with `DOCKER_` are the same as those used to configure the
-Docker command-line client. If you're using `docker-machine`, then the `eval "$(docker-machine env my-docker-vm)"` command should set them to their correct values. (In this example, `my-docker-vm` is the name of a machine you created.)
-
-### COMPOSE\_PROJECT\_NAME
-
-Sets the project name. This value is prepended along with the service name to the container container on start up. For example, if you project name is `myapp` and it includes two services `db` and `web` then compose starts containers named  `myapp_db_1` and `myapp_web_1` respectively.
-
-Setting this is optional. If you do not set this, the `COMPOSE_PROJECT_NAME`
-defaults to the `basename` of the project directory. See also the `-p`
-[command-line option](docker-compose.md).
-
-### COMPOSE\_FILE
-
-Specify the file containing the compose configuration. If not provided,
-Compose looks for a file named  `docker-compose.yml` in the current directory
-and then each parent directory in succession until a file by that name is
-found. See also the `-f` [command-line option](docker-compose.md).
-
-### COMPOSE\_API\_VERSION
-
-The Docker API only supports requests from clients which report a specific
-version. If you receive a `client and server don't have same version error` using
-`docker-compose`, you can workaround this error by setting this environment
-variable. Set the version value to match the server version.
-
-Setting this variable is intended as a workaround for situations where you need
-to run temporarily with a mismatch between the client and server version. For
-example, if you can upgrade the client but need to wait to upgrade the server.
-
-Running with this variable set and a known mismatch does prevent some Docker
-features from working properly. The exact features that fail would depend on the
-Docker client and server versions. For this reason, running with this variable
-set is only intended as a workaround and it is not officially supported.
-
-If you run into problems running with this set, resolve the mismatch through
-upgrade and remove this setting to see if your problems resolve before notifying
-support.
-
-### DOCKER\_HOST
-
-Sets the URL of the `docker` daemon. As with the Docker client, defaults to `unix:///var/run/docker.sock`.
-
-### DOCKER\_TLS\_VERIFY
-
-When set to anything other than an empty string, enables TLS communication with
-the `docker` daemon.
-
-### DOCKER\_CERT\_PATH
-
-Configures the path to the `ca.pem`, `cert.pem`, and `key.pem` files used for TLS verification. Defaults to `~/.docker`.
-
-### COMPOSE\_HTTP\_TIMEOUT
-
-Configures the time (in seconds) a request to the Docker daemon is allowed to hang before Compose considers
-it failed. Defaults to 60 seconds.
-
-
-## Related Information
-
-- [User guide](../index.md)
-- [Installing Compose](../install.md)
-- [Compose file reference](../compose-file.md)
+* [CLI environment variables](envvars.md)
diff --git a/docs/swarm.md b/docs/swarm.md
new file mode 100644
index 00000000..2b609efa
--- /dev/null
+++ b/docs/swarm.md
@@ -0,0 +1,184 @@
+<!--[metadata]>
++++
+title = "Using Compose with Swarm"
+description = "How to use Compose and Swarm together to deploy apps to multi-host clusters"
+keywords = ["documentation, docs,  docker, compose, orchestration, containers, swarm"]
+[menu.main]
+parent="workw_compose"
++++
+<![end-metadata]-->
+
+
+# Using Compose with Swarm
+
+Docker Compose and [Docker Swarm](/swarm/overview) aim to have full integration, meaning
+you can point a Compose app at a Swarm cluster and have it all just work as if
+you were using a single Docker host.
+
+The actual extent of integration depends on which version of the [Compose file
+format](compose-file.md#versioning) you are using:
+
+1.  If you're using version 1 along with `links`, your app will work, but Swarm
+    will schedule all containers on one host, because links between containers
+    do not work across hosts with the old networking system.
+
+2. If you're using version 2, your app should work with no changes:
+
+    - subject to the [limitations](#limitations) described below,
+
+    - as long as the Swarm cluster is configured to use the [overlay
+      driver](/engine/userguide/networking/dockernetworks.md#an-overlay-network),
+      or a custom driver which supports multi-host networking.
+
+Read the [Getting started with multi-host
+networking](/engine/userguide/networking/get-started-overlay.md) to see how to
+set up a Swarm cluster with [Docker Machine](/machine/overview) and the overlay driver.
+Once you've got it running, deploying your app to it should be as simple as:
+
+    $ eval "$(docker-machine env --swarm <name of swarm master machine>)"
+    $ docker-compose up
+
+
+## Limitations
+
+### Building images
+
+Swarm can build an image from a Dockerfile just like a single-host Docker
+instance can, but the resulting image will only live on a single node and won't
+be distributed to other nodes.
+
+If you want to use Compose to scale the service in question to multiple nodes,
+you'll have to build it yourself, push it to a registry (e.g. the Docker Hub)
+and reference it from `docker-compose.yml`:
+
+    $ docker build -t myusername/web .
+    $ docker push myusername/web
+
+    $ cat docker-compose.yml
+    web:
+      image: myusername/web
+
+    $ docker-compose up -d
+    $ docker-compose scale web=3
+
+### Multiple dependencies
+
+If a service has multiple dependencies of the type which force co-scheduling
+(see [Automatic scheduling](#automatic-scheduling) below), it's possible that
+Swarm will schedule the dependencies on different nodes, making the dependent
+service impossible to schedule. For example, here `foo` needs to be co-scheduled
+with `bar` and `baz`:
+
+    version: "2"
+    services:
+      foo:
+        image: foo
+        volumes_from: ["bar"]
+        network_mode: "service:baz"
+      bar:
+        image: bar
+      baz:
+        image: baz
+
+The problem is that Swarm might first schedule `bar` and `baz` on different
+nodes (since they're not dependent on one another), making it impossible to
+pick an appropriate node for `foo`.
+
+To work around this, use [manual scheduling](#manual-scheduling) to ensure that
+all three services end up on the same node:
+
+    version: "2"
+    services:
+      foo:
+        image: foo
+        volumes_from: ["bar"]
+        network_mode: "service:baz"
+        environment:
+          - "constraint:node==node-1"
+      bar:
+        image: bar
+        environment:
+          - "constraint:node==node-1"
+      baz:
+        image: baz
+        environment:
+          - "constraint:node==node-1"
+
+### Host ports and recreating containers
+
+If a service maps a port from the host, e.g. `80:8000`, then you may get an
+error like this when running `docker-compose up` on it after the first time:
+
+    docker: Error response from daemon: unable to find a node that satisfies
+    container==6ab2dfe36615ae786ef3fc35d641a260e3ea9663d6e69c5b70ce0ca6cb373c02.
+
+The usual cause of this error is that the container has a volume (defined either
+in its image or in the Compose file) without an explicit mapping, and so in
+order to preserve its data, Compose has directed Swarm to schedule the new
+container on the same node as the old container. This results in a port clash.
+
+There are two viable workarounds for this problem:
+
+-   Specify a named volume, and use a volume driver which is capable of mounting
+    the volume into the container regardless of what node it's scheduled on.
+
+    Compose does not give Swarm any specific scheduling instructions if a
+    service uses only named volumes.
+
+        version: "2"
+
+        services:
+          web:
+            build: .
+            ports:
+              - "80:8000"
+            volumes:
+              - web-logs:/var/log/web
+
+        volumes:
+          web-logs:
+            driver: custom-volume-driver
+
+-   Remove the old container before creating the new one. You will lose any data
+    in the volume.
+
+        $ docker-compose stop web
+        $ docker-compose rm -f web
+        $ docker-compose up web
+
+
+## Scheduling containers
+
+### Automatic scheduling
+
+Some configuration options will result in containers being automatically
+scheduled on the same Swarm node to ensure that they work correctly. These are:
+
+-   `network_mode: "service:..."` and `network_mode: "container:..."` (and
+    `net: "container:..."` in the version 1 file format).
+
+-   `volumes_from`
+
+-   `links`
+
+### Manual scheduling
+
+Swarm offers a rich set of scheduling and affinity hints, enabling you to
+control where containers are located. They are specified via container
+environment variables, so you can use Compose's `environment` option to set
+them.
+
+    # Schedule containers on a specific node
+    environment:
+      - "constraint:node==node-1"
+
+    # Schedule containers on a node that has the 'storage' label set to 'ssd'
+    environment:
+      - "constraint:storage==ssd"
+
+    # Schedule containers where the 'redis' image is already pulled
+    environment:
+      - "affinity:image==redis"
+
+For the full set of available filters and expressions, see the [Swarm
+documentation](/swarm/scheduler/filter.md).
diff --git a/docs/wordpress.md b/docs/wordpress.md
index 84010491..62aec251 100644
--- a/docs/wordpress.md
+++ b/docs/wordpress.md
@@ -1,16 +1,16 @@
 <!--[metadata]>
 +++
-title = "Quickstart Guide: Compose and WordPress"
+title = "Quickstart: Compose and WordPress"
 description = "Getting started with Compose and WordPress"
 keywords = ["documentation, docs,  docker, compose, orchestration, containers"]
 [menu.main]
-parent="smn_workw_compose"
+parent="workw_compose"
 weight=6
 +++
 <![end-metadata]-->
 
 
-# Quickstart Guide: Compose and WordPress
+# Quickstart: Compose and WordPress
 
 You can use Compose to easily run WordPress in an isolated environment built
 with Docker containers.
@@ -41,19 +41,21 @@ and WordPress.
 Next you'll create a `docker-compose.yml` file that will start your web service
 and a separate MySQL instance:
 
-    web:
-      build: .
-      command: php -S 0.0.0.0:8000 -t /code
-      ports:
-        - "8000:8000"
-      links:
-        - db
-      volumes:
-        - .:/code
-    db:
-      image: orchardup/mysql
-      environment:
-        MYSQL_DATABASE: wordpress
+    version: '2'
+    services:
+      web:
+        build: .
+        command: php -S 0.0.0.0:8000 -t /code
+        ports:
+          - "8000:8000"
+        depends_on:
+          - db
+        volumes:
+          - .:/code
+      db:
+        image: orchardup/mysql
+        environment:
+          MYSQL_DATABASE: wordpress
 
 A supporting file is needed to get this working. `wp-config.php` is
 the standard WordPress config file with a single change to point the database
diff --git a/requirements-build.txt b/requirements-build.txt
index 20aad420..3f1dbd75 100644
--- a/requirements-build.txt
+++ b/requirements-build.txt
@@ -1 +1 @@
-pyinstaller==3.0
+pyinstaller==3.1.1
diff --git a/requirements.txt b/requirements.txt
index 563baa10..5f55ba8a 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1,9 +1,9 @@
 PyYAML==3.11
 cached-property==1.2.0
-dockerpty==0.3.4
+docker-py==1.7.1
+dockerpty==0.4.1
 docopt==0.6.1
 enum34==1.0.4
-git+https://github.com/docker/docker-py.git@master#egg=docker-py
 jsonschema==2.5.1
 requests==2.7.0
 six==1.7.3
diff --git a/script/build-windows.ps1 b/script/build-windows.ps1
index 28011b1d..4a2bc1f7 100644
--- a/script/build-windows.ps1
+++ b/script/build-windows.ps1
@@ -41,6 +41,9 @@ Get-ChildItem -Recurse -Include *.pyc | foreach ($_) { Remove-Item $_.FullName }
 # Create virtualenv
 virtualenv .\venv
 
+# pip and pyinstaller generate lots of warnings, so we need to ignore them
+$ErrorActionPreference = "Continue"
+
 # Install dependencies
 .\venv\Scripts\pip install pypiwin32==219
 .\venv\Scripts\pip install -r requirements.txt
@@ -50,8 +53,6 @@ virtualenv .\venv
 git rev-parse --short HEAD | out-file -encoding ASCII compose\GITSHA
 
 # Build binary
-# pyinstaller has lots of warnings, so we need to run with ErrorAction = Continue
-$ErrorActionPreference = "Continue"
 .\venv\Scripts\pyinstaller .\docker-compose.spec
 $ErrorActionPreference = "Stop"
 
diff --git a/script/release/contributors b/script/release/contributors
index bb9fe871..1e69b143 100755
--- a/script/release/contributors
+++ b/script/release/contributors
@@ -18,10 +18,13 @@ PREV_RELEASE=$1
 VERSION=HEAD
 URL="https://api.github.com/repos/docker/compose/compare"
 
-curl -sf "$URL/$PREV_RELEASE...$VERSION" | \
+contribs=$(curl -sf "$URL/$PREV_RELEASE...$VERSION" | \
     jq -r '.commits[].author.login' | \
     sort | \
     uniq -c | \
-    sort -nr | \
-    awk '{print "@"$2","}' | \
-    xargs echo
+    sort -nr)
+
+echo "Contributions by user: "
+echo "$contribs"
+echo
+echo "$contribs" | awk '{print "@"$2","}' | xargs
diff --git a/script/release/make-branch b/script/release/make-branch
index 48fa771b..46ba6bbc 100755
--- a/script/release/make-branch
+++ b/script/release/make-branch
@@ -63,15 +63,17 @@ git merge --strategy=ours --no-edit $REMOTE/release
 git config "branch.${BRANCH}.release" $VERSION
 
 
+editor=${EDITOR:-vim}
+
 echo "Update versions in docs/install.md, compose/__init__.py, script/run.sh"
-$EDITOR docs/install.md
-$EDITOR compose/__init__.py
-$EDITOR script/run.sh
+$editor docs/install.md
+$editor compose/__init__.py
+$editor script/run.sh
 
 
 echo "Write release notes in CHANGELOG.md"
 browser "https://github.com/docker/compose/issues?q=milestone%3A$VERSION+is%3Aclosed"
-$EDITOR CHANGELOG.md
+$editor CHANGELOG.md
 
 
 git diff
@@ -84,10 +86,10 @@ echo "Push branch to user remote"
 GITHUB_USER=$USER
 USER_REMOTE="$(find_remote $GITHUB_USER/compose)"
 if [ -z "$USER_REMOTE" ]; then
-    echo "No user remote found for $GITHUB_USER"
-    read -r -p "Enter the name of your github user: " GITHUB_USER
+    echo "$GITHUB_USER/compose not found"
+    read -r -p "Enter the name of your GitHub fork (username/repo): " GITHUB_REPO
     # assumes there is already a user remote somewhere
-    USER_REMOTE=$(find_remote $GITHUB_USER/compose)
+    USER_REMOTE=$(find_remote $GITHUB_REPO)
 fi
 if [ -z "$USER_REMOTE" ]; then
     >&2 echo "No user remote found. You need to 'git push' your branch."
diff --git a/script/release/push-release b/script/release/push-release
index b754d40f..7d9ec0a2 100755
--- a/script/release/push-release
+++ b/script/release/push-release
@@ -60,7 +60,7 @@ sed -i -e 's/logo.png?raw=true/https:\/\/github.com\/docker\/compose\/raw\/maste
 ./script/write-git-sha
 python setup.py sdist
 if [ "$(command -v twine 2> /dev/null)" ]; then
-    twine upload ./dist/docker-compose-${VERSION}.tar.gz
+    twine upload ./dist/docker-compose-${VERSION/-/}.tar.gz
 else
     python setup.py upload
 fi
diff --git a/script/release/rebase-bump-commit b/script/release/rebase-bump-commit
index 23877bb5..3c2ae72b 100755
--- a/script/release/rebase-bump-commit
+++ b/script/release/rebase-bump-commit
@@ -32,7 +32,7 @@ if [[ "$sha" == "$(git rev-parse HEAD)" ]]; then
     exit 0
 fi
 
-commits=$(git log --format="%H" "$sha..HEAD" | wc -l)
+commits=$(git log --format="%H" "$sha..HEAD" | wc -l | xargs echo)
 
 git rebase --onto $sha~1 HEAD~$commits $BRANCH
 git cherry-pick $sha
diff --git a/script/run.ps1 b/script/run.ps1
index 47ec5469..f4ff2abb 100644
--- a/script/run.ps1
+++ b/script/run.ps1
@@ -5,7 +5,7 @@
 # $Env:DOCKER_COMPOSE_OPTIONS.
 
 if ($Env:DOCKER_COMPOSE_VERSION -eq $null -or $Env:DOCKER_COMPOSE_VERSION.Length -eq 0) {
-    $Env:DOCKER_COMPOSE_VERSION = "latest"
+    $Env:DOCKER_COMPOSE_VERSION = "1.6.0rc1"
 }
 
 if ($Env:DOCKER_COMPOSE_OPTIONS -eq $null) {
diff --git a/script/run.sh b/script/run.sh
index 087c2692..3e30dd15 100755
--- a/script/run.sh
+++ b/script/run.sh
@@ -15,7 +15,7 @@
 
 set -e
 
-VERSION="1.5.2"
+VERSION="1.6.1"
 IMAGE="docker/compose:$VERSION"
 
 
@@ -31,7 +31,9 @@ fi
 
 
 # Setup volume mounts for compose config and context
-VOLUMES="-v $(pwd):$(pwd)"
+if [ "$(pwd)" != '/' ]; then
+    VOLUMES="-v $(pwd):$(pwd)"
+fi
 if [ -n "$COMPOSE_FILE" ]; then
     compose_dir=$(dirname $COMPOSE_FILE)
 fi
@@ -45,9 +47,10 @@ fi
 
 # Only allocate tty if we detect one
 if [ -t 1 ]; then
-    DOCKER_RUN_OPTIONS="-ti"
-else
-    DOCKER_RUN_OPTIONS="-i"
+    DOCKER_RUN_OPTIONS="-t"
+fi
+if [ -t 0 ]; then
+    DOCKER_RUN_OPTIONS="$DOCKER_RUN_OPTIONS -i"
 fi
 
