diff --git a/circle.yml b/circle.yml
index 13f3754587..f8aa602da3 100644
--- a/circle.yml
+++ b/circle.yml
@@ -4,6 +4,7 @@ test:
         - cd ../testproject && mbed compile -m K64F -t GCC_ARM -j 0 --source=. --source=mbed-os/TESTS/integration/basic
         - cd ../testproject && mbed compile -m K64F -t GCC_ARM -j 0 --tests
         - cd ../testproject && mbed compile -m LPC1768 -t GCC_ARM -j 0 --source=. --source=mbed-os/TESTS/integration/basic
+        - cd ../testproject && export PYTHONPATH=$(readlink -f mbed-os) && python mbed-os/tools/test/config_test/config_test.py
 
 dependencies:
     pre:
diff --git a/tools/test/config_test/config_test.py b/tools/test/config_test/config_test.py
new file mode 100644
index 0000000000..a520c2006d
--- /dev/null
+++ b/tools/test/config_test/config_test.py
@@ -0,0 +1,94 @@
+"""
+mbed SDK
+Copyright (c) 2011-2016 ARM Limited
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+"""
+
+from tools.build_api import get_config
+from tools.config import ConfigException
+import os, sys
+
+# Compare the output of config against a dictionary of known good results
+def compare_config(cfg, expected):
+    try:
+        for k in cfg:
+            if cfg[k].value != expected[k]:
+                return "'%s': expected '%s', got '%s'" % (k, expected[k], cfg[k].value)
+    except KeyError:
+        return "Unexpected key '%s' in configuration data" % k
+    for k in expected:
+        if k != "desc" and k != "expected_macros" and not k in cfg:
+            return "Expected key '%s' was not found in configuration data" % k
+    return ""
+
+def test_tree(full_name, name):
+    failed = 0
+    sys.path.append(full_name)
+    if "test_data" in sys.modules:
+       del sys.modules["test_data"]
+    import test_data
+    for target, expected in test_data.expected_results.items():
+        sys.stdout.write("%s:'%s'(%s) " % (name, expected["desc"], target))
+        sys.stdout.flush()
+        err_msg = None
+        try:
+            cfg, macros = get_config(full_name, target, "GCC_ARM")
+        except ConfigException as e:
+            err_msg = e.message
+        if err_msg:
+            if expected.has_key("exception_msg"):
+                if err_msg.find(expected["exception_msg"]) == -1:
+                    print "FAILED!"
+                    sys.stderr.write("    Unexpected error message!\n")
+                    sys.stderr.write("    Expected: '%s'\n" % expected["exception_msg"])
+                    sys.stderr.write("    Got: '%s'\n" % err_msg)
+                    failed += 1
+                else:
+                    print "OK"
+            else:
+                print "FAILED!"
+                sys.stderr.write("    Error while getting configuration!\n")
+                sys.stderr.write("    " + err_msg + "\n")
+                failed += 1
+        else:
+            res = compare_config(cfg, expected)
+            if res:
+                print "FAILED!"
+                sys.stdout.write("    " + res + "\n")
+                failed += 1
+            else:
+                expected_macros = expected.get("expected_macros", None)
+                if expected_macros is not None:
+                    if sorted(expected_macros) != sorted(macros):
+                        print "FAILED!"
