diff --git a/e2e/build_push_test.go b/e2e/build_push_test.go
index 4ffd28e..41ab45b 100644
--- a/e2e/build_push_test.go
+++ b/e2e/build_push_test.go
@@ -8,32 +8,13 @@ import (
 	"gotest.tools/v3/assert"
 )
 
-func TestBuildPush(t *testing.T) {
-	tags := []string{
-		"localhost:5000/my-repository:build-push-tag1",
-		"localhost:5000/my-repository:build-push-test",
-	}
-	labels := map[string]string{
-		"a": "a1",
-	}
+func testBuildPush(t *testing.T, envFile string, tags []string, labels map[string]string) {
 	err := removeImages(tags)
 	assert.NilError(t, err)
-	defer removeImages(tags)
-
-	err = setupLocalRegistry()
-	assert.NilError(t, err)
-	defer removeLocalRegistry()
-
-	err = loginLocalRegistry()
-	assert.NilError(t, err)
 
-	err = runActionsCommand("build-push", "testdata/build_push_tests/build_push.env")
+	err = runActionsCommand("build-push", envFile)
 	assert.NilError(t, err)
 
-	for _, tag := range tags {
-		assertBuildPushImages(t, tag, tags, labels)
-	}
-
 	err = removeImages(tags)
 	assert.NilError(t, err)
 
@@ -47,6 +28,47 @@ func TestBuildPush(t *testing.T) {
 	}
 }
 
+func TestBuildPush(t *testing.T) {
+	err := setupLocalRegistry()
+	assert.NilError(t, err)
+	defer removeLocalRegistry()
+
+	err = ensureLocalRegistryAlive()
+	assert.NilError(t, err)
+
+	// Build and push base image
+	baseTags := []string{
+		"localhost:5000/org/base:build-push-tag1",
+		"localhost:5000/org/base:build-push-test",
+	}
+	defer removeImages(baseTags)
+	testBuildPush(
+		t,
+		"testdata/build_push_tests/build_push.env",
+		baseTags,
+		map[string]string{
+			"a": "a1",
+		},
+	)
+
+	err = logoutLocalRegistry()
+	assert.NilError(t, err)
+
+	// Build and push image using base image from local registry
+	testBuildPush(
+		t,
+		"testdata/build_push_tests/build_push_from_registry.env",
+		[]string{
+			"localhost:5000/org/repo:build-push-reg-tag1",
+			"localhost:5000/org/repo:build-push-reg-test",
+		},
+		map[string]string{
+			"a": "a1",
+			"b": "b1",
+		},
+	)
+}
+
 func assertBuildPushImages(t *testing.T, image string, expectedTags []string, expectedLabels map[string]string) {
 	inspect, err := inspectImage(image)
 	assert.NilError(t, err)
@@ -57,3 +79,15 @@ func assertBuildPushImages(t *testing.T, image string, expectedTags []string, ex
 	assert.DeepEqual(t, expectedTags, repoTags)
 	assert.DeepEqual(t, expectedLabels, inspect.Config.Labels)
 }
+
+func ensureLocalRegistryAlive() error {
+	if err := loginLocalRegistry(); err != nil {
+		return err
+	}
+
+	return logoutLocalRegistry()
+}
+
+func logoutLocalRegistry() error {
+	return exec.Command("docker", "logout", "localhost:5000").Run()
+}
diff --git a/e2e/login_test.go b/e2e/login_test.go
index 8cc7bf5..05d5d43 100644
--- a/e2e/login_test.go
+++ b/e2e/login_test.go
@@ -18,6 +18,7 @@ func TestLogin(t *testing.T) {
 }
 
 func loginLocalRegistry() error {
+	// Polls as registry takes a moment to start up
 	return wait.Poll(2*time.Second, 30*time.Second, func() (bool, error) {
 		err := runActionsCommand("login", "testdata/login_test.env")
 		return err == nil, err
diff --git a/e2e/testdata/build_push_tests/build_push.env b/e2e/testdata/build_push_tests/build_push.env
index e504cc7..3aa5790 100644
--- a/e2e/testdata/build_push_tests/build_push.env
+++ b/e2e/testdata/build_push_tests/build_push.env
@@ -6,6 +6,6 @@ INPUT_LABELS=a=a1
 INPUT_REGISTRY=localhost:5000
 INPUT_USERNAME=my_user
 INPUT_PASSWORD=my_password
-INPUT_REPOSITORY=my-repository
+INPUT_REPOSITORY=org/base
 INPUT_PUSH=true
 GITHUB_REF=refs/tags/build-push-tag1
diff --git a/e2e/testdata/build_push_tests/build_push_from_registry.env b/e2e/testdata/build_push_tests/build_push_from_registry.env
new file mode 100644
index 0000000..1bf6cdc
--- /dev/null
+++ b/e2e/testdata/build_push_tests/build_push_from_registry.env
@@ -0,0 +1,11 @@
+INPUT_PATH=./testdata/build_push_tests
+INPUT_DOCKERFILE=./testdata/build_push_tests/fromreg.Dockerfile
+INPUT_TAG_WITH_REF=true
+INPUT_TAGS=build-push-reg-test
+INPUT_LABELS=b=b1
+INPUT_REGISTRY=localhost:5000
+INPUT_USERNAME=my_user
+INPUT_PASSWORD=my_password
+INPUT_REPOSITORY=org/repo
+INPUT_PUSH=true
+GITHUB_REF=refs/tags/build-push-reg-tag1
diff --git a/e2e/testdata/build_push_tests/fromreg.Dockerfile b/e2e/testdata/build_push_tests/fromreg.Dockerfile
new file mode 100644
index 0000000..fceb888
--- /dev/null
+++ b/e2e/testdata/build_push_tests/fromreg.Dockerfile
@@ -0,0 +1,3 @@
+FROM localhost:5000/org/base:build-push-test
+
+ENTRYPOINT ["echo", "hello-world build-push-from-registry"]
\ No newline at end of file