-exec docker run --rm $DOCKER_RUN_OPTIONS $DOCKER_ADDR $COMPOSE_OPTIONS $VOLUMES -w $(pwd) $IMAGE $@
+exec docker run --rm $DOCKER_RUN_OPTIONS $DOCKER_ADDR $COMPOSE_OPTIONS $VOLUMES -w "$(pwd)" $IMAGE "$@"
diff --git a/script/test-versions b/script/test-versions
index 24412b91..2e9c9167 100755
--- a/script/test-versions
+++ b/script/test-versions
@@ -18,7 +18,7 @@ get_versions="docker run --rm
 if [ "$DOCKER_VERSIONS" == "" ]; then
   DOCKER_VERSIONS="$($get_versions default)"
 elif [ "$DOCKER_VERSIONS" == "all" ]; then
-  DOCKER_VERSIONS="1.9.1 1.10.0-dev"
+  DOCKER_VERSIONS=$($get_versions -n 2 recent)
 fi
 
 
@@ -38,11 +38,7 @@ for version in $DOCKER_VERSIONS; do
 
   trap "on_exit" EXIT
 
-  if [[ $version == *"-dev" ]]; then
-    repo="dnephin/dind"
-  else
-    repo="dockerswarm/dind"
-  fi
+  repo="dockerswarm/dind"
 
   docker run \
     -d \
diff --git a/setup.py b/setup.py
index b365e05b..df4172ce 100644
--- a/setup.py
+++ b/setup.py
@@ -34,8 +34,8 @@ install_requires = [
     'requests >= 2.6.1, < 2.8',
     'texttable >= 0.8.1, < 0.9',
     'websocket-client >= 0.32.0, < 1.0',
-    'docker-py >= 1.5.0, < 2',
-    'dockerpty >= 0.3.4, < 0.4',
+    'docker-py >= 1.7.0, < 2',
+    'dockerpty >= 0.4.1, < 0.5',
     'six >= 1.3.0, < 2',
     'jsonschema >= 2.5.1, < 3',
 ]
diff --git a/tests/acceptance/cli_test.py b/tests/acceptance/cli_test.py
index 231b78db..28f5155a 100644
--- a/tests/acceptance/cli_test.py
+++ b/tests/acceptance/cli_test.py
@@ -43,12 +43,13 @@ def start_process(base_dir, options):
 def wait_on_process(proc, returncode=0):
     stdout, stderr = proc.communicate()
     if proc.returncode != returncode:
-        print(stderr.decode('utf-8'))
+        print("Stderr: {}".format(stderr))
+        print("Stdout: {}".format(stdout))
         assert proc.returncode == returncode
     return ProcessResult(stdout.decode('utf-8'), stderr.decode('utf-8'))
 
 
-def wait_on_condition(condition, delay=0.1, timeout=20):
+def wait_on_condition(condition, delay=0.1, timeout=40):
     start_time = time.time()
     while not condition():
         if time.time() - start_time > timeout:
@@ -81,7 +82,6 @@ class ContainerStateCondition(object):
         self.name = name
         self.running = running
 
-    # State.Running == true
     def __call__(self):
         try:
             container = self.client.inspect_container(self.name)
@@ -159,7 +159,7 @@ class CLITestCase(DockerClientTestCase):
             '-f', 'tests/fixtures/invalid-composefile/invalid.yml',
             'config', '-q'
         ], returncode=1)
-        assert "'notaservice' doesn't have any configuration" in result.stderr
+        assert "'notaservice' must be a mapping" in result.stderr
 
     # TODO: this shouldn't be v2-dependent
     @v2_only()
@@ -177,7 +177,7 @@ class CLITestCase(DockerClientTestCase):
 
         output = yaml.load(result.stdout)
         expected = {
-            'version': 2,
+            'version': '2.0',
             'volumes': {'data': {'driver': 'local'}},
             'networks': {'front': {}},
             'services': {
@@ -185,7 +185,7 @@ class CLITestCase(DockerClientTestCase):
                     'build': {
                         'context': os.path.abspath(self.base_dir),
                     },
-                    'networks': ['front', 'default'],
+                    'networks': {'front': None, 'default': None},
                     'volumes_from': ['service:other:rw'],
                 },
                 'other': {
@@ -406,9 +406,11 @@ class CLITestCase(DockerClientTestCase):
 
         services = self.project.get_services()
 
-        networks = self.client.networks(names=[self.project.default_network.full_name])
+        network_name = self.project.networks.networks['default'].full_name
+        networks = self.client.networks(names=[network_name])
         self.assertEqual(len(networks), 1)
         self.assertEqual(networks[0]['Driver'], 'bridge')
+        assert 'com.docker.network.bridge.enable_icc' not in networks[0]['Options']
 
         network = self.client.inspect_network(networks[0]['Id'])
 
@@ -419,12 +421,58 @@ class CLITestCase(DockerClientTestCase):
             container = containers[0]
             self.assertIn(container.id, network['Containers'])
 
-            networks = list(container.get('NetworkSettings.Networks'))
-            self.assertEqual(networks, [network['Name']])
+            networks = container.get('NetworkSettings.Networks')
+            self.assertEqual(list(networks), [network['Name']])
+
+            self.assertEqual(
+                sorted(networks[network['Name']]['Aliases']),
+                sorted([service.name, container.short_id]))
 
             for service in services:
                 assert self.lookup(container, service.name)
 
+    @v2_only()
+    def test_up_with_default_network_config(self):
+        filename = 'default-network-config.yml'
+
+        self.base_dir = 'tests/fixtures/networks'
+        self._project = get_project(self.base_dir, [filename])
+
+        self.dispatch(['-f', filename, 'up', '-d'], None)
+
+        network_name = self.project.networks.networks['default'].full_name
+        networks = self.client.networks(names=[network_name])
+
+        assert networks[0]['Options']['com.docker.network.bridge.enable_icc'] == 'false'
+
+    @v2_only()
+    def test_up_with_network_aliases(self):
+        filename = 'network-aliases.yml'
+        self.base_dir = 'tests/fixtures/networks'
+        self.dispatch(['-f', filename, 'up', '-d'], None)
+        back_name = '{}_back'.format(self.project.name)
+        front_name = '{}_front'.format(self.project.name)
+
+        networks = [
+            n for n in self.client.networks()
+            if n['Name'].startswith('{}_'.format(self.project.name))
+        ]
+
+        # Two networks were created: back and front
+        assert sorted(n['Name'] for n in networks) == [back_name, front_name]
+        web_container = self.project.get_service('web').containers()[0]
+
+        back_aliases = web_container.get(
+            'NetworkSettings.Networks.{}.Aliases'.format(back_name)
+        )
+        assert 'web' in back_aliases
+        front_aliases = web_container.get(
+            'NetworkSettings.Networks.{}.Aliases'.format(front_name)
+        )
+        assert 'web' in front_aliases
+        assert 'forward_facing' in front_aliases
+        assert 'ahead' in front_aliases
+
     @v2_only()
     def test_up_with_networks(self):
         self.base_dir = 'tests/fixtures/networks'
@@ -448,6 +496,10 @@ class CLITestCase(DockerClientTestCase):
         app_container = self.project.get_service('app').containers()[0]
         db_container = self.project.get_service('db').containers()[0]
 
+        for net_name in [front_name, back_name]:
+            links = app_container.get('NetworkSettings.Networks.{}.Links'.format(net_name))
+            assert '{}:database'.format(db_container.name) in links
+
         # db and app joined the back network
         assert sorted(back_network['Containers']) == sorted([db_container.id, app_container.id])
 
@@ -461,6 +513,9 @@ class CLITestCase(DockerClientTestCase):
         # app can see db
         assert self.lookup(app_container, "db")
 
+        # app has aliased db to "database"
+        assert self.lookup(app_container, "database")
+
     @v2_only()
     def test_up_missing_network(self):
         self.base_dir = 'tests/fixtures/networks'
@@ -472,8 +527,13 @@ class CLITestCase(DockerClientTestCase):
         assert 'Service "web" uses an undefined network "foo"' in result.stderr
 
     @v2_only()
-    def test_up_predefined_networks(self):
-        filename = 'predefined-networks.yml'
+    def test_up_with_network_mode(self):
+        c = self.client.create_container('busybox', 'top', name='composetest_network_mode_container')
+        self.addCleanup(self.client.remove_container, c, force=True)
+        self.client.start(c)
+        container_mode_source = 'container:{}'.format(c['Id'])
+
+        filename = 'network-mode.yml'
 
         self.base_dir = 'tests/fixtures/networks'
         self._project = get_project(self.base_dir, [filename])
@@ -491,6 +551,16 @@ class CLITestCase(DockerClientTestCase):
             assert list(container.get('NetworkSettings.Networks')) == [name]
             assert container.get('HostConfig.NetworkMode') == name
 
+        service_mode_source = 'container:{}'.format(
+            self.project.get_service('bridge').containers()[0].id)
+        service_mode_container = self.project.get_service('service').containers()[0]
+        assert not service_mode_container.get('NetworkSettings.Networks')
+        assert service_mode_container.get('HostConfig.NetworkMode') == service_mode_source
+
+        container_mode_container = self.project.get_service('container').containers()[0]
+        assert not container_mode_container.get('NetworkSettings.Networks')
+        assert container_mode_container.get('HostConfig.NetworkMode') == container_mode_source
+
     @v2_only()
     def test_up_external_networks(self):
         filename = 'external-networks.yml'
@@ -515,6 +585,29 @@ class CLITestCase(DockerClientTestCase):
         container = self.project.containers()[0]
         assert sorted(list(container.get('NetworkSettings.Networks'))) == sorted(network_names)
 
+    @v2_only()
+    def test_up_with_external_default_network(self):
+        filename = 'external-default.yml'
+
+        self.base_dir = 'tests/fixtures/networks'
+        self._project = get_project(self.base_dir, [filename])
+
+        result = self.dispatch(['-f', filename, 'up', '-d'], returncode=1)
+        assert 'declared as external, but could not be found' in result.stderr
+
+        networks = [
+            n['Name'] for n in self.client.networks()
+            if n['Name'].startswith('{}_'.format(self.project.name))
+        ]
+        assert not networks
+
+        network_name = 'composetest_external_network'
+        self.client.create_network(network_name)
+
+        self.dispatch(['-f', filename, 'up', '-d'])
+        container = self.project.containers()[0]
+        assert list(container.get('NetworkSettings.Networks')) == [network_name]
+
     @v2_only()
     def test_up_no_services(self):
         self.base_dir = 'tests/fixtures/no-services'
@@ -524,30 +617,15 @@ class CLITestCase(DockerClientTestCase):
             n['Name'] for n in self.client.networks()
             if n['Name'].startswith('{}_'.format(self.project.name))
         ]
-
-        assert sorted(network_names) == [
-            '{}_{}'.format(self.project.name, name)
-            for name in ['bar', 'foo']
-        ]
-
-    @v2_only()
-    def test_up_with_links_is_invalid(self):
-        self.base_dir = 'tests/fixtures/v2-simple'
-
-        result = self.dispatch(
-            ['-f', 'links-invalid.yml', 'up', '-d'],
-            returncode=1)
-
-        # TODO: fix validation error messages for v2 files
-        # assert "Unsupported config option for service 'simple': 'links'" in result.stderr
-        assert "Unsupported config option" in result.stderr
+        assert network_names == []
 
     def test_up_with_links_v1(self):
         self.base_dir = 'tests/fixtures/links-composefile'
         self.dispatch(['up', '-d', 'web'], None)
 
         # No network was created
-        networks = self.client.networks(names=[self.project.default_network.full_name])
+        network_name = self.project.networks.networks['default'].full_name
+        networks = self.client.networks(names=[network_name])
         assert networks == []
 
         web = self.project.get_service('web')
@@ -648,14 +726,31 @@ class CLITestCase(DockerClientTestCase):
         wait_on_condition(ContainerCountCondition(self.project, 2))
 
         os.kill(proc.pid, signal.SIGINT)
-        wait_on_condition(ContainerCountCondition(self.project, 0), timeout=30)
+        wait_on_condition(ContainerCountCondition(self.project, 0))
 
     def test_up_handles_sigterm(self):
         proc = start_process(self.base_dir, ['up', '-t', '2'])
         wait_on_condition(ContainerCountCondition(self.project, 2))
 
         os.kill(proc.pid, signal.SIGTERM)
-        wait_on_condition(ContainerCountCondition(self.project, 0), timeout=30)
+        wait_on_condition(ContainerCountCondition(self.project, 0))
+
+    @v2_only()
+    def test_up_handles_force_shutdown(self):
+        self.base_dir = 'tests/fixtures/sleeps-composefile'
+        proc = start_process(self.base_dir, ['up', '-t', '200'])
+        wait_on_condition(ContainerCountCondition(self.project, 2))
+
+        os.kill(proc.pid, signal.SIGTERM)
+        time.sleep(0.1)
+        os.kill(proc.pid, signal.SIGTERM)
+        wait_on_condition(ContainerCountCondition(self.project, 0))
+
+    def test_up_handles_abort_on_container_exit(self):
+        start_process(self.base_dir, ['up', '--abort-on-container-exit'])
+        wait_on_condition(ContainerCountCondition(self.project, 2))
+        self.project.stop(['simple'])
+        wait_on_condition(ContainerCountCondition(self.project, 0))
 
     def test_run_service_without_links(self):
         self.base_dir = 'tests/fixtures/links-composefile'
@@ -677,6 +772,15 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(len(db.containers()), 1)
         self.assertEqual(len(console.containers()), 0)
 
+    @v2_only()
+    def test_run_service_with_dependencies(self):
+        self.base_dir = 'tests/fixtures/v2-dependencies'
+        self.dispatch(['run', 'web', '/bin/true'], None)
+        db = self.project.get_service('db')
+        console = self.project.get_service('console')
+        self.assertEqual(len(db.containers()), 1)
+        self.assertEqual(len(console.containers()), 0)
+
     def test_run_with_no_deps(self):
         self.base_dir = 'tests/fixtures/links-composefile'
         self.dispatch(['run', '--no-deps', 'web', '/bin/true'])
@@ -872,14 +976,47 @@ class CLITestCase(DockerClientTestCase):
         self.assertEqual(container.name, name)
 
     @v2_only()
-    def test_run_with_networking(self):
-        self.base_dir = 'tests/fixtures/v2-simple'
-        self.dispatch(['run', 'simple', 'true'], None)
-        service = self.project.get_service('simple')
-        container, = service.containers(stopped=True, one_off=True)
-        networks = self.client.networks(names=[self.project.default_network.full_name])
-        self.assertEqual(len(networks), 1)
-        self.assertEqual(container.human_readable_command, u'true')
+    def test_run_interactive_connects_to_network(self):
+        self.base_dir = 'tests/fixtures/networks'
+
+        self.dispatch(['up', '-d'])
+        self.dispatch(['run', 'app', 'nslookup', 'app'])
+        self.dispatch(['run', 'app', 'nslookup', 'db'])
+
+        containers = self.project.get_service('app').containers(
+            stopped=True, one_off=True)
+        assert len(containers) == 2
+
+        for container in containers:
+            networks = container.get('NetworkSettings.Networks')
+
+            assert sorted(list(networks)) == [
+                '{}_{}'.format(self.project.name, name)
+                for name in ['back', 'front']
+            ]
+
+            for _, config in networks.items():
+                assert not config['Aliases']
+
+    @v2_only()
+    def test_run_detached_connects_to_network(self):
+        self.base_dir = 'tests/fixtures/networks'
+        self.dispatch(['up', '-d'])
+        self.dispatch(['run', '-d', 'app', 'top'])
+
+        container = self.project.get_service('app').containers(one_off=True)[0]
+        networks = container.get('NetworkSettings.Networks')
+
+        assert sorted(list(networks)) == [
+            '{}_{}'.format(self.project.name, name)
+            for name in ['back', 'front']
+        ]
+
+        for _, config in networks.items():
+            assert not config['Aliases']
+
+        assert self.lookup(container, 'app')
+        assert self.lookup(container, 'db')
 
