diff --git a/index.js b/index.js
index cdf3bc9..d200b64 100644
--- a/index.js
+++ b/index.js
@@ -19,5 +19,7 @@ var initJspm = require('./src/init');
 initJspm.$inject = ['config.files', 'config.basePath', 'config.jspm', 'config.client', 'emitter'];
 
 module.exports = {
-  'framework:jspm': ['factory', initJspm]
+  'preprocessor:jspm': ['factory', require('./src/preprocessor')],
+  'framework:jspm': ['factory', initJspm],
+  'reporter:jspm': ['type', require('./src/reporter')]
 };
diff --git a/package.json b/package.json
index 27d8d5b..fa6da17 100644
--- a/package.json
+++ b/package.json
@@ -27,7 +27,12 @@
     "url": "git@github.com:Workiva/karma-jspm.git"
   },
   "dependencies": {
-    "glob": "~3.2"
+    "glob": "~3.2",
+    "inline-source-map-comment": "^1.0.5",
+    "istanbul": "^0.4.3",
+    "karma-coverage": "^1.0.0",
+    "minimatch": "^3.0.0",
+    "remap-istanbul": "^0.6.3"
   },
   "devDependencies": {
     "gulp": "^3.8.7",
diff --git a/src/adapter.js b/src/adapter.js
index 1268629..80e9668 100644
--- a/src/adapter.js
+++ b/src/adapter.js
@@ -47,6 +47,19 @@
             System.bundles = [];
         }
 
+        var systemInstantiate = System.instantiate;
+        var http = location.protocol;
+        var slashes = http.concat('//');
+        var host = slashes.concat(window.location.host) + '/base/';
+        System.instantiate = function(load) {
+            var fileKey = load.address.replace(host, '');
+            if (karma.config.jspm.coverageFiles[fileKey]) {
+                var re = new RegExp('file://' + karma.config.jspm.basePath + '/','g');
+                load.source = karma.config.jspm.coverageFiles[fileKey].content.replace(re, host);
+            }
+            return systemInstantiate.call(SystemJS, load);
+        }
+
         // Load everything specified in loadFiles in the specified order
         var promiseChain = Promise.resolve();
         for (var i = 0; i < karma.config.jspm.expandedFiles.length; i++) {
diff --git a/src/preprocessor.js b/src/preprocessor.js
new file mode 100644
index 0000000..ab0f582
--- /dev/null
+++ b/src/preprocessor.js
@@ -0,0 +1,105 @@
+var fs = require('fs')
+var jspm = require('jspm')
+var istanbul = require('istanbul')
+var rimraf = require('rimraf')
+var inlineSourceMap = require('inline-source-map-comment')
+
+function getFileKey(filename, basePath) {
+  if(!basePath) throw new Error('Please supply a base path!')