+                        sys.stderr.write("    List of macros doesn't match\n")
+                        sys.stderr.write("    Expected: '%s'\n" % ",".join(sorted(expected_macros)))
+                        sys.stderr.write("    Got: '%s'\n" % ",".join(sorted(expected_macros)))
+                        failed += 1
+                    else:
+                        print "OK"
+                else:
+                    print "OK"
+    sys.path.remove(full_name)
+    return failed
+
+failed = 0
+root_dir = os.path.abspath(os.path.dirname(__file__))
+tlist = sorted(os.listdir(root_dir), key = lambda e: int(e[4:]) if e.startswith('test') else -1)
+for test_name in tlist:
+    full_name = os.path.join(root_dir, test_name)
+    if os.path.isdir(full_name) and test_name.startswith('test'):
+        failed += test_tree(full_name, test_name)
+sys.exit(failed)
+
diff --git a/tools/test/config_test/test01/mbed_app.json b/tools/test/config_test/test01/mbed_app.json
new file mode 100644
index 0000000000..1c6bdcf127
--- /dev/null
+++ b/tools/test/config_test/test01/mbed_app.json
@@ -0,0 +1,43 @@
+{
+    "custom_targets": {
+        "b1": {
+            "core": "Cortex-M0",
+            "extra_labels": [],
+            "config": {
+                "base1_1": "v_base1_1_b1",
+                "base1_2": "v_base1_2_b1",
+                "base1_3": "v_base1_3_b1"
+            }
+        },
+        "d1": {
+            "inherits": ["b1"],
+            "config": {
+                "derived1": "v_derived1_d1",
+                "derived2": "v_derived2_d1"
+            },
+            "overrides": {
+                "base1_1": "v_base1_1_d1",
+                "base1_2": "v_base1_2_d1"
+            }
+        },
+        "b2": {
+            "config": {
+                "base2_1": "v_base2_1_b2",
+                "base2_2": "v_base2_2_b2"
+            }
+        },
+        "f": {
+            "inherits": ["b2", "d1"],
+            "config": {
+                "f1_1": "v_f1_1_f",
+                "f1_2": "v_f1_2_f"
+            },
+            "overrides": {
+                "base2_1": "v_base2_1_f",
+                "base1_1": "v_base1_1_f",
+                "derived2": "v_derived2_f",
+                "f1_1": "v_f1_1_f_override"
+            }
+        }
+    }
+}
diff --git a/tools/test/config_test/test01/test_data.py b/tools/test/config_test/test01/test_data.py
new file mode 100644
index 0000000000..878ae93690
--- /dev/null
+++ b/tools/test/config_test/test01/test_data.py
@@ -0,0 +1,46 @@
+# Test for configuration data defined in targets
+# A base target (B1) defines 3 configuration parameters (base1_1, base1_2 and base1_3)
+# A derived target (D1) inherits drom B1 and defines one configuration parameters (derived1 and derived2) and overrides base1_1 and base1_2
+# Another base target (B2) defines its own configuration parameters (base2_1 and base2_2)
+# The final target F derives from B2 and D1, defines two configuration paramaters (f1_1 and f1_2)
+# and overrides base2_1, base1_1, derived2 and its own configuration parameter f1_1 (which is legal)
+# Final result:
+#     base1_1 must have the value defined in F
+#     base1_2 must have the value defined in D1
+#     base1_3 must have the value defined in B1
+#     derived1 must have the value defined in D1
+#     derived2 must have the value defined in F
+#     base2_1 must have the value defined in F
+#     base2_2 must have the value defined in B2
+#     f1_1 must have the value defined and then overriden in F
+#     f1_2 must have the value defined in F
+
+expected_results = {
+    "f": {
+        "desc": "test multiple target inheritance",
+        "target.base1_1": "v_base1_1_f",
+        "target.base1_2": "v_base1_2_d1",
+        "target.base1_3": "v_base1_3_b1",
+        "target.derived1": "v_derived1_d1",
+        "target.derived2": "v_derived2_f",
+        "target.base2_1": "v_base2_1_f",
+        "target.base2_2": "v_base2_2_b2",
+        "target.f1_1": "v_f1_1_f_override",