     def test_run_handles_sigint(self):
         proc = start_process(self.base_dir, ['run', '-T', 'simple', 'top'])
diff --git a/tests/fixtures/extends/common.yml b/tests/fixtures/extends/common.yml
index 358ef5bc..b2d86aa4 100644
--- a/tests/fixtures/extends/common.yml
+++ b/tests/fixtures/extends/common.yml
@@ -1,6 +1,7 @@
 web:
   image: busybox
   command: /bin/true
+  net: host
   environment:
     - FOO=1
     - BAR=1
diff --git a/tests/fixtures/extends/docker-compose.yml b/tests/fixtures/extends/docker-compose.yml
index c51be49e..8e37d404 100644
--- a/tests/fixtures/extends/docker-compose.yml
+++ b/tests/fixtures/extends/docker-compose.yml
@@ -11,6 +11,7 @@ myweb:
     BAR: "2"
     # add BAZ
     BAZ: "2"
+  net: bridge
 mydb:
   image: busybox
   command: top
diff --git a/tests/fixtures/extends/invalid-net-v2.yml b/tests/fixtures/extends/invalid-net-v2.yml
new file mode 100644
index 00000000..7ba714e8
--- /dev/null
+++ b/tests/fixtures/extends/invalid-net-v2.yml
@@ -0,0 +1,12 @@
+version: "2"
+services:
+  myweb:
+    build: '.'
+    extends:
+      service: web
+    command: top
+  web:
+    build: '.'
+    network_mode: "service:net"
+  net:
+    build: '.'
diff --git a/tests/fixtures/logging-composefile/docker-compose.yml b/tests/fixtures/logging-composefile/docker-compose.yml
index 0a73030a..466d13e5 100644
--- a/tests/fixtures/logging-composefile/docker-compose.yml
+++ b/tests/fixtures/logging-composefile/docker-compose.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 services:
   simple:
     image: busybox:latest
diff --git a/tests/fixtures/net-container/v2-invalid.yml b/tests/fixtures/net-container/v2-invalid.yml
index eac4b5f1..9b846295 100644
--- a/tests/fixtures/net-container/v2-invalid.yml
+++ b/tests/fixtures/net-container/v2-invalid.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 
 services:
   foo:
diff --git a/tests/fixtures/networks/bridge.yml b/tests/fixtures/networks/bridge.yml
new file mode 100644
index 00000000..9fa7db82
--- /dev/null
+++ b/tests/fixtures/networks/bridge.yml
@@ -0,0 +1,9 @@
+version: "2"
+
+services:
+  web:
+    image: busybox
+    command: top
+    networks:
+      - bridge
+      - default
diff --git a/tests/fixtures/networks/default-network-config.yml b/tests/fixtures/networks/default-network-config.yml
new file mode 100644
index 00000000..4bd0989b
--- /dev/null
+++ b/tests/fixtures/networks/default-network-config.yml
@@ -0,0 +1,13 @@
+version: "2"
+services:
+  simple:
+    image: busybox:latest
+    command: top
+  another:
+    image: busybox:latest
+    command: top
+networks:
+  default:
+    driver: bridge
+    driver_opts:
+      "com.docker.network.bridge.enable_icc": "false"
diff --git a/tests/fixtures/networks/docker-compose.yml b/tests/fixtures/networks/docker-compose.yml
index f1b79df0..c11fa682 100644
--- a/tests/fixtures/networks/docker-compose.yml
+++ b/tests/fixtures/networks/docker-compose.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 
 services:
   web:
@@ -9,6 +9,8 @@ services:
     image: busybox
     command: top
     networks: ["front", "back"]
+    links:
+      - "db:database"
   db:
     image: busybox
     command: top
diff --git a/tests/fixtures/networks/external-default.yml b/tests/fixtures/networks/external-default.yml
new file mode 100644
index 00000000..5c9426b8
--- /dev/null
+++ b/tests/fixtures/networks/external-default.yml
@@ -0,0 +1,12 @@
+version: "2"
+services:
+  simple:
+    image: busybox:latest
+    command: top
+  another:
+    image: busybox:latest
+    command: top
+networks:
+  default:
+    external:
+      name: composetest_external_network
diff --git a/tests/fixtures/networks/external-networks.yml b/tests/fixtures/networks/external-networks.yml
index 644e3dda..db75b780 100644
--- a/tests/fixtures/networks/external-networks.yml
+++ b/tests/fixtures/networks/external-networks.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 
 services:
   web:
diff --git a/tests/fixtures/networks/missing-network.yml b/tests/fixtures/networks/missing-network.yml
index 666f7d34..41012535 100644
--- a/tests/fixtures/networks/missing-network.yml
+++ b/tests/fixtures/networks/missing-network.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 
 services:
   web:
diff --git a/tests/fixtures/networks/network-aliases.yml b/tests/fixtures/networks/network-aliases.yml
new file mode 100644
index 00000000..8cf7d5af
--- /dev/null
+++ b/tests/fixtures/networks/network-aliases.yml
@@ -0,0 +1,16 @@
+version: "2"
+
+services:
+  web:
+    image: busybox
+    command: top
+    networks:
+      front:
+        aliases:
+          - forward_facing
+          - ahead
+      back:
+
+networks:
+  front: {}
+  back: {}
diff --git a/tests/fixtures/networks/network-mode.yml b/tests/fixtures/networks/network-mode.yml
new file mode 100644
index 00000000..e4d070b4
--- /dev/null
+++ b/tests/fixtures/networks/network-mode.yml
@@ -0,0 +1,27 @@
+version: "2"
+
+services:
+  bridge:
+    image: busybox
+    command: top
+    network_mode: bridge
+
+  service:
+    image: busybox
+    command: top
+    network_mode: "service:bridge"
+
+  container:
+    image: busybox
+    command: top
+    network_mode: "container:composetest_network_mode_container"
+
+  host:
+    image: busybox
+    command: top
+    network_mode: host
+
+  none:
+    image: busybox
+    command: top
+    network_mode: none
diff --git a/tests/fixtures/networks/predefined-networks.yml b/tests/fixtures/networks/predefined-networks.yml
deleted file mode 100644
index d0fac377..00000000
--- a/tests/fixtures/networks/predefined-networks.yml
+++ /dev/null
@@ -1,17 +0,0 @@
-version: 2
-
-services:
-  bridge:
-    image: busybox
-    command: top
-    networks: ["bridge"]
-
-  host:
-    image: busybox
-    command: top
-    networks: ["host"]
-
-  none:
-    image: busybox
-    command: top
-    networks: []
diff --git a/tests/fixtures/no-services/docker-compose.yml b/tests/fixtures/no-services/docker-compose.yml
index fa498784..6e76ec0c 100644
--- a/tests/fixtures/no-services/docker-compose.yml
+++ b/tests/fixtures/no-services/docker-compose.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 
 networks:
   foo: {}
diff --git a/tests/fixtures/sleeps-composefile/docker-compose.yml b/tests/fixtures/sleeps-composefile/docker-compose.yml
new file mode 100644
index 00000000..7c8d84f8
--- /dev/null
+++ b/tests/fixtures/sleeps-composefile/docker-compose.yml
@@ -0,0 +1,10 @@
+
+version: "2"
+
+services:
+  simple:
+    image: busybox:latest
+    command: sleep 200
+  another:
+    image: busybox:latest
+    command: sleep 200
diff --git a/tests/fixtures/v2-dependencies/docker-compose.yml b/tests/fixtures/v2-dependencies/docker-compose.yml
new file mode 100644
index 00000000..2e14b94b
--- /dev/null
+++ b/tests/fixtures/v2-dependencies/docker-compose.yml
@@ -0,0 +1,13 @@
+version: "2.0"
+services:
+    db:
+      image: busybox:latest
+      command: top
+    web:
+      image: busybox:latest
+      command: top
+      depends_on:
+        - db
+    console:
+      image: busybox:latest
+      command: top
diff --git a/tests/fixtures/v2-full/docker-compose.yml b/tests/fixtures/v2-full/docker-compose.yml
index 725296c9..a973dd0c 100644
--- a/tests/fixtures/v2-full/docker-compose.yml
+++ b/tests/fixtures/v2-full/docker-compose.yml
@@ -1,5 +1,5 @@
 
-version: 2
+version: "2"
 
 volumes:
   data:
diff --git a/tests/fixtures/v2-simple/docker-compose.yml b/tests/fixtures/v2-simple/docker-compose.yml
index 12a9de72..c99ae02f 100644
--- a/tests/fixtures/v2-simple/docker-compose.yml
+++ b/tests/fixtures/v2-simple/docker-compose.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 services:
   simple:
     image: busybox:latest
diff --git a/tests/fixtures/v2-simple/links-invalid.yml b/tests/fixtures/v2-simple/links-invalid.yml
index 422f9314..481aa404 100644
--- a/tests/fixtures/v2-simple/links-invalid.yml
+++ b/tests/fixtures/v2-simple/links-invalid.yml
@@ -1,4 +1,4 @@
-version: 2
+version: "2"
 services:
   simple:
     image: busybox:latest
diff --git a/tests/integration/project_test.py b/tests/integration/project_test.py
index d29d9f1e..6542fa18 100644
--- a/tests/integration/project_test.py
+++ b/tests/integration/project_test.py
@@ -4,10 +4,13 @@ from __future__ import unicode_literals
 import random
 
 import py
+import pytest
 from docker.errors import NotFound
 
 from .testcases import DockerClientTestCase
 from compose.config import config
+from compose.config import ConfigurationError
+from compose.config.config import V2_0
 from compose.config.types import VolumeFromSpec
 from compose.config.types import VolumeSpec
 from compose.const import LABEL_PROJECT
@@ -104,7 +107,71 @@ class ProjectTest(DockerClientTestCase):
         db = project.get_service('db')
         self.assertEqual(db._get_volumes_from(), [data_container.id + ':rw'])
 
-    def test_net_from_service(self):
+    @v2_only()
+    def test_network_mode_from_service(self):
+        project = Project.from_config(
+            name='composetest',
+            client=self.client,
+            config_data=build_service_dicts({
+                'version': V2_0,
+                'services': {
+                    'net': {
+                        'image': 'busybox:latest',
+                        'command': ["top"]
+                    },
+                    'web': {
+                        'image': 'busybox:latest',
+                        'network_mode': 'service:net',
+                        'command': ["top"]
+                    },
+                },
+            }),
+        )
+
+        project.up()
+
+        web = project.get_service('web')
+        net = project.get_service('net')
+        self.assertEqual(web.network_mode.mode, 'container:' + net.containers()[0].id)
+
+    @v2_only()
+    def test_network_mode_from_container(self):
+        def get_project():
+            return Project.from_config(
+                name='composetest',
+                config_data=build_service_dicts({
+                    'version': V2_0,
+                    'services': {
+                        'web': {
+                            'image': 'busybox:latest',
+                            'network_mode': 'container:composetest_net_container'
+                        },
+                    },
+                }),
+                client=self.client,
+            )
+
+        with pytest.raises(ConfigurationError) as excinfo:
+            get_project()
+
+        assert "container 'composetest_net_container' which does not exist" in excinfo.exconly()
+
+        net_container = Container.create(
+            self.client,
+            image='busybox:latest',
+            name='composetest_net_container',
+            command='top',
+            labels={LABEL_PROJECT: 'composetest'},
+        )
+        net_container.start()
+
+        project = get_project()
+        project.up()
+
+        web = project.get_service('web')
+        self.assertEqual(web.network_mode.mode, 'container:' + net_container.id)
+
+    def test_net_from_service_v1(self):
         project = Project.from_config(
             name='composetest',
             config_data=build_service_dicts({
@@ -125,9 +192,26 @@ class ProjectTest(DockerClientTestCase):
 
         web = project.get_service('web')
         net = project.get_service('net')
-        self.assertEqual(web.net.mode, 'container:' + net.containers()[0].id)
+        self.assertEqual(web.network_mode.mode, 'container:' + net.containers()[0].id)
+
+    def test_net_from_container_v1(self):
+        def get_project():
+            return Project.from_config(
+                name='composetest',
+                config_data=build_service_dicts({
+                    'web': {
+                        'image': 'busybox:latest',
+                        'net': 'container:composetest_net_container'
+                    },
+                }),
+                client=self.client,
+            )
+
+        with pytest.raises(ConfigurationError) as excinfo:
+            get_project()
+
+        assert "container 'composetest_net_container' which does not exist" in excinfo.exconly()
 
-    def test_net_from_container(self):
         net_container = Container.create(
             self.client,
             image='busybox:latest',
@@ -137,21 +221,11 @@ class ProjectTest(DockerClientTestCase):
         )
         net_container.start()
 
-        project = Project.from_config(
-            name='composetest',
-            config_data=build_service_dicts({
-                'web': {
-                    'image': 'busybox:latest',
-                    'net': 'container:composetest_net_container'
-                },
-            }),
-            client=self.client,
-        )
-
+        project = get_project()
         project.up()
 
         web = project.get_service('web')
-        self.assertEqual(web.net.mode, 'container:' + net_container.id)
+        self.assertEqual(web.network_mode.mode, 'container:' + net_container.id)
 
     def test_start_pause_unpause_stop_kill_remove(self):
         web = self.create_service('web')
@@ -486,11 +560,12 @@ class ProjectTest(DockerClientTestCase):
     @v2_only()
     def test_project_up_networks(self):
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
                 'command': 'top',
+                'networks': {'foo': None, 'bar': None, 'baz': None},
             }],
             volumes={},
             networks={
@@ -516,12 +591,73 @@ class ProjectTest(DockerClientTestCase):
         foo_data = self.client.inspect_network('composetest_foo')
         self.assertEqual(foo_data['Driver'], 'bridge')
 
+    @v2_only()
+    def test_up_with_ipam_config(self):
+        config_data = config.Config(
+            version=V2_0,
+            services=[{
+                'name': 'web',
+                'image': 'busybox:latest',
+                'networks': {'front': None},
+            }],
+            volumes={},
+            networks={
+                'front': {
+                    'driver': 'bridge',
+                    'driver_opts': {
+                        "com.docker.network.bridge.enable_icc": "false",
+                    },
+                    'ipam': {
+                        'driver': 'default',
+                        'config': [{
+                            "subnet": "172.28.0.0/16",
+                            "ip_range": "172.28.5.0/24",
+                            "gateway": "172.28.5.254",
+                            "aux_addresses": {
+                                "a": "172.28.1.5",
+                                "b": "172.28.1.6",
+                                "c": "172.28.1.7",
+                            },
+                        }],
+                    },
+                },
+            },
+        )
+
+        project = Project.from_config(
+            client=self.client,
+            name='composetest',
+            config_data=config_data,
+        )
+        project.up()
+
+        network = self.client.networks(names=['composetest_front'])[0]
+
+        assert network['Options'] == {
+            "com.docker.network.bridge.enable_icc": "false"
+        }
+
+        assert network['IPAM'] == {
+            'Driver': 'default',
+            'Options': None,
+            'Config': [{
+                'Subnet': "172.28.0.0/16",
+                'IPRange': "172.28.5.0/24",
+                'Gateway': "172.28.5.254",
+                'AuxiliaryAddresses': {
+                    'a': '172.28.1.5',
+                    'b': '172.28.1.6',
+                    'c': '172.28.1.7',
+                },
+            }],
+        }
+
     @v2_only()
     def test_project_up_volumes(self):
         vol_name = '{0:x}'.format(random.getrandbits(32))
         full_vol_name = 'composetest_{0}'.format(vol_name)
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
@@ -547,7 +683,7 @@ class ProjectTest(DockerClientTestCase):
         base_file = config.ConfigFile(
             'base.yml',
             {
-                'version': 2,
+                'version': V2_0,
                 'services': {
                     'simple': {'image': 'busybox:latest', 'command': 'top'},
                     'another': {
@@ -566,7 +702,7 @@ class ProjectTest(DockerClientTestCase):
         override_file = config.ConfigFile(
             'override.yml',
             {
-                'version': 2,
+                'version': V2_0,
                 'services': {
                     'another': {
                         'logging': {
@@ -599,7 +735,7 @@ class ProjectTest(DockerClientTestCase):
         vol_name = '{0:x}'.format(random.getrandbits(32))
         full_vol_name = 'composetest_{0}'.format(vol_name)
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
@@ -613,7 +749,7 @@ class ProjectTest(DockerClientTestCase):
             name='composetest',
             config_data=config_data, client=self.client
         )
-        project.initialize_volumes()
+        project.volumes.initialize()
 
         volume_data = self.client.inspect_volume(full_vol_name)
         self.assertEqual(volume_data['Name'], full_vol_name)
@@ -624,7 +760,7 @@ class ProjectTest(DockerClientTestCase):
         vol_name = '{0:x}'.format(random.getrandbits(32))
         full_vol_name = 'composetest_{0}'.format(vol_name)
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
@@ -649,7 +785,7 @@ class ProjectTest(DockerClientTestCase):
         vol_name = '{0:x}'.format(random.getrandbits(32))
 
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
@@ -664,7 +800,7 @@ class ProjectTest(DockerClientTestCase):
             config_data=config_data, client=self.client
         )
         with self.assertRaises(config.ConfigurationError):
-            project.initialize_volumes()
+            project.volumes.initialize()
 
     @v2_only()
     def test_initialize_volumes_updated_driver(self):
@@ -672,7 +808,7 @@ class ProjectTest(DockerClientTestCase):
         full_vol_name = 'composetest_{0}'.format(vol_name)
 