+  return filename.replace(basePath + '/', '')
+}
+
+function getOSFilePath(filename) {
+  return filename.replace('file://', '')
+}
+
+function CoveragePreprocessor(basePath, client, reporters, helper) {
+  // if coverage reporter is not used, do not preprocess the files
+  if (!helper._.includes(reporters, 'jspm')) {
+    return function (content, _, done) {
+      done(content)
+    }
+  }
+
+  // create a jspm namespace to pass data to the browsers
+  if (!client.jspm) client.jspm = {}
+  // store instrumented sources to be executed by browser
+  client.jspm.coverageFiles = {}
+  // store basePath used to generate the key for each source in the obj above
+  client.jspm.basePath = basePath
+  // temp folder to store instrumented files for sourcemap remapping
+  client.jspm.tempDirectory = basePath + '/__karma-jspm-tmp__/'
+
+  // make temp directory
+  var tempDirectory = client.jspm.tempDirectory
+  if (!fs.existsSync(tempDirectory)) fs.mkdirSync(tempDirectory)
+
+  // create systemjs hook to allow Istanbul to instrument transpiled sources
+  var instrument = new istanbul.Instrumenter()
+  var systemJS = new jspm.Loader()
+  var systemInstantiate = systemJS.instantiate
+  // "instantiate" is the hook that provides the transpiled source
+  systemJS.instantiate = function(load) {
+    try {
+      // create a unique key to store the sources of modules for the browser
+      var fileKey = getFileKey(getOSFilePath(load.address), basePath)
+      // exclude the dependency modules (i.e. libraries) from instrumentation
+      if (client.jspm.coverageFiles[fileKey]) {
+        var filename
+        // arrange sourcemaps
+        if (load.metadata.sourceMap) {
+          // put file's transpiled counterpart in temp folder
+          filename = tempDirectory + encodeURIComponent(fileKey)
+          // keeping sourcesContent causes duplicate reports
+          delete load.metadata.sourceMap.sourcesContent
+          // this is the file being "instrumented"
+          load.metadata.sourceMap.file = tempDirectory + encodeURIComponent(fileKey)
+          // removing "file://" from paths
+          load.metadata.sourceMap.sources = load.metadata.sourceMap.sources.map(
+            filename => getOSFilePath(filename)
+          )
+          // write transpiled file with an inlined-sourceMap to temp directory
+          fs.writeFileSync(
+            filename,
+            load.source  + '\n' + inlineSourceMap(load.metadata.sourceMap)
+          )
+        } else {
+          // keep file as is since it doesn't have a sourcemap to be remaped
+          filename = getOSFilePath(load.address)
+        }
+        // instrument with istanbul
+        client.jspm.coverageFiles[fileKey] = instrument.instrumentSync(
+          load.source,
+          // make the path-like file key into something that can be used as a name
+          filename
+        )
+      }
+    } catch (err) {
+      console.log(err)
+      // remove temp directory since something went wrong
+      rimraf.sync(tempDirectory)
+    }
+    // call the original "instantiate" hook function
+    return systemInstantiate.call(systemJS, load)
+  }
+
+  return function (content, file, done) {
+    // only files to be instrumented pass through here
+    // store this information to allow "instantiate" to exclude
+    // dependency modules (i.e. libraries)
+    client.jspm.coverageFiles[getFileKey(file.path, basePath)] = true
+    // import modules
+    systemJS.import(file.path).then(function () {
+      done(content)
+    }).catch(function(err) {
+      console.log(err)
+      // remove temp directory since something went wrong
+      rimraf.sync(tempDirectory)
+    })
+  }
+}
+
+CoveragePreprocessor.$inject = ['config.basePath','config.client','config.reporters','helper']
+
+// PUBLISH
+module.exports = CoveragePreprocessor
diff --git a/src/reporter.js b/src/reporter.js
new file mode 100644
index 0000000..36f2144
--- /dev/null
+++ b/src/reporter.js
@@ -0,0 +1,32 @@
+var fs = require('fs')
+var jspm = require('jspm')
+var istanbul = require('istanbul')
+var rimraf = require('rimraf')
+var remapIstanbul = require('remap-istanbul')
+var karmaCoverageReport = require('karma-coverage/lib/reporter')
+
+function CoverageReporter(rootConfig, helper, logger, emitter) {
+  var config = rootConfig.coverageReporter = rootConfig.coverageReporter || {}
+  config._onWriteReport = function (collector) {
+    try {
+      collector = remapIstanbul.remap(collector.getFinalCoverage())
+    } catch(e) {
+      log.error(e)
+    }
+    return collector
+  }
+  config._onExit = function (done) {
+    try {
+      rimraf.sync(rootConfig.client.jspm.tempDirectory)
+    } catch(e) {
+      log.error(e)
+    }
+    done()
+  }
+  karmaCoverageReport.call(this, rootConfig, helper, logger, emitter)
+}
+
+CoverageReporter.$inject = karmaCoverageReport.$inject
+
+// PUBLISH
+module.exports = CoverageReporter