+        "target.f1_2": "v_f1_2_f"
+    },
+    "b1": {
+        "desc": "test with a single base target, no inheritance",
+        "target.base1_1": "v_base1_1_b1",
+        "target.base1_2": "v_base1_2_b1",
+        "target.base1_3": "v_base1_3_b1"
+    },
+    "d1": {
+        "desc": "test single target inheritance",
+        "target.base1_1": "v_base1_1_d1",
+        "target.base1_2": "v_base1_2_d1",
+        "target.base1_3": "v_base1_3_b1",
+        "target.derived1": "v_derived1_d1",
+        "target.derived2": "v_derived2_d1"
+    }
+}
+
diff --git a/tools/test/config_test/test02/mbed_app.json b/tools/test/config_test/test02/mbed_app.json
new file mode 100644
index 0000000000..00e9958c5f
--- /dev/null
+++ b/tools/test/config_test/test02/mbed_app.json
@@ -0,0 +1,47 @@
+{
+    "custom_targets": {
+        "b1": {
+            "core": "Cortex-M0",
+            "extra_labels": [],
+            "config": {
+                "base1_1": "v_base1_1_b1",
+                "base1_2": "v_base1_2_b1",
+                "base1_3": "v_base1_3_b1"
+            }
+        },
+        "d1": {
+            "inherits": ["b1"],
+            "config": {
+                "derived1": "v_derived1_d1",
+                "derived2": "v_derived2_d1"
+            },
+            "overrides": {
+                "base1_1": "v_base1_1_d1",
+                "base1_2": "v_base1_2_d1"
+            }
+        },
+        "b2": {
+            "inherits": ["b1"],
+            "config": {
+                "base2_1": "v_base2_1_b2",
+                "base2_2": "v_base2_2_b2"
+            },
+            "overrides": {
+                "base1_2": "v_base1_2_b2"
+            }
+        },
+        "f": {
+            "inherits": ["d1", "b2"],
+            "config": {
+                "f1_1": "v_f1_1_f",
+                "f1_2": "v_f1_2_f"
+            },
+            "overrides": {
+                "base2_1": "v_base2_1_f",
+                "base1_1": "v_base1_1_f",
+                "derived2": "v_derived2_f",
+                "f1_1": "v_f1_1_f_override"
+            }
+        }
+    }
+}
diff --git a/tools/test/config_test/test02/test_data.py b/tools/test/config_test/test02/test_data.py
new file mode 100644
index 0000000000..b915a17ed4
--- /dev/null
+++ b/tools/test/config_test/test02/test_data.py
@@ -0,0 +1,30 @@
+# This is similar to test1, but this time B2 also inherits from B1, which allows it to override its config data.
+# B2 also overrides base1_2, like D1.
+# The order of inheritace in F is also reversed ([D1, B2] instead of [B2, D1])
+# Since the last override of base1_2 in inheritance order is in B2, base1_2 must now
+# have the value that was overriden in B2, not in D1.
+# This test also shows that multiple inheritance works for a simple diamond shaped inheritance pattern
+
+expected_results = {
+    "f": {
+        "desc": "test multiple target inheritance (diamond shape)",
+        "target.base1_1": "v_base1_1_f",
+        "target.base1_2": "v_base1_2_b2",
+        "target.base1_3": "v_base1_3_b1",
+        "target.derived1": "v_derived1_d1",
+        "target.derived2": "v_derived2_f",
+        "target.base2_1": "v_base2_1_f",
+        "target.base2_2": "v_base2_2_b2",
+        "target.f1_1": "v_f1_1_f_override",
+        "target.f1_2": "v_f1_2_f"
+    },
+    "b2": {
+        "desc": "another single inheritance test",
+        "target.base1_1": "v_base1_1_b1",
+        "target.base1_2": "v_base1_2_b2",
+        "target.base1_3": "v_base1_3_b1",
+        "target.base2_1": "v_base2_1_b2",
+        "target.base2_2": "v_base2_2_b2"
+    }
+}
+
diff --git a/tools/test/config_test/test03/mbed_app.json b/tools/test/config_test/test03/mbed_app.json
new file mode 100644
index 0000000000..6f018e78f1
--- /dev/null
+++ b/tools/test/config_test/test03/mbed_app.json
@@ -0,0 +1,46 @@
+{
+    "custom_targets": {
+        "b1": {
+            "core": "Cortex-M0",
+            "extra_labels": [],
+            "config": {
+                "base1_1": "v_base1_1_b1",