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
@@ -685,7 +821,7 @@ class ProjectTest(DockerClientTestCase):
             name='composetest',
             config_data=config_data, client=self.client
         )
-        project.initialize_volumes()
+        project.volumes.initialize()
 
         volume_data = self.client.inspect_volume(full_vol_name)
         self.assertEqual(volume_data['Name'], full_vol_name)
@@ -696,10 +832,11 @@ class ProjectTest(DockerClientTestCase):
         )
         project = Project.from_config(
             name='composetest',
-            config_data=config_data, client=self.client
+            config_data=config_data,
+            client=self.client
         )
         with self.assertRaises(config.ConfigurationError) as e:
-            project.initialize_volumes()
+            project.volumes.initialize()
         assert 'Configuration for volume {0} specifies driver smb'.format(
             vol_name
         ) in str(e.exception)
@@ -711,7 +848,7 @@ class ProjectTest(DockerClientTestCase):
         full_vol_name = 'composetest_{0}'.format(vol_name)
         self.client.create_volume(vol_name)
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
@@ -726,7 +863,7 @@ class ProjectTest(DockerClientTestCase):
             name='composetest',
             config_data=config_data, client=self.client
         )
-        project.initialize_volumes()
+        project.volumes.initialize()
 
         with self.assertRaises(NotFound):
             self.client.inspect_volume(full_vol_name)
@@ -736,7 +873,7 @@ class ProjectTest(DockerClientTestCase):
         vol_name = '{0:x}'.format(random.getrandbits(32))
 
         config_data = config.Config(
-            version=2,
+            version=V2_0,
             services=[{
                 'name': 'web',
                 'image': 'busybox:latest',
@@ -752,7 +889,44 @@ class ProjectTest(DockerClientTestCase):
             config_data=config_data, client=self.client
         )
         with self.assertRaises(config.ConfigurationError) as e:
-            project.initialize_volumes()
+            project.volumes.initialize()
         assert 'Volume {0} declared as external'.format(
             vol_name
         ) in str(e.exception)
+
+    @v2_only()
+    def test_project_up_named_volumes_in_binds(self):
+        vol_name = '{0:x}'.format(random.getrandbits(32))
+        full_vol_name = 'composetest_{0}'.format(vol_name)
+
+        base_file = config.ConfigFile(
+            'base.yml',
+            {
+                'version': V2_0,
+                'services': {
+                    'simple': {
+                        'image': 'busybox:latest',
+                        'command': 'top',
+                        'volumes': ['{0}:/data'.format(vol_name)]
+                    },
+                },
+                'volumes': {
+                    vol_name: {'driver': 'local'}
+                }
+
+            })
+        config_details = config.ConfigDetails('.', [base_file])
+        config_data = config.load(config_details)
+        project = Project.from_config(
+            name='composetest', config_data=config_data, client=self.client
+        )
+        service = project.services[0]
+        self.assertEqual(service.name, 'simple')
+        volumes = service.options.get('volumes')
+        self.assertEqual(len(volumes), 1)
+        self.assertEqual(volumes[0].external, full_vol_name)
+        project.up()
+        engine_volumes = self.client.volumes()['Volumes']
+        container = service.get_container()
+        assert [mount['Name'] for mount in container.get('Mounts')] == [full_vol_name]
+        assert next((v for v in engine_volumes if v['Name'] == vol_name), None) is None
diff --git a/tests/integration/service_test.py b/tests/integration/service_test.py
index bce3999b..bbfcd8ec 100644
--- a/tests/integration/service_test.py
+++ b/tests/integration/service_test.py
@@ -7,7 +7,6 @@ import tempfile
 from os import path
 
 from docker.errors import APIError
-from pytest import mark
 from six import StringIO
 from six import text_type
 
@@ -27,7 +26,7 @@ from compose.const import LABEL_VERSION
 from compose.container import Container
 from compose.service import ConvergencePlan
 from compose.service import ConvergenceStrategy
-from compose.service import Net
+from compose.service import NetworkMode
 from compose.service import Service
 
 
@@ -267,6 +266,30 @@ class ServiceTest(DockerClientTestCase):
                           self.client.inspect_container,
                           old_container.id)
 
+    def test_execute_convergence_plan_recreate_twice(self):
+        service = self.create_service(
+            'db',
+            volumes=[VolumeSpec.parse('/etc')],
+            entrypoint=['top'],
+            command=['-d', '1'])
+
+        orig_container = service.create_container()
+        service.start_container(orig_container)
+
+        orig_container.inspect()  # reload volume data
+        volume_path = orig_container.get_mount('/etc')['Source']
+
+        # Do this twice to reproduce the bug
+        for _ in range(2):
+            new_container, = service.execute_convergence_plan(
+                ConvergencePlan('recreate', [orig_container]))
+
+            assert new_container.get_mount('/etc')['Source'] == volume_path
+            assert ('affinity:container==%s' % orig_container.id in
+                    new_container.get('Config.Env'))
+
+            orig_container = new_container
+
     def test_execute_convergence_plan_when_containers_are_stopped(self):
         service = self.create_service(
             'db',
@@ -344,6 +367,31 @@ class ServiceTest(DockerClientTestCase):
         )
         self.assertEqual(new_container.get_mount('/data')['Source'], volume_path)
 
+    def test_execute_convergence_plan_when_host_volume_is_removed(self):
+        host_path = '/tmp/host-path'
+        service = self.create_service(
+            'db',
+            build={'context': 'tests/fixtures/dockerfile-with-volume'},
+            volumes=[VolumeSpec(host_path, '/data', 'rw')])
+
+        old_container = create_and_start_container(service)
+        assert (
+            [mount['Destination'] for mount in old_container.get('Mounts')] ==
+            ['/data']
+        )
+        service.options['volumes'] = []
+
+        with mock.patch('compose.service.log', autospec=True) as mock_log:
+            new_container, = service.execute_convergence_plan(
+                ConvergencePlan('recreate', [old_container]))
+
+        assert not mock_log.warn.called
+        assert (
+            [mount['Destination'] for mount in new_container.get('Mounts')],
+            ['/data']
+        )
+        assert new_container.get_mount('/data')['Source'] != host_path
+
     def test_execute_convergence_plan_without_start(self):
         service = self.create_service(
             'db',
@@ -372,7 +420,6 @@ class ServiceTest(DockerClientTestCase):
         create_and_start_container(db)
         self.assertEqual(db.containers()[0].environment['FOO'], 'BAR')
 
-    @mark.skipif(True, reason="Engine returns error - needs investigating")
     def test_start_container_creates_links(self):
         db = self.create_service('db')
         web = self.create_service('web', links=[(db, None)])
@@ -389,7 +436,6 @@ class ServiceTest(DockerClientTestCase):
                 'db'])
         )
 
-    @mark.skipif(True, reason="Engine returns error - needs investigating")
     def test_start_container_creates_links_with_names(self):
         db = self.create_service('db')
         web = self.create_service('web', links=[(db, 'custom_link_name')])
@@ -433,7 +479,6 @@ class ServiceTest(DockerClientTestCase):
         c = create_and_start_container(db)
         self.assertEqual(set(get_links(c)), set([]))
 
-    @mark.skipif(True, reason="Engine returns error - needs investigating")
     def test_start_one_off_container_creates_links_to_its_own_service(self):
         db = self.create_service('db')
 
@@ -750,18 +795,23 @@ class ServiceTest(DockerClientTestCase):
         for container in containers:
             self.assertEqual(list(container.inspect()['HostConfig']['PortBindings'].keys()), ['8000/tcp'])
 
+    def test_scale_with_immediate_exit(self):
+        service = self.create_service('web', image='busybox', command='true')
+        service.scale(2)
+        assert len(service.containers(stopped=True)) == 2
+
     def test_network_mode_none(self):
-        service = self.create_service('web', net=Net('none'))
+        service = self.create_service('web', network_mode=NetworkMode('none'))
         container = create_and_start_container(service)
         self.assertEqual(container.get('HostConfig.NetworkMode'), 'none')
 
     def test_network_mode_bridged(self):
-        service = self.create_service('web', net=Net('bridge'))
+        service = self.create_service('web', network_mode=NetworkMode('bridge'))
         container = create_and_start_container(service)
         self.assertEqual(container.get('HostConfig.NetworkMode'), 'bridge')
 
     def test_network_mode_host(self):
-        service = self.create_service('web', net=Net('host'))
+        service = self.create_service('web', network_mode=NetworkMode('host'))
         container = create_and_start_container(service)
         self.assertEqual(container.get('HostConfig.NetworkMode'), 'host')
 
@@ -859,7 +909,7 @@ class ServiceTest(DockerClientTestCase):
             'FILE_DEF': 'F1',
             'FILE_DEF_EMPTY': '',
             'ENV_DEF': 'E3',
-            'NO_DEF': ''
+            'NO_DEF': None
         }.items():
             self.assertEqual(env[k], v)
 
diff --git a/tests/integration/testcases.py b/tests/integration/testcases.py
index 5870946d..8e2f2593 100644
--- a/tests/integration/testcases.py
+++ b/tests/integration/testcases.py
@@ -10,6 +10,8 @@ from pytest import skip
 from .. import unittest
 from compose.cli.docker_client import docker_client
 from compose.config.config import resolve_environment
+from compose.config.config import V1
+from compose.config.config import V2_0
 from compose.const import API_VERSIONS
 from compose.const import LABEL_PROJECT
 from compose.progress_stream import stream_output
@@ -54,9 +56,9 @@ class DockerClientTestCase(unittest.TestCase):
     @classmethod
     def setUpClass(cls):
         if engine_version_too_low_for_v2():
-            version = API_VERSIONS[1]
+            version = API_VERSIONS[V1]
         else:
-            version = API_VERSIONS[2]
+            version = API_VERSIONS[V2_0]
 
         cls.client = docker_client(version)
 
diff --git a/tests/unit/cli/main_test.py b/tests/unit/cli/main_test.py
index 6f5dd3ca..fd6c5002 100644
--- a/tests/unit/cli/main_test.py
+++ b/tests/unit/cli/main_test.py
@@ -6,12 +6,9 @@ import logging
 from compose import container
 from compose.cli.errors import UserError
 from compose.cli.formatter import ConsoleWarningFormatter
-from compose.cli.log_printer import LogPrinter
-from compose.cli.main import attach_to_logs
 from compose.cli.main import build_log_printer
 from compose.cli.main import convergence_strategy_from_opts
 from compose.cli.main import setup_console_handler
-from compose.project import Project
 from compose.service import ConvergenceStrategy
 from tests import mock
 from tests import unittest
@@ -49,21 +46,6 @@ class CLIMainTestCase(unittest.TestCase):
         log_printer = build_log_printer(containers, service_names, True, False)
         self.assertEqual(log_printer.containers, containers)
 
-    def test_attach_to_logs(self):
-        project = mock.create_autospec(Project)
-        log_printer = mock.create_autospec(LogPrinter, containers=[])
-        service_names = ['web', 'db']
-        timeout = 12
-
-        with mock.patch('compose.cli.main.signals.signal', autospec=True) as mock_signal:
-            attach_to_logs(project, log_printer, service_names, timeout)
-
-        assert mock_signal.signal.mock_calls == [
-            mock.call(mock_signal.SIGINT, mock.ANY),
-            mock.call(mock_signal.SIGTERM, mock.ANY),
-        ]
-        log_printer.run.assert_called_once_with()
-
 
 class SetupConsoleHandlerTestCase(unittest.TestCase):
 
diff --git a/tests/unit/cli_test.py b/tests/unit/cli_test.py
index a5767097..26ae4e30 100644
--- a/tests/unit/cli_test.py
+++ b/tests/unit/cli_test.py
@@ -49,6 +49,13 @@ class CLITestCase(unittest.TestCase):
             project_name = get_project_name(None)
         self.assertEquals(project_name, name)
 
+    def test_project_name_with_empty_environment_var(self):
+        base_dir = 'tests/fixtures/simple-composefile'
+        with mock.patch.dict(os.environ):
+            os.environ['COMPOSE_PROJECT_NAME'] = ''
+            project_name = get_project_name(base_dir)
+        self.assertEquals('simplecomposefile', project_name)
+
     def test_get_project(self):
         base_dir = 'tests/fixtures/longer-filename-composefile'
         project = get_project(base_dir)
@@ -72,8 +79,40 @@ class CLITestCase(unittest.TestCase):
             TopLevelCommand().dispatch(['help', 'nonexistent'], None)
 
     @pytest.mark.xfail(IS_WINDOWS_PLATFORM, reason="requires dockerpty")
-    @mock.patch('compose.cli.main.dockerpty', autospec=True)
-    def test_run_with_environment_merged_with_options_list(self, mock_dockerpty):
+    @mock.patch('compose.cli.main.RunOperation', autospec=True)
+    @mock.patch('compose.cli.main.PseudoTerminal', autospec=True)
+    def test_run_interactive_passes_logs_false(self, mock_pseudo_terminal, mock_run_operation):
+        command = TopLevelCommand()
+        mock_client = mock.create_autospec(docker.Client)
+        mock_project = mock.Mock(client=mock_client)
+        mock_project.get_service.return_value = Service(
+            'service',
+            client=mock_client,
+            environment=['FOO=ONE', 'BAR=TWO'],
+            image='someimage')
+
+        with pytest.raises(SystemExit):
+            command.run(mock_project, {
+                'SERVICE': 'service',
+                'COMMAND': None,
+                '-e': ['BAR=NEW', 'OTHER=bär'.encode('utf-8')],
+                '--user': None,
+                '--no-deps': None,
+                '-d': False,
+                '-T': None,
+                '--entrypoint': None,
+                '--service-ports': None,
+                '--publish': [],
+                '--rm': None,
+                '--name': None,
+            })
+
+        _, _, call_kwargs = mock_run_operation.mock_calls[0]
+        assert call_kwargs['logs'] is False
+
+    @pytest.mark.xfail(IS_WINDOWS_PLATFORM, reason="requires dockerpty")
+    @mock.patch('compose.cli.main.PseudoTerminal', autospec=True)
+    def test_run_with_environment_merged_with_options_list(self, mock_pseudo_terminal):
         command = TopLevelCommand()
         mock_client = mock.create_autospec(docker.Client)
         mock_project = mock.Mock(client=mock_client)
@@ -99,9 +138,10 @@ class CLITestCase(unittest.TestCase):
         })
 
         _, _, call_kwargs = mock_client.create_container.mock_calls[0]
-        self.assertEqual(
-            call_kwargs['environment'],
-            {'FOO': 'ONE', 'BAR': 'NEW', 'OTHER': u'bär'})
+        assert (
+            sorted(call_kwargs['environment']) ==
+            sorted(['FOO=ONE', 'BAR=NEW', 'OTHER=bär'])
+        )
 
     def test_run_service_with_restart_always(self):
         command = TopLevelCommand()
diff --git a/tests/unit/config/config_test.py b/tests/unit/config/config_test.py
index e24dc904..11bc7f0b 100644
--- a/tests/unit/config/config_test.py
+++ b/tests/unit/config/config_test.py
@@ -14,25 +14,28 @@ import pytest
 from compose.config import config
 from compose.config.config import resolve_build_args
 from compose.config.config import resolve_environment
+from compose.config.config import V1
+from compose.config.config import V2_0
 from compose.config.errors import ConfigurationError
+from compose.config.errors import VERSION_EXPLANATION
 from compose.config.types import VolumeSpec
 from compose.const import IS_WINDOWS_PLATFORM
 from tests import mock
 from tests import unittest
 
-DEFAULT_VERSION = V2 = 2
-V1 = 1
+DEFAULT_VERSION = V2_0
 
 
 def make_service_dict(name, service_dict, working_dir, filename=None):
+    """Test helper function to construct a ServiceExtendsResolver
     """
-    Test helper function to construct a ServiceExtendsResolver
-    """
-    resolver = config.ServiceExtendsResolver(config.ServiceConfig(
-        working_dir=working_dir,
-        filename=filename,
-        name=name,
-        config=service_dict), version=1)
+    resolver = config.ServiceExtendsResolver(
+        config.ServiceConfig(
+            working_dir=working_dir,
+            filename=filename,
+            name=name,
+            config=service_dict),
+        config.ConfigFile(filename=filename, config={}))
     return config.process_service(resolver.run())
 
 
@@ -77,7 +80,7 @@ class ConfigTest(unittest.TestCase):
     def test_load_v2(self):
         config_data = config.load(
             build_config_details({
-                'version': 2,
+                'version': '2',
                 'services': {
                     'foo': {'image': 'busybox'},
                     'bar': {'image': 'busybox', 'environment': ['FOO=1']},
@@ -87,11 +90,26 @@ class ConfigTest(unittest.TestCase):
                         'driver': 'default',
                         'driver_opts': {'beep': 'boop'}
                     }
+                },
+                'networks': {
+                    'default': {
+                        'driver': 'bridge',
+                        'driver_opts': {'beep': 'boop'}
+                    },
+                    'with_ipam': {
+                        'ipam': {
+                            'driver': 'default',
+                            'config': [
+                                {'subnet': '172.28.0.0/16'}
+                            ]
+                        }
+                    }
                 }
             }, 'working_dir', 'filename.yml')
         )
         service_dicts = config_data.services
         volume_dict = config_data.volumes
+        networks_dict = config_data.networks
         self.assertEqual(
             service_sort(service_dicts),
             service_sort([
@@ -112,10 +130,93 @@ class ConfigTest(unittest.TestCase):
                 'driver_opts': {'beep': 'boop'}
             }
         })
+        self.assertEqual(networks_dict, {
+            'default': {
+                'driver': 'bridge',
+                'driver_opts': {'beep': 'boop'}
+            },
+            'with_ipam': {
+                'ipam': {
+                    'driver': 'default',
+                    'config': [
+                        {'subnet': '172.28.0.0/16'}
+                    ]
+                }
+            }
+        })
+
+    def test_valid_versions(self):
+        for version in ['2', '2.0']:
+            cfg = config.load(build_config_details({'version': version}))
+            assert cfg.version == V2_0
+
+    def test_v1_file_version(self):
+        cfg = config.load(build_config_details({'web': {'image': 'busybox'}}))
+        assert cfg.version == V1
+        assert list(s['name'] for s in cfg.services) == ['web']
+
+        cfg = config.load(build_config_details({'version': {'image': 'busybox'}}))
+        assert cfg.version == V1
+        assert list(s['name'] for s in cfg.services) == ['version']
+
+    def test_wrong_version_type(self):
+        for version in [None, 1, 2, 2.0]:
+            with pytest.raises(ConfigurationError) as excinfo:
+                config.load(
+                    build_config_details(
+                        {'version': version},
+                        filename='filename.yml',
+                    )
+                )
+
+            assert 'Version in "filename.yml" is invalid - it should be a string.' \
+                in excinfo.exconly()
+
+    def test_unsupported_version(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            config.load(
+                build_config_details(
+                    {'version': '2.1'},
+                    filename='filename.yml',
+                )
+            )
+
+        assert 'Version in "filename.yml" is unsupported' in excinfo.exconly()
+        assert VERSION_EXPLANATION in excinfo.exconly()
+
+    def test_version_1_is_invalid(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            config.load(
+                build_config_details(
+                    {
+                        'version': '1',
+                        'web': {'image': 'busybox'},
+                    },
+                    filename='filename.yml',
+                )
+            )
+
+        assert 'Version in "filename.yml" is invalid' in excinfo.exconly()
+        assert VERSION_EXPLANATION in excinfo.exconly()
+
+    def test_v1_file_with_version_is_invalid(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            config.load(
+                build_config_details(
+                    {
+                        'version': '2',
+                        'web': {'image': 'busybox'},
+                    },
+                    filename='filename.yml',
+                )
+            )
+
+        assert 'Additional properties are not allowed' in excinfo.exconly()
+        assert VERSION_EXPLANATION in excinfo.exconly()
 
     def test_named_volume_config_empty(self):
         config_details = build_config_details({
-            'version': 2,
+            'version': '2',
             'services': {
                 'simple': {'image': 'busybox'}
             },
@@ -130,14 +231,70 @@ class ConfigTest(unittest.TestCase):
         assert volumes['simple'] == {}
         assert volumes['other'] == {}
 
