diff --git a/Dockerfile.test b/Dockerfile.test
new file mode 100644
index 0000000..91a12d9
--- /dev/null
+++ b/Dockerfile.test
@@ -0,0 +1,8 @@
+FROM centos:latest
+
+RUN mkdir -p /app;\
+    yum install -y createrepo make rpm-build epel-release;\
+    yum install -y python2-mock
+ADD . /app
+WORKDIR /app
+ENTRYPOINT ["/usr/bin/make"]
diff --git a/README.md b/README.md
index f06e390..b0336e1 100644
--- a/README.md
+++ b/README.md
@@ -63,6 +63,10 @@ Currently the plugin does not support:
 
 Use `make test` to run some simple tests.
 
+### Testing with docker compose:
+docker-compose -f docker-compose.tests.yml run yum-s3-iam test
+docker-compose -f docker-compose.tests.yml down --volumes --rmi all
+
 ## License
 
 Apache 2.0 license. See LICENSE.
diff --git a/docker-compose.tests.yml b/docker-compose.tests.yml
new file mode 100644
index 0000000..5a0a51c
--- /dev/null
+++ b/docker-compose.tests.yml
@@ -0,0 +1,11 @@
+version: '2'
+services:
+  yum-s3-iam:
+    build:
+      context: .
+      dockerfile: Dockerfile.test
+    image: s3-iam-plugin
+    volumes:
+        - .:/app/
+    working_dir: /app/
+    network_mode: 'bridge'
diff --git a/s3iam.py b/s3iam.py
index ae3d74d..341f1d7 100755
--- a/s3iam.py
+++ b/s3iam.py
@@ -34,7 +34,7 @@
 __email__ = "julius@seporaitis.net"
 __copyright__ = "Copyright 2012, Julius Seporaitis"
 __license__ = "Apache 2.0"
-__version__ = "1.2.0"
+__version__ = "1.2.1"
 
 
 __all__ = ['requires_api_version', 'plugin_type', 'CONDUIT',
@@ -48,7 +48,7 @@
 BUFFER_SIZE = 1024 * 1024
 OPTIONAL_ATTRIBUTES = ['priority', 'base_persistdir', 'metadata_expire',
                        'skip_if_unavailable', 'keepcache', 'priority']
-UNSUPPORTED_ATTRIBUTES = ['mirrorlist', 'proxy']
+UNSUPPORTED_ATTRIBUTES = ['mirrorlist']
 
 
 def config_hook(conduit):
@@ -162,6 +162,18 @@ def __init__(self, repoid, repo):
                 msg = "%s: Unsupported attribute: %s." % (__file__, attr)
                 raise yum.plugins.PluginYumExit(msg)
 
+        proxy_config = {}
+        if 'https_proxy' in os.environ:
+            proxy_config['https'] = os.environ['https_proxy']
+        if 'http_proxy' in os.environ:
+            proxy_config['http'] = os.environ['http_proxy']
+        if repo.proxy:
+            proxy_config['https'] = proxy_config['http'] = repo.proxy
+        if proxy_config:
+            proxy = urllib2.ProxyHandler(proxy_config)
+            opener = urllib2.build_opener(proxy)
+            urllib2.install_opener(opener)
+
         self.iamrole = None
         self.grabber = None
         self.enable()
diff --git a/tests.py b/tests.py
index 4e5cda1..d2a6bd5 100644
--- a/tests.py
+++ b/tests.py
@@ -25,6 +25,7 @@
 import createrepo
 sys.path.append('.')
 import s3iam
+from mock import patch, ANY, MagicMock
 
 
 PACKAGE_NAME = 'yum-plugin-s3-iam'
@@ -167,5 +168,61 @@ def test_urls(self):
         self.assertEqual(r, 'cn-north-1')
         self.assertEqual(p, '/path')
 
+
+class S3RepositoryTest(unittest.TestCase):
+
+    def setUp(self):
+        self.orig_http_proxy = os.environ['http_proxy'] if 'http_proxy' in os.environ else None
+        os.environ['https_proxy'] = 'http://https_proxy_host:https_proxy_port'
+        self.orig_https_proxy = os.environ['https_proxy'] if 'https_proxy' in os.environ else None
+        os.environ['http_proxy'] = 'http://http_proxy_host:http_proxy_port'
+        self.repo = MagicMock(
+            baseurl = 'https://s3.cn-north-1.amazonaws.com.cn/bar/path',
+            name = 'test repo',
+            region = 'cn-north-1',
+            basecachedir = '',
+            gpgcheck = False,
+            gpgkey = None,
+            key_id = None,
+            secret_key = None,
+            enablegroups = False,
+            delegated_role = None,
+            retries = 1,
+            backoff = None,
+            delay = 0,
+            mirrorlist = None,
+            proxy = None
+            )
+
+    def tearDown(self):
+        if self.orig_https_proxy is not None:
+            os.environ['https_proxy'] = self.orig_https_proxy
+        if self.orig_http_proxy is not None:
+            os.environ['http_proxy'] = self.orig_http_proxy
+
+    @patch('s3iam.urllib2')
+    def test_config_proxy_from_env(self, urllib2_mock):
+        s3_repo = s3iam.S3Repository('repo-id', self.repo)
+        urllib2_mock.ProxyHandler.assert_called_once_with({
+            'http':'http://http_proxy_host:http_proxy_port',
+            'https':'http://https_proxy_host:https_proxy_port'
+            })
+        urllib2_mock.build_opener.assert_called_once_with(urllib2_mock.ProxyHandler.return_value)
+        urllib2_mock.install_opener.assert_called_once_with(ANY)
+
+    @patch('s3iam.urllib2')
+    def test_config_proxy_from_yum_conf(self, urllib2_mock):
+        del(os.environ['http_proxy'])
+        del(os.environ['https_proxy'])
+        self.repo.proxy = 'http://same_proxy_for_all:port'
+        s3_repo = s3iam.S3Repository('repo-id', self.repo)
+        urllib2_mock.ProxyHandler.assert_called_once_with({
+            'http':'http://same_proxy_for_all:port',
+            'https':'http://same_proxy_for_all:port'
+            })
+        urllib2_mock.build_opener.assert_called_once_with(urllib2_mock.ProxyHandler.return_value)
+        urllib2_mock.install_opener.assert_called_once_with(ANY)
+
+
 if __name__ == '__main__':
     unittest.main()