+                "base1_2": "v_base1_2_b1",
+                "base1_3": "v_base1_3_b1"
+            }
+        },
+        "d1": {
+            "inherits": ["b1"],
+            "config": {
+                "derived1": "v_derived1_d1",
+                "derived2": "v_derived2_d1"
+            },
+            "overrides": {
+                "base1_1": "v_base1_1_d1",
+                "base1_2": "v_base1_2_d1"
+            }
+        },
+        "b2": {
+            "config": {
+                "base2_1": "v_base2_1_b2",
+                "base2_2": "v_base2_2_b2"
+            },
+            "overrides": {
+                "base1_1": "v_base1_1_b2"
+            }
+        },
+        "f": {
+            "inherits": ["b2", "d1"],
+            "config": {
+                "f1_1": "v_f1_1_f",
+                "f1_2": "v_f1_2_f"
+            },
+            "overrides": {
+                "base2_1": "v_base2_1_f",
+                "base1_1": "v_base1_1_f",
+                "derived2": "v_derived2_f",
+                "f1_1": "v_f1_1_f_override"
+            }
+        }
+    }
+}
diff --git a/tools/test/config_test/test03/test_data.py b/tools/test/config_test/test03/test_data.py
new file mode 100644
index 0000000000..3540131961
--- /dev/null
+++ b/tools/test/config_test/test03/test_data.py
@@ -0,0 +1,18 @@
+# Similar to test1, but this time B2 attempt to override base1_1. Since B2 doesn't directly inherit
+# from B1, this must raise an error
+
+expected_results = {
+    "f": {
+        "desc": "attempt to override undefined parameter in inherited target",
+        "exception_msg": "Attempt to override undefined parameter 'base1_1' in 'target:b2'"
+    },
+    "d1": {
+        "desc": "single target inheritance again",
+        "target.base1_1": "v_base1_1_d1",
+        "target.base1_2": "v_base1_2_d1",
+        "target.base1_3": "v_base1_3_b1",
+        "target.derived1": "v_derived1_d1",
+        "target.derived2": "v_derived2_d1"
+    }
+}
+
diff --git a/tools/test/config_test/test04/mbed_app.json b/tools/test/config_test/test04/mbed_app.json
new file mode 100644
index 0000000000..9c05453271
--- /dev/null
+++ b/tools/test/config_test/test04/mbed_app.json
@@ -0,0 +1,46 @@
+{
+    "custom_targets": {
+        "b1": {
+            "core": "Cortex-M0",
+            "extra_labels": [],
+            "config": {
+                "base1_1": "v_base1_1_b1",
+                "base1_2": "v_base1_2_b1",
+                "base1_3": "v_base1_3_b1"
+            }
+        },
+        "d1": {
+            "inherits": ["b1"],
+            "config": {
+                "derived1": "v_derived1_d1",
+                "derived2": "v_derived2_d1"
+            },
+            "overrides": {
+                "base1_1": "v_base1_1_d1",
+                "base1_2": "v_base1_2_d1"
+            }
+        },
+        "b2": {
+            "core": "Cortex-M0",
+            "extra_labels": [],
+            "config": {
+                "base2_1": "v_base2_1_b2",
+                "base2_2": "v_base2_2_b2",
+                "base1_1": "v_base1_1_b2"
+            }
+        },
+        "f": {
+            "inherits": ["b2", "d1"],
+            "config": {
+                "f1_1": "v_f1_1_f",
+                "f1_2": "v_f1_2_f"
+            },
+            "overrides": {
+                "base2_1": "v_base2_1_f",
+                "base1_1": "v_base1_1_f",
+                "derived2": "v_derived2_f",
+                "f1_1": "v_f1_1_f_override"
+            }
+        }
+    }
+}
diff --git a/tools/test/config_test/test04/test_data.py b/tools/test/config_test/test04/test_data.py
new file mode 100644
index 0000000000..50fbfcdb06
--- /dev/null
+++ b/tools/test/config_test/test04/test_data.py
@@ -0,0 +1,18 @@
+# Similar to test1, but this time B2 attempt to define base1_1. Since base1_1
+# is already defined in B1 and F derives from both B1 and B2, this results
+# in an error. However, when building for B2 instead of F, defining base1_1
+# should be OK.
