diff --git a/README.rst b/README.rst
index 7b76440..916cb8c 100644
--- a/README.rst
+++ b/README.rst
@@ -136,4 +136,4 @@ If you wish to include some static cloudformation json and have it merged with t
     includes:
       - /path/to/cloudformation.json
 
-The tool will then merge this with the generated template *overwriting* any keys in the original template that clash.
+The tool will then perform a deep merge of the includes with the generated template dictionary. Any keys or subkeys in the template dictionary that clash will have their values **overwritten** by the included dictionary or recursively merged if the value is itself a dictionary.
diff --git a/bootstrap_cfn/config.py b/bootstrap_cfn/config.py
index 149ed89..718ffdc 100644
--- a/bootstrap_cfn/config.py
+++ b/bootstrap_cfn/config.py
@@ -79,7 +79,7 @@ def process(self):
         if 'includes' in self.data:
             for inc_path in self.data['includes']:
                 inc = json.load(open(inc_path))
-                utils.dict_merge(template, inc)
+                template = utils.dict_merge(template, inc)
         return json.dumps(
             template, sort_keys=True, indent=4, separators=(',', ': '))
 
diff --git a/bootstrap_cfn/utils.py b/bootstrap_cfn/utils.py
index 4c58adc..981676d 100644
--- a/bootstrap_cfn/utils.py
+++ b/bootstrap_cfn/utils.py
@@ -57,7 +57,7 @@ def dict_merge(target, *args):
     # Merge multiple dicts
     if len(args) > 1:
         for obj in args:
-            self.dict_merge(target, obj)
+            dict_merge(target, obj)
         return target
 
     # Recursively merge dicts and set non-dict values