diff --git a/compose/config.py b/compose/config.py
index f87da1d8c..50ac5b606 100644
--- a/compose/config.py
+++ b/compose/config.py
@@ -64,6 +64,7 @@ def from_dictionary(dictionary, working_dir=None, filename=None):
             raise ConfigurationError('Service "%s" doesn\'t have any configuration options. All top level keys in your docker-compose.yml must map to a dictionary of configuration options.' % service_name)
         loader = ServiceLoader(working_dir=working_dir, filename=filename)
         service_dict = loader.make_service_dict(service_name, service_dict)
+        validate_paths(service_dict)
         service_dicts.append(service_dict)
 
     return service_dicts
@@ -339,12 +340,14 @@ def resolve_host_path(volume, working_dir):
 def resolve_build_path(build_path, working_dir=None):
     if working_dir is None:
         raise Exception("No working_dir passed to resolve_build_path")
+    return expand_path(working_dir, build_path)
 
-    _path = expand_path(working_dir, build_path)
-    if not os.path.exists(_path) or not os.access(_path, os.R_OK):
-        raise ConfigurationError("build path %s either does not exist or is not accessible." % _path)
-    else:
-        return _path
+
+def validate_paths(service_dict):
+    if 'build' in service_dict:
+        build_path = service_dict['build']
+        if not os.path.exists(build_path) or not os.access(build_path, os.R_OK):
+            raise ConfigurationError("build path %s either does not exist or is not accessible." % build_path)
 
 
 def merge_volumes(base, override):
diff --git a/tests/fixtures/extends/nonexistent-path-base.yml b/tests/fixtures/extends/nonexistent-path-base.yml
new file mode 100644
index 000000000..1cf9a304a
--- /dev/null
+++ b/tests/fixtures/extends/nonexistent-path-base.yml
@@ -0,0 +1,6 @@
+dnebase:
+  build: nonexistent.path
+  command: /bin/true
+  environment:
+    - FOO=1
+    - BAR=1
\ No newline at end of file
diff --git a/tests/fixtures/extends/nonexistent-path-child.yml b/tests/fixtures/extends/nonexistent-path-child.yml
new file mode 100644
index 000000000..aab11459b
--- /dev/null
+++ b/tests/fixtures/extends/nonexistent-path-child.yml
@@ -0,0 +1,8 @@
+dnechild:
+  extends:
+    file: nonexistent-path-base.yml
+    service: dnebase
+  image: busybox
+  command: /bin/true
+  environment:
+    - BAR=2
\ No newline at end of file
diff --git a/tests/unit/config_test.py b/tests/unit/config_test.py
index 97bd1b91d..12610f102 100644
--- a/tests/unit/config_test.py
+++ b/tests/unit/config_test.py
@@ -398,6 +398,21 @@ class ExtendsTest(unittest.TestCase):
 
         self.assertEqual(set(dicts[0]['volumes']), set(paths))
 
+    def test_parent_build_path_dne(self):
+        child = config.load('tests/fixtures/extends/nonexistent-path-child.yml')
+
+        self.assertEqual(child, [
+            {
+                'name': 'dnechild',
+                'image': 'busybox',
+                'command': '/bin/true',
+                'environment': {
+                    "FOO": "1",
+                    "BAR": "2",
+                },
+            },
+        ])
+
 
 class BuildPathTest(unittest.TestCase):
     def setUp(self):
@@ -407,7 +422,10 @@ class BuildPathTest(unittest.TestCase):
         options = {'build': 'nonexistent.path'}
         self.assertRaises(
             config.ConfigurationError,
-            lambda: config.make_service_dict('foo', options, 'tests/fixtures/build-path'),
+            lambda: config.from_dictionary({
+                'foo': options,
+                'working_dir': 'tests/fixtures/build-path'
+            })
         )
 
     def test_relative_path(self):