+    def test_named_volume_numeric_driver_opt(self):
+        config_details = build_config_details({
+            'version': '2',
+            'services': {
+                'simple': {'image': 'busybox'}
+            },
+            'volumes': {
+                'simple': {'driver_opts': {'size': 42}},
+            }
+        })
+        cfg = config.load(config_details)
+        assert cfg.volumes['simple']['driver_opts']['size'] == '42'
+
+    def test_volume_invalid_driver_opt(self):
+        config_details = build_config_details({
+            'version': '2',
+            'services': {
+                'simple': {'image': 'busybox'}
+            },
+            'volumes': {
+                'simple': {'driver_opts': {'size': True}},
+            }
+        })
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        assert 'driver_opts.size contains an invalid type' in exc.exconly()
+
+    def test_named_volume_invalid_type_list(self):
+        config_details = build_config_details({
+            'version': '2',
+            'services': {
+                'simple': {'image': 'busybox'}
+            },
+            'volumes': []
+        })
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        assert "volume must be a mapping, not an array" in exc.exconly()
+
+    def test_networks_invalid_type_list(self):
+        config_details = build_config_details({
+            'version': '2',
+            'services': {
+                'simple': {'image': 'busybox'}
+            },
+            'networks': []
+        })
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        assert "network must be a mapping, not an array" in exc.exconly()
+
     def test_load_service_with_name_version(self):
-        config_data = config.load(
-            build_config_details({
-                'version': {
-                    'image': 'busybox'
-                }
-            }, 'working_dir', 'filename.yml')
-        )
+        with mock.patch('compose.config.config.log') as mock_logging:
+            config_data = config.load(
+                build_config_details({
+                    'version': {
+                        'image': 'busybox'
+                    }
+                }, 'working_dir', 'filename.yml')
+            )
+
+        assert 'Unexpected type for "version" key in "filename.yml"' \
+            in mock_logging.warn.call_args[0][0]
+
         service_dicts = config_data.services
         self.assertEqual(
             service_sort(service_dicts),
@@ -149,27 +306,6 @@ class ConfigTest(unittest.TestCase):
             ])
         )
 
-    def test_load_invalid_version(self):
-        with self.assertRaises(ConfigurationError):
-            config.load(
-                build_config_details({
-                    'version': 18,
-                    'services': {
-                        'foo': {'image': 'busybox'}
-                    }
-                }, 'working_dir', 'filename.yml')
-            )
-
-        with self.assertRaises(ConfigurationError):
-            config.load(
-                build_config_details({
-                    'version': 'two point oh',
-                    'services': {
-                        'foo': {'image': 'busybox'}
-                    }
-                }, 'working_dir', 'filename.yml')
-            )
-
     def test_load_throws_error_when_not_dict(self):
         with self.assertRaises(ConfigurationError):
             config.load(
@@ -184,12 +320,24 @@ class ConfigTest(unittest.TestCase):
         with self.assertRaises(ConfigurationError):
             config.load(
                 build_config_details(
-                    {'version': 2, 'services': {'web': 'busybox:latest'}},
+                    {'version': '2', 'services': {'web': 'busybox:latest'}},
                     'working_dir',
                     'filename.yml'
                 )
             )
 
+    def test_load_throws_error_with_invalid_network_fields(self):
+        with self.assertRaises(ConfigurationError):
+            config.load(
+                build_config_details({
+                    'version': '2',
+                    'services': {'web': 'busybox:latest'},
+                    'networks': {
+                        'invalid': {'foo', 'bar'}
+                    }
+                }, 'working_dir', 'filename.yml')
+            )
+
     def test_load_config_invalid_service_names(self):
         for invalid_name in ['?not?allowed', ' ', '', '!', '/', '\xe2']:
             with pytest.raises(ConfigurationError) as exc:
@@ -204,22 +352,38 @@ class ConfigTest(unittest.TestCase):
             with pytest.raises(ConfigurationError) as exc:
                 config.load(
                     build_config_details({
-                        'version': 2,
+                        'version': '2',
                         'services': {invalid_name: {'image': 'busybox'}}
                     }, 'working_dir', 'filename.yml')
                 )
             assert 'Invalid service name \'%s\'' % invalid_name in exc.exconly()
 
     def test_load_with_invalid_field_name(self):
-        config_details = build_config_details(
-            {'web': {'image': 'busybox', 'name': 'bogus'}},
-            'working_dir',
-            'filename.yml')
         with pytest.raises(ConfigurationError) as exc:
-            config.load(config_details)
-        error_msg = "Unsupported config option for 'web' service: 'name'"
-        assert error_msg in exc.exconly()
-        assert "Validation failed in file 'filename.yml'" in exc.exconly()
+            config.load(build_config_details(
+                {
+                    'version': '2',
+                    'services': {
+                        'web': {'image': 'busybox', 'name': 'bogus'},
+                    }
+                },
+                'working_dir',
+                'filename.yml',
+            ))
+
+        assert "Unsupported config option for services.web: 'name'" in exc.exconly()
+
+    def test_load_with_invalid_field_name_v1(self):
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(build_config_details(
+                {
+                    'web': {'image': 'busybox', 'name': 'bogus'},
+                },
+                'working_dir',
+                'filename.yml',
+            ))
+
+        assert "Unsupported config option for web: 'name'" in exc.exconly()
 
     def test_load_invalid_service_definition(self):
         config_details = build_config_details(
@@ -228,13 +392,31 @@ class ConfigTest(unittest.TestCase):
             'filename.yml')
         with pytest.raises(ConfigurationError) as exc:
             config.load(config_details)
-        error_msg = "service 'web' doesn't have any configuration options"
-        assert error_msg in exc.exconly()
+        assert "service 'web' must be a mapping not a string." in exc.exconly()
+
+    def test_load_with_empty_build_args(self):
+        config_details = build_config_details(
+            {
+                'version': '2',
+                'services': {
+                    'web': {
+                        'build': {
+                            'context': '.',
+                            'args': None,
+                        },
+                    },
+                },
+            }
+        )
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        assert (
+            "services.web.build.args contains an invalid type, it should be an "
+            "array, or an object" in exc.exconly()
+        )
 
     def test_config_integer_service_name_raise_validation_error(self):
-        expected_error_msg = ("In file 'filename.yml' service name: 1 needs to "
-                              "be a string, eg '1'")
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {1: {'image': 'busybox'}},
@@ -243,15 +425,17 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
-    def test_config_integer_service_name_raise_validation_error_v2(self):
-        expected_error_msg = ("In file 'filename.yml' service name: 1 needs to "
-                              "be a string, eg '1'")
+        assert (
+            "In file 'filename.yml', the service name 1 must be a quoted string, i.e. '1'" in
+            excinfo.exconly()
+        )
 
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+    def test_config_integer_service_name_raise_validation_error_v2(self):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
-                        'version': 2,
+                        'version': '2',
                         'services': {1: {'image': 'busybox'}}
                     },
                     'working_dir',
@@ -259,6 +443,11 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
+        assert (
+            "In file 'filename.yml', the service name 1 must be a quoted string, i.e. '1'." in
+            excinfo.exconly()
+        )
+
     def test_load_with_multiple_files_v1(self):
         base_file = config.ConfigFile(
             'base.yaml',
@@ -311,7 +500,7 @@ class ConfigTest(unittest.TestCase):
     def test_load_with_multiple_files_and_empty_override_v2(self):
         base_file = config.ConfigFile(
             'base.yml',
-            {'version': 2, 'services': {'web': {'image': 'example/web'}}})
+            {'version': '2', 'services': {'web': {'image': 'example/web'}}})
         override_file = config.ConfigFile('override.yml', None)
         details = config.ConfigDetails('.', [base_file, override_file])
 
@@ -335,7 +524,7 @@ class ConfigTest(unittest.TestCase):
         base_file = config.ConfigFile('base.yml', None)
         override_file = config.ConfigFile(
             'override.tml',
-            {'version': 2, 'services': {'web': {'image': 'example/web'}}}
+            {'version': '2', 'services': {'web': {'image': 'example/web'}}}
         )
         details = config.ConfigDetails('.', [base_file, override_file])
         with pytest.raises(ConfigurationError) as exc:
@@ -391,7 +580,7 @@ class ConfigTest(unittest.TestCase):
 
         with pytest.raises(ConfigurationError) as exc:
             config.load(details)
-        assert "service 'bogus' doesn't have any configuration" in exc.exconly()
+        assert "service 'bogus' must be a mapping not a string." in exc.exconly()
         assert "In file 'override.yaml'" in exc.exconly()
 
     def test_load_sorts_in_dependency_order(self):
@@ -435,7 +624,7 @@ class ConfigTest(unittest.TestCase):
             config.load(
                 build_config_details(
                     {
-                        'version': 2,
+                        'version': '2',
                         'services': {
                             'web': {
                                 'build': '.',
@@ -450,7 +639,7 @@ class ConfigTest(unittest.TestCase):
 
         service = config.load(
             build_config_details({
-                'version': 2,
+                'version': '2',
                 'services': {
                     'web': {
                         'build': '.'
@@ -463,7 +652,7 @@ class ConfigTest(unittest.TestCase):
         service = config.load(
             build_config_details(
                 {
-                    'version': 2,
+                    'version': '2',
                     'services': {
                         'web': {
                             'build': {
@@ -480,14 +669,79 @@ class ConfigTest(unittest.TestCase):
         self.assertTrue('context' in service[0]['build'])
         self.assertEqual(service[0]['build']['dockerfile'], 'Dockerfile-alt')
 
+    def test_load_with_buildargs(self):
+        service = config.load(
+            build_config_details(
+                {
+                    'version': '2',
+                    'services': {
+                        'web': {
+                            'build': {
+                                'context': '.',
+                                'dockerfile': 'Dockerfile-alt',
+                                'args': {
+                                    'opt1': 42,
+                                    'opt2': 'foobar'
+                                }
+                            }
+                        }
+                    }
+                },
+                'tests/fixtures/extends',
+                'filename.yml'
+            )
+        ).services[0]
+        assert 'args' in service['build']
+        assert 'opt1' in service['build']['args']
+        assert isinstance(service['build']['args']['opt1'], str)
+        assert service['build']['args']['opt1'] == '42'
+        assert service['build']['args']['opt2'] == 'foobar'
+
+    def test_load_with_multiple_files_mismatched_networks_format(self):
+        base_file = config.ConfigFile(
+            'base.yaml',
+            {
+                'version': '2',
+                'services': {
+                    'web': {
+                        'image': 'example/web',
+                        'networks': {
+                            'foobar': {'aliases': ['foo', 'bar']}
+                        }
+                    }
+                },
+                'networks': {'foobar': {}, 'baz': {}}
+            }
+        )
+
+        override_file = config.ConfigFile(
+            'override.yaml',
+            {
+                'version': '2',
+                'services': {
+                    'web': {
+                        'networks': ['baz']
+                    }
+                }
+            }
+        )
+
+        details = config.ConfigDetails('.', [base_file, override_file])
+        web_service = config.load(details).services[0]
+        assert web_service['networks'] == {
+            'foobar': {'aliases': ['foo', 'bar']},
+            'baz': None
+        }
+
     def test_load_with_multiple_files_v2(self):
         base_file = config.ConfigFile(
             'base.yaml',
             {
-                'version': 2,
+                'version': '2',
                 'services': {
                     'web': {
                         'image': 'example/web',
+                        'depends_on': ['db'],
                     },
                     'db': {
                         'image': 'example/db',
@@ -497,12 +751,16 @@ class ConfigTest(unittest.TestCase):
         override_file = config.ConfigFile(
             'override.yaml',
             {
-                'version': 2,
+                'version': '2',
                 'services': {
                     'web': {
                         'build': '/',
                         'volumes': ['/home/user/project:/code'],
+                        'depends_on': ['other'],
                     },
+                    'other': {
+                        'image': 'example/other',
+                    }
                 }
             })
         details = config.ConfigDetails('.', [base_file, override_file])
@@ -514,14 +772,69 @@ class ConfigTest(unittest.TestCase):
                 'build': {'context': os.path.abspath('/')},
                 'image': 'example/web',
                 'volumes': [VolumeSpec.parse('/home/user/project:/code')],
+                'depends_on': ['db', 'other'],
             },
             {
                 'name': 'db',
                 'image': 'example/db',
             },
+            {
+                'name': 'other',
+                'image': 'example/other',
+            },
         ]
         assert service_sort(service_dicts) == service_sort(expected)
 
+    def test_undeclared_volume_v2(self):
+        base_file = config.ConfigFile(
+            'base.yaml',
+            {
+                'version': '2',
+                'services': {
+                    'web': {
+                        'image': 'busybox:latest',
+                        'volumes': ['data0028:/data:ro'],
+                    },
+                },
+            }
+        )
+        details = config.ConfigDetails('.', [base_file])
+        with self.assertRaises(ConfigurationError):
+            config.load(details)
+
+        base_file = config.ConfigFile(
+            'base.yaml',
+            {
+                'version': '2',
+                'services': {
+                    'web': {
+                        'image': 'busybox:latest',
+                        'volumes': ['./data0028:/data:ro'],
+                    },
+                },
+            }
+        )
+        details = config.ConfigDetails('.', [base_file])
+        config_data = config.load(details)
+        volume = config_data.services[0].get('volumes')[0]
+        assert not volume.is_named_volume
+
+    def test_undeclared_volume_v1(self):
+        base_file = config.ConfigFile(
+            'base.yaml',
+            {
+                'web': {
+                    'image': 'busybox:latest',
+                    'volumes': ['data0028:/data:ro'],
+                },
+            }
+        )
+        details = config.ConfigDetails('.', [base_file])
+        config_data = config.load(details)
+        volume = config_data.services[0].get('volumes')[0]
+        assert volume.external == 'data0028'
+        assert volume.is_named_volume
+
     def test_config_valid_service_names(self):
         for valid_name in ['_', '-', '.__.', '_what-up.', 'what_.up----', 'whatup']:
             services = config.load(
@@ -532,8 +845,7 @@ class ConfigTest(unittest.TestCase):
             assert services[0]['name'] == valid_name
 
     def test_config_hint(self):
-        expected_error_msg = "(did you mean 'privileged'?)"
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -544,6 +856,8 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
+        assert "(did you mean 'privileged'?)" in excinfo.exconly()
+
     def test_load_errors_on_uppercase_with_no_image(self):
         with pytest.raises(ConfigurationError) as exc:
             config.load(build_config_details({
@@ -551,9 +865,41 @@ class ConfigTest(unittest.TestCase):
             }, 'tests/fixtures/build-ctx'))
             assert "Service 'Foo' contains uppercase characters" in exc.exconly()
 
-    def test_invalid_config_build_and_image_specified(self):
-        expected_error_msg = "Service 'foo' has both an image and build path specified."
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+    def test_invalid_config_v1(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            config.load(
+                build_config_details(
+                    {
+                        'foo': {'image': 1},
+                    },
+                    'tests/fixtures/extends',
+                    'filename.yml'
+                )
+            )
+
+        assert "foo.image contains an invalid type, it should be a string" \
+            in excinfo.exconly()
+
+    def test_invalid_config_v2(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            config.load(
+                build_config_details(
+                    {
+                        'version': '2',
+                        'services': {
+                            'foo': {'image': 1},
+                        },
+                    },
+                    'tests/fixtures/extends',
+                    'filename.yml'
+                )
+            )
+
+        assert "services.foo.image contains an invalid type, it should be a string" \
+            in excinfo.exconly()
+
+    def test_invalid_config_build_and_image_specified_v1(self):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -564,9 +910,10 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
+        assert "foo has both an image and build path specified." in excinfo.exconly()
+
     def test_invalid_config_type_should_be_an_array(self):
-        expected_error_msg = "Service 'foo' configuration key 'links' contains an invalid type, it should be an array"
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -577,10 +924,11 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
+        assert "foo.links contains an invalid type, it should be an array" \
+            in excinfo.exconly()
+
     def test_invalid_config_not_a_dictionary(self):
-        expected_error_msg = ("Top level object in 'filename.yml' needs to be "
-                              "an object.")
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     ['foo', 'lol'],
@@ -589,9 +937,11 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
+        assert "Top level object in 'filename.yml' needs to be an object" \
+            in excinfo.exconly()
+
     def test_invalid_config_not_unique_items(self):
-        expected_error_msg = "has non-unique elements"
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -602,10 +952,10 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
+        assert "has non-unique elements" in excinfo.exconly()
+
     def test_invalid_list_of_strings_format(self):
-        expected_error_msg = "Service 'web' configuration key 'command' contains 1"
-        expected_error_msg += ", which is an invalid type, it should be a string"
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -616,7 +966,10 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
-    def test_load_config_dockerfile_without_build_raises_error(self):
+        assert "web.command contains 1, which is an invalid type, it should be a string" \
+            in excinfo.exconly()
+
+    def test_load_config_dockerfile_without_build_raises_error_v1(self):
         with pytest.raises(ConfigurationError) as exc:
             config.load(build_config_details({
                 'web': {
@@ -624,12 +977,11 @@ class ConfigTest(unittest.TestCase):
                     'dockerfile': 'Dockerfile.alt'
                 }
             }))
-        assert "Service 'web' has both an image and alternate Dockerfile." in exc.exconly()
+
+        assert "web has both an image and alternate Dockerfile." in exc.exconly()
 
     def test_config_extra_hosts_string_raises_validation_error(self):
-        expected_error_msg = "Service 'web' configuration key 'extra_hosts' contains an invalid type"
-
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {'web': {
@@ -641,12 +993,11 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
-    def test_config_extra_hosts_list_of_dicts_validation_error(self):
-        expected_error_msg = (
-            "key 'extra_hosts' contains {\"somehost\": \"162.242.195.82\"}, "
-            "which is an invalid type, it should be a string")
+        assert "web.extra_hosts contains an invalid type" \
+            in excinfo.exconly()
 
