diff --git a/pkg/serverinit/serverinit.go b/pkg/serverinit/serverinit.go
index 0cd472bc4..84ce76c5a 100644
--- a/pkg/serverinit/serverinit.go
+++ b/pkg/serverinit/serverinit.go
@@ -43,7 +43,6 @@ import (
 	"camlistore.org/pkg/jsonconfig"
 	"camlistore.org/pkg/server/app"
 	"camlistore.org/pkg/types/serverconfig"
-	"camlistore.org/pkg/wkfs"
 )
 
 const camliPrefix = "/camli/"
@@ -412,7 +411,7 @@ func detectConfigChange(conf jsonconfig.Obj) error {
 // with boolean value true, the configuration is assumed to be a high-level
 // "user config" file, and transformed into a low-level config.
 func LoadFile(filename string) (*Config, error) {
-	return load(filename, nil, nil)
+	return load(filename, nil)
 }
 
 type jsonFileImpl struct {
@@ -428,7 +427,7 @@ func (f jsonFileImpl) Name() string { return f.name }
 // with boolean value true, the configuration is assumed to be a high-level
 // "user config" file, and transformed into a low-level config.
 func Load(config []byte) (*Config, error) {
-	return load("", config, func(filename string) (jsonconfig.File, error) {
+	return load("", func(filename string) (jsonconfig.File, error) {
 		if filename != "" {
 			return nil, errors.New("JSON files with includes not supported with jsonconfig.Load")
 		}
@@ -436,17 +435,7 @@ func Load(config []byte) (*Config, error) {
 	})
 }
 
-func load(filename string, rootConfig []byte, opener func(filename string) (jsonconfig.File, error)) (*Config, error) {
-	if filename == "" {
-		if rootConfig == nil || opener == nil {
-			panic("internal error")
-		}
-	} else {
-		if rootConfig != nil || opener != nil {
-			panic("internal error")
-		}
-	}
-
+func load(filename string, opener func(filename string) (jsonconfig.File, error)) (*Config, error) {
 	c := &jsonconfig.ConfigParser{Open: opener}
 	m, err := c.ReadFile(filename)
 	if err != nil {
@@ -461,20 +450,23 @@ func load(filename string, rootConfig []byte, opener func(filename string) (json
 		return conf, nil
 	}
 
+	// Check whether the high-level config uses the old names.
 	if err := detectConfigChange(obj); err != nil {
 		return nil, err
 	}
 
-	if rootConfig == nil {
-		rootConfig, err = wkfs.ReadFile(filename)
-		if err != nil {
-			return nil, fmt.Errorf("Could not read %s: %v", filename, err)
-		}
+	// Because the original high-level config might have expanded
+	// through the use of functions, we re-encode the map back to
+	// JSON here so we can unmarshal it into the hiLevelConf
+	// struct later.
+	highExpandedJSON, err := json.Marshal(m)
+	if err != nil {
+		return nil, fmt.Errorf("Can't re-marshal high-level JSON config: %v", err)
 	}
 
 	var hiLevelConf serverconfig.Config
-	if err := json.Unmarshal(rootConfig, &hiLevelConf); err != nil {
-		return nil, fmt.Errorf("Could not unmarshal %s into a serverconfig.Config: %v", filename, err)
+	if err := json.Unmarshal(highExpandedJSON, &hiLevelConf); err != nil {
+		return nil, fmt.Errorf("Could not unmarshal into a serverconfig.Config: %v", err)
 	}
 
 	conf, err = genLowLevelConfig(&hiLevelConf)
diff --git a/pkg/serverinit/serverinit_test.go b/pkg/serverinit/serverinit_test.go
index e58ad8fd3..24e907b43 100644
--- a/pkg/serverinit/serverinit_test.go
+++ b/pkg/serverinit/serverinit_test.go
@@ -33,6 +33,7 @@ import (
 	"testing"
 
 	"camlistore.org/pkg/jsonconfig"
+	"camlistore.org/pkg/osutil"
 	"camlistore.org/pkg/serverinit"
 	"camlistore.org/pkg/test"
 	"camlistore.org/pkg/types/serverconfig"
@@ -224,3 +225,31 @@ func canonicalizeGolden(t *testing.T, v []byte) []byte {
 	}
 	return v
 }
+
+func TestExpansionsInHighlevelConfig(t *testing.T) {
+	camroot, err := osutil.GoPackagePath("camlistore.org")
+	if err != nil {
+		t.Fatalf("failed to find camlistore.org GOPATH root: %v", err)
+	}
+	const keyID = "26F5ABDA"
+	os.Setenv("TMP_EXPANSION_TEST", keyID)
+	os.Setenv("TMP_EXPANSION_SECRING", filepath.Join(camroot, filepath.FromSlash("pkg/jsonsign/testdata/test-secring.gpg")))
+	conf, err := serverinit.Load([]byte(`
+{
+    "auth": "localhost",
+    "listen": ":4430",
+    "https": false,
+    "identity": ["_env", "${TMP_EXPANSION_TEST}"],
+    "identitySecretRing": ["_env", "${TMP_EXPANSION_SECRING}"],
+    "googlecloudstorage": ":camlistore-dev-blobs",
+    "kvIndexFile": "/tmp/camli-index.kvdb"
+}
+`))
+	if err != nil {
+		t.Fatal(err)
+	}
+	got := fmt.Sprintf("%#v", conf)
+	if !strings.Contains(got, keyID) {
+		t.Errorf("Expected key %q in resulting low-level config. Got: %s", got)
+	}
+}