diff --git a/.gitignore b/.gitignore
index 6ace32b..0820d2c 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,4 +1,4 @@
 .DS_Store
 npm-debug.log
-node_modules
+/node_modules
 /npm-alias
diff --git a/package.json b/package.json
index b0538d5..72c6c3f 100644
--- a/package.json
+++ b/package.json
@@ -39,6 +39,7 @@
   ],
   "dependencies": {
     "babylon": "^7.0.0-beta.41",
+    "node-modules-regexp": "^1.0.0",
     "pirates": "^3.0.2",
     "vlq": "^0.2.1"
   }
diff --git a/register.js b/register.js
index 7684ca8..75a70ec 100644
--- a/register.js
+++ b/register.js
@@ -16,6 +16,7 @@ module.exports = function setOptions(newOptions) {
 
 var jsLoader = require.extensions['.js'];
 var exts = [ '.js', '.mjs', '.jsx', '.flow', '.es6' ];
+var nodeModulesRegexp = require('node-modules-regexp');
 
 var revert = pirates.addHook(function hook(code, filename) {
   try {
@@ -25,15 +26,21 @@ var revert = pirates.addHook(function hook(code, filename) {
     e.message = filename + ': ' + e.message;
     throw e;
   }
-}, { exts: exts, matcher: shouldTransform });
+}, { exts: exts, matcher: shouldTransform, ignoreNodeModules: false });
 
 function shouldTransform(filename) {
   var includes = options && regexpPattern(options.includes || options.include);
   var excludes =
     options && 'excludes' in options ? regexpPattern(options.excludes) :
     options && 'exclude' in options ? regexpPattern(options.exclude) :
-    /\/node_modules\//;
-  return (!includes || includes.test(filename)) && !(excludes && excludes.test(filename));
+    nodeModulesRegexp;
+  if (includes && includes.test(filename)) {
+    return true;
+  }
+  if (excludes && excludes.test(filename)) {
+    return false;
+  }
+  return true;
 }
 
 // Given a null | string | RegExp | any, returns null | Regexp or throws a
diff --git a/test.sh b/test.sh
index 6d8a526..47c1126 100755
--- a/test.sh
+++ b/test.sh
@@ -39,6 +39,16 @@ echo "Test: node require hook"
 RES=$(node -e 'require("./register");require("./test/test-node-module.js")');
 if [ "$RES" != 42 ]; then echo 'Node require hook failed'; exit 1; fi;
 
+# Test node require hook: exclude override
+echo "Test: node require hook with excludes override"
+RES=$(node -e 'require("./register")({excludes: null});require("./test/node_modules/test-node-module.js")');
+if [ "$RES" != 42 ]; then echo 'Node require hook: exclude override failed'; exit 1; fi;
+
+# Test node require hook: include priority
+echo "Test: node require hook with include priority"
+RES=$(node -e 'require("./register")({includes: "test-node-module.js"});require("./test/node_modules/test-node-module.js")');
+if [ "$RES" != 42 ]; then echo 'Node require hook: include priority failed'; exit 1; fi;
+
 # Test flow-node
 echo "Test: flow-node"
 FLOW_NODE=$(./flow-node ./test/test-node-module.js);
diff --git a/test/node_modules/test-node-module.js b/test/node_modules/test-node-module.js
new file mode 100644
index 0000000..47244aa
--- /dev/null
+++ b/test/node_modules/test-node-module.js
@@ -0,0 +1,4 @@
+// @flow
+
+var n: number = 42;
+console.log(n);