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+    def test_config_extra_hosts_list_of_dicts_validation_error(self):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {'web': {
@@ -661,10 +1012,11 @@ class ConfigTest(unittest.TestCase):
                 )
             )
 
-    def test_config_ulimits_invalid_keys_validation_error(self):
-        expected = ("Service 'web' configuration key 'ulimits' 'nofile' contains "
-                    "unsupported option: 'not_soft_or_hard'")
+        assert "web.extra_hosts contains {\"somehost\": \"162.242.195.82\"}, " \
+               "which is an invalid type, it should be a string" \
+            in excinfo.exconly()
 
+    def test_config_ulimits_invalid_keys_validation_error(self):
         with pytest.raises(ConfigurationError) as exc:
             config.load(build_config_details(
                 {
@@ -681,10 +1033,11 @@ class ConfigTest(unittest.TestCase):
                 },
                 'working_dir',
                 'filename.yml'))
-        assert expected in exc.exconly()
+
+        assert "web.ulimits.nofile contains unsupported option: 'not_soft_or_hard'" \
+            in exc.exconly()
 
     def test_config_ulimits_required_keys_validation_error(self):
-
         with pytest.raises(ConfigurationError) as exc:
             config.load(build_config_details(
                 {
@@ -695,11 +1048,11 @@ class ConfigTest(unittest.TestCase):
                 },
                 'working_dir',
                 'filename.yml'))
-        assert "Service 'web' configuration key 'ulimits' 'nofile'" in exc.exconly()
+        assert "web.ulimits.nofile" in exc.exconly()
         assert "'hard' is a required property" in exc.exconly()
 
     def test_config_ulimits_soft_greater_than_hard_error(self):
-        expected = "cannot contain a 'soft' value higher than 'hard' value"
+        expected = "'soft' value can not be greater than 'hard' value"
 
         with pytest.raises(ConfigurationError) as exc:
             config.load(build_config_details(
@@ -747,7 +1100,7 @@ class ConfigTest(unittest.TestCase):
 
     @mock.patch('compose.config.validation.log')
     def test_logs_warning_for_boolean_in_environment(self, mock_logging):
-        expected_warning_msg = "There is a boolean value in the 'environment' key."
+        expected_warning_msg = "There is a boolean value in the 'environment'"
         config.load(
             build_config_details(
                 {'web': {
@@ -796,7 +1149,7 @@ class ConfigTest(unittest.TestCase):
                     'extra_hosts': "www.example.com: 192.168.0.17",
                 }
             }))
-        assert "'extra_hosts' contains an invalid type" in exc.exconly()
+        assert "web.extra_hosts contains an invalid type" in exc.exconly()
 
     def test_validate_extra_hosts_invalid_list(self):
         with pytest.raises(ConfigurationError) as exc:
@@ -865,9 +1218,42 @@ class ConfigTest(unittest.TestCase):
             'extends': {'service': 'foo'}
         }
 
+    def test_merge_build_args(self):
+        base = {
+            'build': {
+                'context': '.',
+                'args': {
+                    'ONE': '1',
+                    'TWO': '2',
+                },
+            }
+        }
+        override = {
+            'build': {
+                'args': {
+                    'TWO': 'dos',
+                    'THREE': '3',
+                },
+            }
+        }
+        actual = config.merge_service_dicts(
+            base,
+            override,
+            DEFAULT_VERSION)
+        assert actual == {
+            'build': {
+                'context': '.',
+                'args': {
+                    'ONE': '1',
+                    'TWO': 'dos',
+                    'THREE': '3',
+                },
+            }
+        }
+
     def test_external_volume_config(self):
         config_details = build_config_details({
-            'version': 2,
+            'version': '2',
             'services': {
                 'bogus': {'image': 'busybox'}
             },
@@ -885,7 +1271,7 @@ class ConfigTest(unittest.TestCase):
 
     def test_external_volume_invalid_config(self):
         config_details = build_config_details({
-            'version': 2,
+            'version': '2',
             'services': {
                 'bogus': {'image': 'busybox'}
             },
@@ -893,9 +1279,166 @@ class ConfigTest(unittest.TestCase):
                 'ext': {'external': True, 'driver': 'foo'}
             }
         })
-        with self.assertRaises(ConfigurationError):
+        with pytest.raises(ConfigurationError):
             config.load(config_details)
 
+    def test_depends_on_orders_services(self):
+        config_details = build_config_details({
+            'version': '2',
+            'services': {
+                'one': {'image': 'busybox', 'depends_on': ['three', 'two']},
+                'two': {'image': 'busybox', 'depends_on': ['three']},
+                'three': {'image': 'busybox'},
+            },
+        })
+        actual = config.load(config_details)
+        assert (
+            [service['name'] for service in actual.services] ==
+            ['three', 'two', 'one']
+        )
+
+    def test_depends_on_unknown_service_errors(self):
+        config_details = build_config_details({
+            'version': '2',
+            'services': {
+                'one': {'image': 'busybox', 'depends_on': ['three']},
+            },
+        })
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        assert "Service 'one' depends on service 'three'" in exc.exconly()
+
+    def test_load_dockerfile_without_context(self):
+        config_details = build_config_details({
+            'version': '2',
+            'services': {
+                'one': {'build': {'dockerfile': 'Dockerfile.foo'}},
+            },
+        })
+        with pytest.raises(ConfigurationError) as exc:
+            config.load(config_details)
+        assert 'one.build is invalid, context is required.' in exc.exconly()
+
+
+class NetworkModeTest(unittest.TestCase):
+    def test_network_mode_standard(self):
+        config_data = config.load(build_config_details({
+            'version': '2',
+            'services': {
+                'web': {
+                    'image': 'busybox',
+                    'command': "top",
+                    'network_mode': 'bridge',
+                },
+            },
+        }))
+
+        assert config_data.services[0]['network_mode'] == 'bridge'
+
+    def test_network_mode_standard_v1(self):
+        config_data = config.load(build_config_details({
+            'web': {
+                'image': 'busybox',
+                'command': "top",
+                'net': 'bridge',
+            },
+        }))
+
+        assert config_data.services[0]['network_mode'] == 'bridge'
+        assert 'net' not in config_data.services[0]
+
+    def test_network_mode_container(self):
+        config_data = config.load(build_config_details({
+            'version': '2',
+            'services': {
+                'web': {
+                    'image': 'busybox',
+                    'command': "top",
+                    'network_mode': 'container:foo',
+                },
+            },
+        }))
+
+        assert config_data.services[0]['network_mode'] == 'container:foo'
+
+    def test_network_mode_container_v1(self):
+        config_data = config.load(build_config_details({
+            'web': {
+                'image': 'busybox',
+                'command': "top",
+                'net': 'container:foo',
+            },
+        }))
+
+        assert config_data.services[0]['network_mode'] == 'container:foo'
+
+    def test_network_mode_service(self):
+        config_data = config.load(build_config_details({
+            'version': '2',
+            'services': {
+                'web': {
+                    'image': 'busybox',
+                    'command': "top",
+                    'network_mode': 'service:foo',
+                },
+                'foo': {
+                    'image': 'busybox',
+                    'command': "top",
+                },
+            },
+        }))
+
+        assert config_data.services[1]['network_mode'] == 'service:foo'
+
+    def test_network_mode_service_v1(self):
+        config_data = config.load(build_config_details({
+            'web': {
+                'image': 'busybox',
+                'command': "top",
+                'net': 'container:foo',
+            },
+            'foo': {
+                'image': 'busybox',
+                'command': "top",
+            },
+        }))
+
+        assert config_data.services[1]['network_mode'] == 'service:foo'
+
+    def test_network_mode_service_nonexistent(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            config.load(build_config_details({
+                'version': '2',
+                'services': {
+                    'web': {
+                        'image': 'busybox',
+                        'command': "top",
+                        'network_mode': 'service:foo',
+                    },
+                },
+            }))
+
+        assert "service 'foo' which is undefined" in excinfo.exconly()
+
+    def test_network_mode_plus_networks_is_invalid(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            config.load(build_config_details({
+                'version': '2',
+                'services': {
+                    'web': {
+                        'image': 'busybox',
+                        'command': "top",
+                        'network_mode': 'bridge',
+                        'networks': ['front'],
+                    },
+                },
+                'networks': {
+                    'front': None,
+                }
+            }))
+
+        assert "'network_mode' and 'networks' cannot be combined" in excinfo.exconly()
+
 
 class PortsTest(unittest.TestCase):
     INVALID_PORTS_TYPES = [
@@ -1146,57 +1689,54 @@ class VolumeConfigTest(unittest.TestCase):
 
 
 class MergePathMappingTest(object):
-    def config_name(self):
-        return ""
+    config_name = ""
 
     def test_empty(self):
         service_dict = config.merge_service_dicts({}, {}, DEFAULT_VERSION)
-        assert self.config_name() not in service_dict
+        assert self.config_name not in service_dict
 
     def test_no_override(self):
         service_dict = config.merge_service_dicts(
-            {self.config_name(): ['/foo:/code', '/data']},
+            {self.config_name: ['/foo:/code', '/data']},
             {},
             DEFAULT_VERSION)
-        assert set(service_dict[self.config_name()]) == set(['/foo:/code', '/data'])
+        assert set(service_dict[self.config_name]) == set(['/foo:/code', '/data'])
 
     def test_no_base(self):
         service_dict = config.merge_service_dicts(
             {},
-            {self.config_name(): ['/bar:/code']},
+            {self.config_name: ['/bar:/code']},
             DEFAULT_VERSION)
-        assert set(service_dict[self.config_name()]) == set(['/bar:/code'])
+        assert set(service_dict[self.config_name]) == set(['/bar:/code'])
 
     def test_override_explicit_path(self):
         service_dict = config.merge_service_dicts(
-            {self.config_name(): ['/foo:/code', '/data']},
-            {self.config_name(): ['/bar:/code']},
+            {self.config_name: ['/foo:/code', '/data']},
+            {self.config_name: ['/bar:/code']},
             DEFAULT_VERSION)
-        assert set(service_dict[self.config_name()]) == set(['/bar:/code', '/data'])
+        assert set(service_dict[self.config_name]) == set(['/bar:/code', '/data'])
 
     def test_add_explicit_path(self):
         service_dict = config.merge_service_dicts(
-            {self.config_name(): ['/foo:/code', '/data']},
-            {self.config_name(): ['/bar:/code', '/quux:/data']},
+            {self.config_name: ['/foo:/code', '/data']},
+            {self.config_name: ['/bar:/code', '/quux:/data']},
             DEFAULT_VERSION)
-        assert set(service_dict[self.config_name()]) == set(['/bar:/code', '/quux:/data'])
+        assert set(service_dict[self.config_name]) == set(['/bar:/code', '/quux:/data'])
 
     def test_remove_explicit_path(self):
         service_dict = config.merge_service_dicts(
-            {self.config_name(): ['/foo:/code', '/quux:/data']},
-            {self.config_name(): ['/bar:/code', '/data']},
+            {self.config_name: ['/foo:/code', '/quux:/data']},
+            {self.config_name: ['/bar:/code', '/data']},
             DEFAULT_VERSION)
-        assert set(service_dict[self.config_name()]) == set(['/bar:/code', '/data'])
+        assert set(service_dict[self.config_name]) == set(['/bar:/code', '/data'])
 
 
 class MergeVolumesTest(unittest.TestCase, MergePathMappingTest):
-    def config_name(self):
-        return 'volumes'
+    config_name = 'volumes'
 
 
 class MergeDevicesTest(unittest.TestCase, MergePathMappingTest):
-    def config_name(self):
-        return 'devices'
+    config_name = 'devices'
 
 
 class BuildOrImageMergeTest(unittest.TestCase):
@@ -1234,30 +1774,49 @@ class BuildOrImageMergeTest(unittest.TestCase):
         )
 
 
-class MergeListsTest(unittest.TestCase):
+class MergeListsTest(object):
+    config_name = ""
+    base_config = []
+    override_config = []
+
+    def merged_config(self):
+        return set(self.base_config) | set(self.override_config)
+
     def test_empty(self):
-        assert 'ports' not in config.merge_service_dicts({}, {}, DEFAULT_VERSION)
+        assert self.config_name not in config.merge_service_dicts({}, {}, DEFAULT_VERSION)
 
     def test_no_override(self):
         service_dict = config.merge_service_dicts(
-            {'ports': ['10:8000', '9000']},
+            {self.config_name: self.base_config},
             {},
             DEFAULT_VERSION)
-        assert set(service_dict['ports']) == set(['10:8000', '9000'])
+        assert set(service_dict[self.config_name]) == set(self.base_config)
 
     def test_no_base(self):
         service_dict = config.merge_service_dicts(
             {},
-            {'ports': ['10:8000', '9000']},
+            {self.config_name: self.base_config},
             DEFAULT_VERSION)
-        assert set(service_dict['ports']) == set(['10:8000', '9000'])
+        assert set(service_dict[self.config_name]) == set(self.base_config)
 
     def test_add_item(self):
         service_dict = config.merge_service_dicts(
-            {'ports': ['10:8000', '9000']},
-            {'ports': ['20:8000']},
+            {self.config_name: self.base_config},
+            {self.config_name: self.override_config},
             DEFAULT_VERSION)
-        assert set(service_dict['ports']) == set(['10:8000', '9000', '20:8000'])
+        assert set(service_dict[self.config_name]) == set(self.merged_config())
+
+
+class MergePortsTest(unittest.TestCase, MergeListsTest):
+    config_name = 'ports'
+    base_config = ['10:8000', '9000']
+    override_config = ['20:8000']
+
+
+class MergeNetworksTest(unittest.TestCase, MergeListsTest):
+    config_name = 'networks'
+    base_config = ['frontend', 'backend']
+    override_config = ['monitoring']
 
 
 class MergeStringsOrListsTest(unittest.TestCase):
@@ -1336,11 +1895,7 @@ class MemoryOptionsTest(unittest.TestCase):
         When you set a 'memswap_limit' it is invalid config unless you also set
         a mem_limit
         """
-        expected_error_msg = (
-            "Service 'foo' configuration key 'memswap_limit' is invalid: when "
-            "defining 'memswap_limit' you must set 'mem_limit' as well"
-        )
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -1351,6 +1906,10 @@ class MemoryOptionsTest(unittest.TestCase):
                 )
             )
 
+        assert "foo.memswap_limit is invalid: when defining " \
+               "'memswap_limit' you must set 'mem_limit' as well" \
+            in excinfo.exconly()
+
     def test_validation_with_correct_memswap_values(self):
         service_dict = config.load(
             build_config_details(
@@ -1416,7 +1975,7 @@ class EnvTest(unittest.TestCase):
         }
         self.assertEqual(
             resolve_environment(service_dict),
-            {'FILE_DEF': 'F1', 'FILE_DEF_EMPTY': '', 'ENV_DEF': 'E3', 'NO_DEF': ''},
+            {'FILE_DEF': 'F1', 'FILE_DEF_EMPTY': '', 'ENV_DEF': 'E3', 'NO_DEF': None},
         )
 
     def test_resolve_environment_from_env_file(self):
@@ -1457,7 +2016,7 @@ class EnvTest(unittest.TestCase):
                 'FILE_DEF': u'bär',
                 'FILE_DEF_EMPTY': '',
                 'ENV_DEF': 'E3',
-                'NO_DEF': ''
+                'NO_DEF': None
             },
         )
 
@@ -1476,7 +2035,7 @@ class EnvTest(unittest.TestCase):
         }
         self.assertEqual(
             resolve_build_args(build),
-            {'arg1': 'value1', 'empty_arg': '', 'env_arg': 'value2', 'no_env': ''},
+            {'arg1': 'value1', 'empty_arg': '', 'env_arg': 'value2', 'no_env': None},
         )
 
