diff --git a/podman_compose.py b/podman_compose.py
index 3baeffb..4fdf7b9 100755
--- a/podman_compose.py
+++ b/podman_compose.py
@@ -1559,7 +1559,15 @@ def _parse_compose_file(self):
             }
         )
         compose = {}
-        for filename in files:
+        # Iterate over files primitively to allow appending to files in-loop
+        files_iter = iter(files)
+
+        while True:
+            try:
+                filename = next(files_iter)
+            except StopIteration:
+                break
+
             with open(filename, "r", encoding="utf-8") as f:
                 content = yaml.safe_load(f)
                 # log(filename, json.dumps(content, indent = 2))
@@ -1573,6 +1581,15 @@ def _parse_compose_file(self):
                 # log(filename, json.dumps(content, indent = 2))
                 content = rec_subs(content, self.environ)
                 rec_merge(compose, content)
+                # If `include` is used, append included files to files
+                if include := compose.get("include", None):
+                    files.append(*include)
+                    # As compose obj is updated and tested with every loop, not deleting `include`
+                    # from it, results in it being tested again and again, original values for
+                    # `include` be appended to `files`, and, included files be processed for ever.
+                    # Solution is to remove 'include' key from compose obj. This doesn't break
+                    # having `include` present and correctly processed in included files
+                    del compose["include"]
         resolved_services = self._resolve_profiles(
             compose.get("services", {}), set(args.profile)
         )
diff --git a/tests/include/docker-compose.base.yaml b/tests/include/docker-compose.base.yaml
new file mode 100644
index 0000000..e356a14
--- /dev/null
+++ b/tests/include/docker-compose.base.yaml
@@ -0,0 +1,7 @@
+version: '3.6'
+
+services:
+  web:
+    image: busybox
+    command: ["/bin/busybox", "httpd", "-f", "-h", ".", "-p", "8003"]
+
diff --git a/tests/include/docker-compose.yaml b/tests/include/docker-compose.yaml
new file mode 100644
index 0000000..ada2153
--- /dev/null
+++ b/tests/include/docker-compose.yaml
@@ -0,0 +1,4 @@
+version: '3.6'
+
+include:
+  - docker-compose.base.yaml
diff --git a/tests/test_podman_compose_include.py b/tests/test_podman_compose_include.py
new file mode 100644
index 0000000..c9867f5
--- /dev/null
+++ b/tests/test_podman_compose_include.py
@@ -0,0 +1,71 @@
+from pathlib import Path
+import subprocess
+
+
+def capture(command):
+    proc = subprocess.Popen(
+        command,
+        stdout=subprocess.PIPE,
+        stderr=subprocess.PIPE,
+    )
+    out, err = proc.communicate()
+    return out, err, proc.returncode
+
+
+def test_podman_compose_include():
+    """
+    Test that podman-compose can execute podman-compose -f <file> up with include
+    :return:
+    """
+    main_path = Path(__file__).parent.parent
+
+    command_up = [
+        "python3",
+        str(main_path.joinpath("podman_compose.py")),
+        "-f",
+        str(main_path.joinpath("tests", "include", "docker-compose.yaml")),
+        "up",
+        "-d",
+    ]
+
+    command_check_container = [
+        "podman",
+        "ps",
+        "-a",
+        "--filter",
+        "label=io.podman.compose.project=include",
+        "--format",
+        '"{{.Image}}"',
+    ]
+
+    command_container_id = [
+        "podman",
+        "ps",
+        "-a",
+        "--filter",
+        "label=io.podman.compose.project=include",
+        "--format",
+        '"{{.ID}}"',
+    ]
+
+    command_down = ["podman", "rm", "--force", "CONTAINER_ID"]
+
+    out, _, returncode = capture(command_up)
+    assert 0 == returncode
+    out, _, returncode = capture(command_check_container)
+    assert 0 == returncode
+    assert out == b'"docker.io/library/busybox:latest"\n'
+    # Get container ID to remove it
+    out, _, returncode = capture(command_container_id)
+    assert 0 == returncode
+    assert out != b""
+    container_id = out.decode().strip().replace('"', "")
+    command_down[3] = container_id
+    out, _, returncode = capture(command_down)
+    # cleanup test image(tags)
+    assert 0 == returncode
+    assert out != b""
+    # check container did not exists anymore
+    out, _, returncode = capture(command_check_container)
+    assert 0 == returncode
+    assert out == b""