     @pytest.mark.xfail(IS_WINDOWS_PLATFORM, reason='paths use slash')
@@ -1524,6 +2083,7 @@ class ExtendsTest(unittest.TestCase):
                 'name': 'myweb',
                 'image': 'busybox',
                 'command': 'top',
+                'network_mode': 'bridge',
                 'links': ['mydb:db'],
                 'environment': {
                     "FOO": "1",
@@ -1541,6 +2101,7 @@ class ExtendsTest(unittest.TestCase):
                 'name': 'web',
                 'image': 'busybox',
                 'command': '/bin/true',
+                'network_mode': 'host',
                 'environment': {
                     "FOO": "2",
                     "BAR": "1",
@@ -1559,6 +2120,7 @@ class ExtendsTest(unittest.TestCase):
                 'name': 'myweb',
                 'image': 'busybox',
                 'command': '/bin/true',
+                'network_mode': 'host',
                 'environment': {
                     "FOO": "2",
                     "BAR": "2",
@@ -1610,7 +2172,7 @@ class ExtendsTest(unittest.TestCase):
         self.assertEqual(path, expected)
 
     def test_extends_validation_empty_dictionary(self):
-        with self.assertRaisesRegexp(ConfigurationError, 'service'):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -1621,8 +2183,10 @@ class ExtendsTest(unittest.TestCase):
                 )
             )
 
+        assert 'service' in excinfo.exconly()
+
     def test_extends_validation_missing_service_key(self):
-        with self.assertRaisesRegexp(ConfigurationError, "'service' is a required property"):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -1633,12 +2197,10 @@ class ExtendsTest(unittest.TestCase):
                 )
             )
 
+        assert "'service' is a required property" in excinfo.exconly()
+
     def test_extends_validation_invalid_key(self):
-        expected_error_msg = (
-            "Service 'web' configuration key 'extends' "
-            "contains unsupported option: 'rogue_key'"
-        )
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -1656,12 +2218,11 @@ class ExtendsTest(unittest.TestCase):
                 )
             )
 
+        assert "web.extends contains unsupported option: 'rogue_key'" \
+            in excinfo.exconly()
+
     def test_extends_validation_sub_property_key(self):
-        expected_error_msg = (
-            "Service 'web' configuration key 'extends' 'file' contains 1, "
-            "which is an invalid type, it should be a string"
-        )
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             config.load(
                 build_config_details(
                     {
@@ -1678,13 +2239,16 @@ class ExtendsTest(unittest.TestCase):
                 )
             )
 
+        assert "web.extends.file contains 1, which is an invalid type, it should be a string" \
+            in excinfo.exconly()
+
     def test_extends_validation_no_file_key_no_filename_set(self):
         dictionary = {'extends': {'service': 'web'}}
 
-        def load_config():
-            return make_service_dict('myweb', dictionary, working_dir='tests/fixtures/extends')
+        with pytest.raises(ConfigurationError) as excinfo:
+            make_service_dict('myweb', dictionary, working_dir='tests/fixtures/extends')
 
-        self.assertRaisesRegexp(ConfigurationError, 'file', load_config)
+        assert 'file' in excinfo.exconly()
 
     def test_extends_validation_valid_config(self):
         service = config.load(
@@ -1705,7 +2269,7 @@ class ExtendsTest(unittest.TestCase):
         with pytest.raises(ConfigurationError) as exc:
             load_from_filename('tests/fixtures/extends/service-with-invalid-schema.yml')
         assert (
-            "Service 'myweb' has neither an image nor a build path specified" in
+            "myweb has neither an image nor a build path specified" in
             exc.exconly()
         )
 
@@ -1738,22 +2302,30 @@ class ExtendsTest(unittest.TestCase):
         ]))
 
     def test_invalid_links_in_extended_service(self):
-        expected_error_msg = "services with 'links' cannot be extended"
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             load_from_filename('tests/fixtures/extends/invalid-links.yml')
 
-    def test_invalid_volumes_from_in_extended_service(self):
-        expected_error_msg = "services with 'volumes_from' cannot be extended"
+        assert "services with 'links' cannot be extended" in excinfo.exconly()
 
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+    def test_invalid_volumes_from_in_extended_service(self):
+        with pytest.raises(ConfigurationError) as excinfo:
             load_from_filename('tests/fixtures/extends/invalid-volumes.yml')
 
-    def test_invalid_net_in_extended_service(self):
-        expected_error_msg = "services with 'net: container' cannot be extended"
+        assert "services with 'volumes_from' cannot be extended" in excinfo.exconly()
 
-        with self.assertRaisesRegexp(ConfigurationError, expected_error_msg):
+    def test_invalid_net_in_extended_service(self):
+        with pytest.raises(ConfigurationError) as excinfo:
+            load_from_filename('tests/fixtures/extends/invalid-net-v2.yml')
+
+        assert 'network_mode: service' in excinfo.exconly()
+        assert 'cannot be extended' in excinfo.exconly()
+
+        with pytest.raises(ConfigurationError) as excinfo:
             load_from_filename('tests/fixtures/extends/invalid-net.yml')
 
+        assert 'net: container' in excinfo.exconly()
+        assert 'cannot be extended' in excinfo.exconly()
+
     @mock.patch.dict(os.environ)
     def test_load_config_runs_interpolation_in_extended_service(self):
         os.environ.update(HOSTNAME_VALUE="penguin")
@@ -1796,10 +2368,12 @@ class ExtendsTest(unittest.TestCase):
         ])
 
     def test_load_throws_error_when_base_service_does_not_exist(self):
-        err_msg = r'''Cannot extend service 'foo' in .*: Service not found'''
-        with self.assertRaisesRegexp(ConfigurationError, err_msg):
+        with pytest.raises(ConfigurationError) as excinfo:
             load_from_filename('tests/fixtures/extends/nonexistent-service.yml')
 
+        assert "Cannot extend service 'foo'" in excinfo.exconly()
+        assert "Service not found" in excinfo.exconly()
+
     def test_partial_service_config_in_extends_is_still_valid(self):
         dicts = load_from_filename('tests/fixtures/extends/valid-common-config.yml')
         self.assertEqual(dicts[0]['environment'], {'FOO': '1'})
@@ -1888,6 +2462,70 @@ class ExtendsTest(unittest.TestCase):
 
         assert config == expected
 
+    def test_extends_with_mixed_versions_is_error(self):
+        tmpdir = py.test.ensuretemp('test_extends_with_mixed_version')
+        self.addCleanup(tmpdir.remove)
+        tmpdir.join('docker-compose.yml').write("""
+            version: "2"
+            services:
+              web:
+                extends:
+                  file: base.yml
+                  service: base
+                image: busybox
+        """)
+        tmpdir.join('base.yml').write("""
+            base:
+              volumes: ['/foo']
+              ports: ['3000:3000']
+        """)
+
+        with pytest.raises(ConfigurationError) as exc:
+            load_from_filename(str(tmpdir.join('docker-compose.yml')))
+        assert 'Version mismatch' in exc.exconly()
+
+    def test_extends_with_defined_version_passes(self):
+        tmpdir = py.test.ensuretemp('test_extends_with_defined_version')
+        self.addCleanup(tmpdir.remove)
+        tmpdir.join('docker-compose.yml').write("""
+            version: "2"
+            services:
+              web:
+                extends:
+                  file: base.yml
+                  service: base
+                image: busybox
+        """)
+        tmpdir.join('base.yml').write("""
+            version: "2"
+            services:
+                base:
+                  volumes: ['/foo']
+                  ports: ['3000:3000']
+                  command: top
+        """)
+
+        service = load_from_filename(str(tmpdir.join('docker-compose.yml')))
+        self.assertEquals(service[0]['command'], "top")
+
+    def test_extends_with_depends_on(self):
+        tmpdir = py.test.ensuretemp('test_extends_with_defined_version')
+        self.addCleanup(tmpdir.remove)
+        tmpdir.join('docker-compose.yml').write("""
+            version: "2"
+            services:
+              base:
+                image: example
+              web:
+                extends: base
+                image: busybox
+                depends_on: ['other']
+              other:
+                image: example
+        """)
+        services = load_from_filename(str(tmpdir.join('docker-compose.yml')))
+        assert service_sort(services)[2]['depends_on'] == ['other']
+
 
 @pytest.mark.xfail(IS_WINDOWS_PLATFORM, reason='paths use slash')
 class ExpandPathTest(unittest.TestCase):
diff --git a/tests/unit/config/sort_services_test.py b/tests/unit/config/sort_services_test.py
index ebe444fe..c39ac022 100644
--- a/tests/unit/config/sort_services_test.py
+++ b/tests/unit/config/sort_services_test.py
@@ -1,13 +1,14 @@
 from __future__ import absolute_import
 from __future__ import unicode_literals
 
+import pytest
+
 from compose.config.errors import DependencyError
 from compose.config.sort_services import sort_service_dicts
 from compose.config.types import VolumeFromSpec
-from tests import unittest
 
 
-class SortServiceTest(unittest.TestCase):
+class TestSortService(object):
     def test_sort_service_dicts_1(self):
         services = [
             {
@@ -23,10 +24,10 @@ class SortServiceTest(unittest.TestCase):
         ]
 
         sorted_services = sort_service_dicts(services)
-        self.assertEqual(len(sorted_services), 3)
-        self.assertEqual(sorted_services[0]['name'], 'grunt')
-        self.assertEqual(sorted_services[1]['name'], 'redis')
-        self.assertEqual(sorted_services[2]['name'], 'web')
+        assert len(sorted_services) == 3
+        assert sorted_services[0]['name'] == 'grunt'
+        assert sorted_services[1]['name'] == 'redis'
+        assert sorted_services[2]['name'] == 'web'
 
     def test_sort_service_dicts_2(self):
         services = [
@@ -44,10 +45,10 @@ class SortServiceTest(unittest.TestCase):
         ]
 
         sorted_services = sort_service_dicts(services)
-        self.assertEqual(len(sorted_services), 3)
-        self.assertEqual(sorted_services[0]['name'], 'redis')
-        self.assertEqual(sorted_services[1]['name'], 'postgres')
-        self.assertEqual(sorted_services[2]['name'], 'web')
+        assert len(sorted_services) == 3
+        assert sorted_services[0]['name'] == 'redis'
+        assert sorted_services[1]['name'] == 'postgres'
+        assert sorted_services[2]['name'] == 'web'
 
     def test_sort_service_dicts_3(self):
         services = [
@@ -65,10 +66,10 @@ class SortServiceTest(unittest.TestCase):
         ]
 
         sorted_services = sort_service_dicts(services)
-        self.assertEqual(len(sorted_services), 3)
-        self.assertEqual(sorted_services[0]['name'], 'child')
-        self.assertEqual(sorted_services[1]['name'], 'parent')
-        self.assertEqual(sorted_services[2]['name'], 'grandparent')
+        assert len(sorted_services) == 3
+        assert sorted_services[0]['name'] == 'child'
+        assert sorted_services[1]['name'] == 'parent'
+        assert sorted_services[2]['name'] == 'grandparent'
 
     def test_sort_service_dicts_4(self):
         services = [
@@ -86,10 +87,10 @@ class SortServiceTest(unittest.TestCase):
         ]
 
         sorted_services = sort_service_dicts(services)
-        self.assertEqual(len(sorted_services), 3)
-        self.assertEqual(sorted_services[0]['name'], 'child')
-        self.assertEqual(sorted_services[1]['name'], 'parent')
-        self.assertEqual(sorted_services[2]['name'], 'grandparent')
+        assert len(sorted_services) == 3
+        assert sorted_services[0]['name'] == 'child'
+        assert sorted_services[1]['name'] == 'parent'
+        assert sorted_services[2]['name'] == 'grandparent'
 
     def test_sort_service_dicts_5(self):
         services = [
@@ -99,7 +100,7 @@ class SortServiceTest(unittest.TestCase):
             },
             {
                 'name': 'parent',
-                'net': 'container:child'
+                'network_mode': 'service:child'
             },
             {
                 'name': 'child'
@@ -107,10 +108,10 @@ class SortServiceTest(unittest.TestCase):
         ]
 
         sorted_services = sort_service_dicts(services)
-        self.assertEqual(len(sorted_services), 3)
-        self.assertEqual(sorted_services[0]['name'], 'child')
-        self.assertEqual(sorted_services[1]['name'], 'parent')
-        self.assertEqual(sorted_services[2]['name'], 'grandparent')
+        assert len(sorted_services) == 3
+        assert sorted_services[0]['name'] == 'child'
+        assert sorted_services[1]['name'] == 'parent'
+        assert sorted_services[2]['name'] == 'grandparent'
 
     def test_sort_service_dicts_6(self):
         services = [
@@ -128,15 +129,15 @@ class SortServiceTest(unittest.TestCase):
         ]
 
         sorted_services = sort_service_dicts(services)
-        self.assertEqual(len(sorted_services), 3)
-        self.assertEqual(sorted_services[0]['name'], 'child')
-        self.assertEqual(sorted_services[1]['name'], 'parent')
-        self.assertEqual(sorted_services[2]['name'], 'grandparent')
+        assert len(sorted_services) == 3
+        assert sorted_services[0]['name'] == 'child'
+        assert sorted_services[1]['name'] == 'parent'
+        assert sorted_services[2]['name'] == 'grandparent'
 
     def test_sort_service_dicts_7(self):
         services = [
             {
-                'net': 'container:three',
+                'network_mode': 'service:three',
                 'name': 'four'
             },
             {
@@ -153,11 +154,11 @@ class SortServiceTest(unittest.TestCase):
         ]
 
         sorted_services = sort_service_dicts(services)
-        self.assertEqual(len(sorted_services), 4)
-        self.assertEqual(sorted_services[0]['name'], 'one')
-        self.assertEqual(sorted_services[1]['name'], 'two')
-        self.assertEqual(sorted_services[2]['name'], 'three')
-        self.assertEqual(sorted_services[3]['name'], 'four')
+        assert len(sorted_services) == 4
+        assert sorted_services[0]['name'] == 'one'
+        assert sorted_services[1]['name'] == 'two'
+        assert sorted_services[2]['name'] == 'three'
+        assert sorted_services[3]['name'] == 'four'
 
     def test_sort_service_dicts_circular_imports(self):
         services = [
@@ -171,13 +172,10 @@ class SortServiceTest(unittest.TestCase):
             },
         ]
 
-        try:
+        with pytest.raises(DependencyError) as exc:
             sort_service_dicts(services)
-        except DependencyError as e:
-            self.assertIn('redis', e.msg)
-            self.assertIn('web', e.msg)
-        else:
-            self.fail('Should have thrown an DependencyError')
+        assert 'redis' in exc.exconly()
+        assert 'web' in exc.exconly()
 
     def test_sort_service_dicts_circular_imports_2(self):
         services = [
@@ -194,13 +192,10 @@ class SortServiceTest(unittest.TestCase):
             }
         ]
 
-        try:
+        with pytest.raises(DependencyError) as exc:
             sort_service_dicts(services)
-        except DependencyError as e:
-            self.assertIn('redis', e.msg)
-            self.assertIn('web', e.msg)
-        else:
-            self.fail('Should have thrown an DependencyError')
+        assert 'redis' in exc.exconly()
+        assert 'web' in exc.exconly()
 
     def test_sort_service_dicts_circular_imports_3(self):
         services = [
@@ -218,13 +213,10 @@ class SortServiceTest(unittest.TestCase):
             }
         ]
 
-        try:
+        with pytest.raises(DependencyError) as exc:
             sort_service_dicts(services)
-        except DependencyError as e:
-            self.assertIn('a', e.msg)
-            self.assertIn('b', e.msg)
-        else:
-            self.fail('Should have thrown an DependencyError')
+        assert 'a' in exc.exconly()
+        assert 'b' in exc.exconly()
 
     def test_sort_service_dicts_self_imports(self):
         services = [
@@ -234,9 +226,18 @@ class SortServiceTest(unittest.TestCase):
             },
         ]
 
-        try:
+        with pytest.raises(DependencyError) as exc:
             sort_service_dicts(services)
-        except DependencyError as e:
-            self.assertIn('web', e.msg)
-        else:
-            self.fail('Should have thrown an DependencyError')
+        assert 'web' in exc.exconly()
+
+    def test_sort_service_dicts_depends_on_self(self):
+        services = [
+            {
+                'depends_on': ['web'],
+                'name': 'web'
+            },
+        ]
+
+        with pytest.raises(DependencyError) as exc:
+            sort_service_dicts(services)
+        assert 'A service can not depend on itself: web' in exc.exconly()
diff --git a/tests/unit/config/types_test.py b/tests/unit/config/types_test.py
index 50b7efcb..c741a339 100644
--- a/tests/unit/config/types_test.py
+++ b/tests/unit/config/types_test.py
@@ -3,13 +3,13 @@ from __future__ import unicode_literals
 
 import pytest
 
+from compose.config.config import V1
+from compose.config.config import V2_0
 from compose.config.errors import ConfigurationError
 from compose.config.types import parse_extra_hosts
 from compose.config.types import VolumeFromSpec
 from compose.config.types import VolumeSpec
 from compose.const import IS_WINDOWS_PLATFORM
-from tests.unit.config.config_test import V1
-from tests.unit.config.config_test import V2
 
 
 def test_parse_extra_hosts_list():
@@ -91,26 +91,26 @@ class TestVolumesFromSpec(object):
             VolumeFromSpec.parse('unknown:format:ro', self.services, V1)
 
     def test_parse_v2_from_service(self):
-        volume_from = VolumeFromSpec.parse('servicea', self.services, V2)
+        volume_from = VolumeFromSpec.parse('servicea', self.services, V2_0)
         assert volume_from == VolumeFromSpec('servicea', 'rw', 'service')
 
     def test_parse_v2_from_service_with_mode(self):
-        volume_from = VolumeFromSpec.parse('servicea:ro', self.services, V2)
+        volume_from = VolumeFromSpec.parse('servicea:ro', self.services, V2_0)
         assert volume_from == VolumeFromSpec('servicea', 'ro', 'service')
 
     def test_parse_v2_from_container(self):
-        volume_from = VolumeFromSpec.parse('container:foo', self.services, V2)
+        volume_from = VolumeFromSpec.parse('container:foo', self.services, V2_0)
         assert volume_from == VolumeFromSpec('foo', 'rw', 'container')
 
     def test_parse_v2_from_container_with_mode(self):
-        volume_from = VolumeFromSpec.parse('container:foo:ro', self.services, V2)
+        volume_from = VolumeFromSpec.parse('container:foo:ro', self.services, V2_0)
         assert volume_from == VolumeFromSpec('foo', 'ro', 'container')
 
     def test_parse_v2_invalid_type(self):
         with pytest.raises(ConfigurationError) as exc:
-            VolumeFromSpec.parse('bogus:foo:ro', self.services, V2)
+            VolumeFromSpec.parse('bogus:foo:ro', self.services, V2_0)
         assert "Unknown volumes_from type 'bogus'" in exc.exconly()
 
     def test_parse_v2_invalid(self):
         with pytest.raises(ConfigurationError):
-            VolumeFromSpec.parse('unknown:format:ro', self.services, V2)
+            VolumeFromSpec.parse('unknown:format:ro', self.services, V2_0)
diff --git a/tests/unit/container_test.py b/tests/unit/container_test.py
index 88691150..189b0c99 100644
--- a/tests/unit/container_test.py
+++ b/tests/unit/container_test.py
@@ -12,8 +12,9 @@ from compose.container import get_container_name
 class ContainerTest(unittest.TestCase):
 
     def setUp(self):
+        self.container_id = "abcabcabcbabc12345"
         self.container_dict = {
-            "Id": "abc",
+            "Id": self.container_id,
             "Image": "busybox:latest",
             "Command": "top",
             "Created": 1387384730,
@@ -41,19 +42,22 @@ class ContainerTest(unittest.TestCase):
         self.assertEqual(
             container.dictionary,
             {
-                "Id": "abc",
+                "Id": self.container_id,
                 "Image": "busybox:latest",
                 "Name": "/composetest_db_1",
             })
 
     def test_from_ps_prefixed(self):
-        self.container_dict['Names'] = ['/swarm-host-1' + n for n in self.container_dict['Names']]
+        self.container_dict['Names'] = [
+            '/swarm-host-1' + n for n in self.container_dict['Names']
+        ]
 
-        container = Container.from_ps(None,
-                                      self.container_dict,
-                                      has_been_inspected=True)
+        container = Container.from_ps(
+            None,
+            self.container_dict,
+            has_been_inspected=True)
         self.assertEqual(container.dictionary, {
-            "Id": "abc",
+            "Id": self.container_id,
             "Image": "busybox:latest",
             "Name": "/composetest_db_1",
         })
@@ -142,6 +146,10 @@ class ContainerTest(unittest.TestCase):
         self.assertEqual(container.get('HostConfig.VolumesFrom'), ["volume_id"])
         self.assertEqual(container.get('Foo.Bar.DoesNotExist'), None)
 
+    def test_short_id(self):
+        container = Container(None, self.container_dict, has_been_inspected=True)
+        assert container.short_id == self.container_id[:12]
+
 
 class GetContainerNameTestCase(unittest.TestCase):
 
diff --git a/tests/unit/project_test.py b/tests/unit/project_test.py
index ffd4455f..c28c2152 100644
--- a/tests/unit/project_test.py
+++ b/tests/unit/project_test.py
@@ -45,7 +45,7 @@ class ProjectTest(unittest.TestCase):
         self.assertEqual(project.get_service('web').options['image'], 'busybox:latest')
         self.assertEqual(project.get_service('db').name, 'db')
         self.assertEqual(project.get_service('db').options['image'], 'busybox:latest')
-        self.assertFalse(project.use_networking)
+        self.assertFalse(project.networks.use_networking)
 
     def test_from_config_v2(self):
         config = Config(
@@ -65,7 +65,7 @@ class ProjectTest(unittest.TestCase):
         )
         project = Project.from_config('composetest', config, None)
         self.assertEqual(len(project.services), 2)
-        self.assertTrue(project.use_networking)
+        self.assertTrue(project.networks.use_networking)
 
     def test_get_service(self):
         web = Service(
@@ -349,7 +349,7 @@ class ProjectTest(unittest.TestCase):
             ),
         )
         service = project.get_service('test')
-        self.assertEqual(service.net.id, None)
+        self.assertEqual(service.network_mode.id, None)
         self.assertNotIn('NetworkMode', service._get_container_host_config({}))
 
     def test_use_net_from_container(self):
@@ -365,7 +365,7 @@ class ProjectTest(unittest.TestCase):
                     {
                         'name': 'test',
                         'image': 'busybox:latest',
-                        'net': 'container:aaa'
+                        'network_mode': 'container:aaa'
                     },
                 ],
                 networks=None,
@@ -373,7 +373,7 @@ class ProjectTest(unittest.TestCase):
             ),
         )
         service = project.get_service('test')
-        self.assertEqual(service.net.mode, 'container:' + container_id)
+        self.assertEqual(service.network_mode.mode, 'container:' + container_id)
 
     def test_use_net_from_service(self):
         container_name = 'test_aaa_1'
@@ -398,7 +398,7 @@ class ProjectTest(unittest.TestCase):
                     {
                         'name': 'test',
                         'image': 'busybox:latest',
-                        'net': 'container:aaa'
+                        'network_mode': 'service:aaa'
                     },
                 ],
                 networks=None,
@@ -407,7 +407,7 @@ class ProjectTest(unittest.TestCase):
         )
 
         service = project.get_service('test')
-        self.assertEqual(service.net.mode, 'container:' + container_name)
+        self.assertEqual(service.network_mode.mode, 'container:' + container_name)
 
     def test_uses_default_network_true(self):
         project = Project.from_config(
@@ -426,7 +426,7 @@ class ProjectTest(unittest.TestCase):
             ),
         )
 
-        assert project.uses_default_network()
+        assert 'default' in project.networks.networks
 
     def test_uses_default_network_false(self):
         project = Project.from_config(
@@ -438,7 +438,7 @@ class ProjectTest(unittest.TestCase):
                     {
                         'name': 'foo',
                         'image': 'busybox:latest',
-                        'networks': ['custom']
+                        'networks': {'custom': None}
                     },
                 ],
                 networks={'custom': {}},
@@ -446,7 +446,7 @@ class ProjectTest(unittest.TestCase):
             ),
         )
 
-        assert not project.uses_default_network()
+        assert 'default' not in project.networks.networks
 
     def test_container_without_name(self):
         self.mock_client.containers.return_value = [
diff --git a/tests/unit/service_test.py b/tests/unit/service_test.py
index c9244a47..321ebad0 100644
--- a/tests/unit/service_test.py
+++ b/tests/unit/service_test.py
@@ -15,16 +15,16 @@ from compose.const import LABEL_SERVICE
 from compose.container import Container
 from compose.service import build_ulimits
 from compose.service import build_volume_binding
-from compose.service import ContainerNet
+from compose.service import ContainerNetworkMode
 from compose.service import get_container_data_volumes
 from compose.service import ImageType
 from compose.service import merge_volume_bindings
 from compose.service import NeedsBuildError
-from compose.service import Net
+from compose.service import NetworkMode
 from compose.service import NoSuchImageError
 from compose.service import parse_repository_tag
 from compose.service import Service
-from compose.service import ServiceNet
+from compose.service import ServiceNetworkMode
 from compose.service import warn_on_masked_volume
 
 
@@ -266,14 +266,53 @@ class ServiceTest(unittest.TestCase):
 
         self.assertEqual(
             opts['labels'][LABEL_CONFIG_HASH],
-            '3c85881a8903b9d73a06c41860c8be08acce1494ab4cf8408375966dccd714de')
-        self.assertEqual(
-            opts['environment'],
-            {
-                'affinity:container': '=ababab',
-                'also': 'real',
-            }
+            'f8bfa1058ad1f4231372a0b1639f0dfdb574dafff4e8d7938049ae993f7cf1fc')
+        assert opts['environment'] == ['also=real']
+
+    def test_get_container_create_options_sets_affinity_with_binds(self):
+        service = Service(
+            'foo',
+            image='foo',
+            client=self.mock_client,
         )
+        self.mock_client.inspect_image.return_value = {'Id': 'abcd'}
+        prev_container = mock.Mock(
+            id='ababab',
+            image_config={'ContainerConfig': {'Volumes': ['/data']}})
+
+        def container_get(key):
+            return {
+                'Mounts': [
+                    {
+                        'Destination': '/data',
+                        'Source': '/some/path',
+                        'Name': 'abab1234',
+                    },
+                ]
+            }.get(key, None)
+
+        prev_container.get.side_effect = container_get
+
+        opts = service._get_container_create_options(
+            {},
+            1,
+            previous_container=prev_container)
+
+        assert opts['environment'] == ['affinity:container==ababab']
+
+    def test_get_container_create_options_no_affinity_without_binds(self):
+        service = Service('foo', image='foo', client=self.mock_client)
+        self.mock_client.inspect_image.return_value = {'Id': 'abcd'}
+        prev_container = mock.Mock(
+            id='ababab',
+            image_config={'ContainerConfig': {}})
+        prev_container.get.return_value = None
+
+        opts = service._get_container_create_options(
+            {},
+            1,
+            previous_container=prev_container)
+        assert opts['environment'] == []
 
     def test_get_container_not_found(self):
         self.mock_client.containers.return_value = []
@@ -407,7 +446,7 @@ class ServiceTest(unittest.TestCase):
             'foo',
             image='example.com/foo',
             client=self.mock_client,
-            net=ServiceNet(Service('other')),
+            network_mode=ServiceNetworkMode(Service('other')),
             links=[(Service('one'), 'one')],
             volumes_from=[VolumeFromSpec(Service('two'), 'rw', 'service')])
 
@@ -417,11 +456,12 @@ class ServiceTest(unittest.TestCase):
             'options': {'image': 'example.com/foo'},
             'links': [('one', 'one')],
             'net': 'other',
+            'networks': [],
             'volumes_from': [('two', 'rw')],
         }
-        self.assertEqual(config_dict, expected)
+        assert config_dict == expected
 
-    def test_config_dict_with_net_from_container(self):
+    def test_config_dict_with_network_mode_from_container(self):
         self.mock_client.inspect_image.return_value = {'Id': 'abcd'}
         container = Container(
             self.mock_client,
@@ -430,17 +470,18 @@ class ServiceTest(unittest.TestCase):
             'foo',
             image='example.com/foo',
             client=self.mock_client,
-            net=container)
+            network_mode=ContainerNetworkMode(container))
 
         config_dict = service.config_dict()
         expected = {
             'image_id': 'abcd',
             'options': {'image': 'example.com/foo'},
             'links': [],
+            'networks': [],
             'net': 'aaabbb',
             'volumes_from': [],
         }
-        self.assertEqual(config_dict, expected)
+        assert config_dict == expected
 
     def test_remove_image_none(self):
         web = Service('web', image='example', client=self.mock_client)
@@ -536,14 +577,6 @@ class ServiceTest(unittest.TestCase):
             ports=["127.0.0.1:1000-2000:2000-3000"])
         self.assertEqual(service.specifies_host_port(), True)
 
-    def test_get_links_with_networking(self):
-        service = Service(
-            'foo',
-            image='foo',
-            links=[(Service('one'), 'one')],
-            use_networking=True)
-        self.assertEqual(service._get_links(link_to_self=True), [])
-
     def test_image_name_from_config(self):
         image_name = 'example/web:latest'
         service = Service('foo', image=image_name)
@@ -597,20 +630,20 @@ class BuildUlimitsTestCase(unittest.TestCase):
 
 class NetTestCase(unittest.TestCase):
 
-    def test_net(self):
-        net = Net('host')
-        self.assertEqual(net.id, 'host')
-        self.assertEqual(net.mode, 'host')
-        self.assertEqual(net.service_name, None)
+    def test_network_mode(self):
+        network_mode = NetworkMode('host')
+        self.assertEqual(network_mode.id, 'host')
+        self.assertEqual(network_mode.mode, 'host')
+        self.assertEqual(network_mode.service_name, None)
 
-    def test_net_container(self):
+    def test_network_mode_container(self):
         container_id = 'abcd'
-        net = ContainerNet(Container(None, {'Id': container_id}))
-        self.assertEqual(net.id, container_id)
-        self.assertEqual(net.mode, 'container:' + container_id)
-        self.assertEqual(net.service_name, None)
+        network_mode = ContainerNetworkMode(Container(None, {'Id': container_id}))
+        self.assertEqual(network_mode.id, container_id)
+        self.assertEqual(network_mode.mode, 'container:' + container_id)
+        self.assertEqual(network_mode.service_name, None)
 
-    def test_net_service(self):
+    def test_network_mode_service(self):
         container_id = 'bbbb'
         service_name = 'web'
         mock_client = mock.create_autospec(docker.Client)
@@ -619,23 +652,23 @@ class NetTestCase(unittest.TestCase):
         ]
 
         service = Service(name=service_name, client=mock_client)
-        net = ServiceNet(service)
+        network_mode = ServiceNetworkMode(service)
 
-        self.assertEqual(net.id, service_name)
-        self.assertEqual(net.mode, 'container:' + container_id)
-        self.assertEqual(net.service_name, service_name)
+        self.assertEqual(network_mode.id, service_name)
+        self.assertEqual(network_mode.mode, 'container:' + container_id)
+        self.assertEqual(network_mode.service_name, service_name)
 
-    def test_net_service_no_containers(self):
+    def test_network_mode_service_no_containers(self):
         service_name = 'web'
         mock_client = mock.create_autospec(docker.Client)
         mock_client.containers.return_value = []
 
         service = Service(name=service_name, client=mock_client)
-        net = ServiceNet(service)
+        network_mode = ServiceNetworkMode(service)
 
-        self.assertEqual(net.id, service_name)
-        self.assertEqual(net.mode, None)
-        self.assertEqual(net.service_name, service_name)
+        self.assertEqual(network_mode.id, service_name)
+        self.assertEqual(network_mode.mode, None)
+        self.assertEqual(network_mode.service_name, service_name)
 
 
 def build_mount(destination, source, mode='rw'):
@@ -656,6 +689,7 @@ class ServiceVolumesTest(unittest.TestCase):
             '/host/volume:/host/volume:ro',
             '/new/volume',
             '/existing/volume',
+            'named:/named/vol',
         ]]
 
         self.mock_client.inspect_image.return_value = {
@@ -697,8 +731,8 @@ class ServiceVolumesTest(unittest.TestCase):
         }, has_been_inspected=True)
 
         expected = [
-            VolumeSpec.parse('/var/lib/docker/aaaaaaaa:/existing/volume:rw'),
-            VolumeSpec.parse('/var/lib/docker/cccccccc:/mnt/image/data:rw'),
+            VolumeSpec.parse('existingvolume:/existing/volume:rw'),
+            VolumeSpec.parse('imagedata:/mnt/image/data:rw'),
         ]
 
         volumes = get_container_data_volumes(container, options)
@@ -716,7 +750,8 @@ class ServiceVolumesTest(unittest.TestCase):
             'ContainerConfig': {'Volumes': {}}
         }
 
-        intermediate_container = Container(self.mock_client, {
+        previous_container = Container(self.mock_client, {
+            'Id': 'cdefab',
             'Image': 'ababab',
             'Mounts': [{
                 'Source': '/var/lib/docker/aaaaaaaa',
@@ -730,11 +765,12 @@ class ServiceVolumesTest(unittest.TestCase):
         expected = [
             '/host/volume:/host/volume:ro',
             '/host/rw/volume:/host/rw/volume:rw',
-            '/var/lib/docker/aaaaaaaa:/existing/volume:rw',
+            'existingvolume:/existing/volume:rw',
         ]
 
-        binds = merge_volume_bindings(options, intermediate_container)
-        self.assertEqual(set(binds), set(expected))
+        binds, affinity = merge_volume_bindings(options, previous_container)
+        assert sorted(binds) == sorted(expected)
+        assert affinity == {'affinity:container': '=cdefab'}
 
     def test_mount_same_host_path_to_two_volumes(self):
         service = Service(
@@ -767,13 +803,14 @@ class ServiceVolumesTest(unittest.TestCase):
             ]),
         )
 
-    def test_different_host_path_in_container_json(self):
+    def test_get_container_create_options_with_different_host_path_in_container_json(self):
         service = Service(
             'web',
             image='busybox',
             volumes=[VolumeSpec.parse('/host/path:/data')],
             client=self.mock_client,
         )
+        volume_name = 'abcdefff1234'
 
         self.mock_client.inspect_image.return_value = {
             'Id': 'ababab',
@@ -794,7 +831,7 @@ class ServiceVolumesTest(unittest.TestCase):
                     'Mode': '',
                     'RW': True,
                     'Driver': 'local',
-                    'Name': 'abcdefff1234'
+                    'Name': volume_name,
                 },
             ]
         }
@@ -805,9 +842,9 @@ class ServiceVolumesTest(unittest.TestCase):
             previous_container=Container(self.mock_client, {'Id': '123123123'}),
         )
 
-        self.assertEqual(
-            self.mock_client.create_host_config.call_args[1]['binds'],
-            ['/mnt/sda1/host/path:/data:rw'],
+        assert (
+            self.mock_client.create_host_config.call_args[1]['binds'] ==
+            ['{}:/data:rw'.format(volume_name)]
         )
 
     def test_warn_on_masked_volume_no_warning_when_no_container_volumes(self):