+
+expected_results = {
+    "f": {
+        "desc": "attempt to redefine parameter in target inheritance tree",
+        "exception_msg": "Parameter name 'base1_1' defined in both 'target:b2' and 'target:b1'"
+    },
+    "b2": {
+        "desc": "it should be OK to define parameters with the same name in non-related targets",
+        "target.base2_1": "v_base2_1_b2",
+        "target.base2_2": "v_base2_2_b2",
+        "target.base1_1": "v_base1_1_b2"
+    }
+}
+
diff --git a/tools/test/config_test/test05/mbed_app.json b/tools/test/config_test/test05/mbed_app.json
new file mode 100644
index 0000000000..7e67da9e4d
--- /dev/null
+++ b/tools/test/config_test/test05/mbed_app.json
@@ -0,0 +1,35 @@
+{
+    "custom_targets": {
+        "base": {
+            "core": "Cortex-M0",
+            "extra_labels": []
+        },
+        "b1": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b1_label"]
+        },
+        "b2": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b2_label"]
+        },
+        "both": {
+            "inherits": ["b1", "b2"]
+        }
+    },
+    "config": {
+        "app1": "v_app1",
+        "app2": "v_app2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "app1": "v_app1[b1_label]"
+        },
+        "b2_label": {
+            "app2": "v_app2[b2_label]"
+        },
+        "dummy_label": {
+            "app1": "dummy.app1",
+            "app2": "dummy.app2"
+        }
+    }
+}
diff --git a/tools/test/config_test/test05/test_data.py b/tools/test/config_test/test05/test_data.py
new file mode 100644
index 0000000000..65ac4cd718
--- /dev/null
+++ b/tools/test/config_test/test05/test_data.py
@@ -0,0 +1,29 @@
+# This tests overriding configuration values based on target labels.
+# Four targets are defined:
+#    - "base" is the base target, it doesn't define any extra labels
+#    - "b1" inherits from "base" and adds the "b1_label" label
+#    - "b2" inherits from "base" and adds the "b2_label" label
+#    - "both" inherits from both "b1" and "b2", so it inherits both labels
+
+expected_results = {
+    "b1": {
+        "desc": "override values based on labels (first label)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2"
+    },
+    "b2": {
+        "desc": "override values based on labels (second label)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2[b2_label]"
+    },
+    "both": {
+        "desc": "override values based on labels (both labels)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2[b2_label]"
+    },
+    "base": {
+        "desc": "override values based on labels (no labels)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2"
+    }
+}
diff --git a/tools/test/config_test/test06/lib1/lib2/mbed_lib.json b/tools/test/config_test/test06/lib1/lib2/mbed_lib.json
new file mode 100644
index 0000000000..117a8c6ad3
--- /dev/null
+++ b/tools/test/config_test/test06/lib1/lib2/mbed_lib.json
@@ -0,0 +1,17 @@
+{
+    "name": "lib2",
+    "config": {
+        "p1": "v_p1_lib2",
+        "p2": "v_p2_lib2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib2[b1_label]",
+            "p2": "v_p2_lib2[b1_label]"
+        },
+        "b2_label": {
+            "p1": "v_p1_lib2[b2_label]",
+            "p2": "v_p2_lib2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test06/lib1/mbed_lib.json b/tools/test/config_test/test06/lib1/mbed_lib.json
new file mode 100644
index 0000000000..0481e02955
--- /dev/null
+++ b/tools/test/config_test/test06/lib1/mbed_lib.json
@@ -0,0 +1,16 @@
+{
+    "name": "lib1",
+    "config": {
+        "p1": "v_p1_lib1",
+        "p2": "v_p2_lib1",
+        "p3": "v_p3_lib1"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib1[b1_label]"
+        },
+        "b2_label": {
+            "p2": "v_p2_lib1[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test06/mbed_app.json b/tools/test/config_test/test06/mbed_app.json
new file mode 100644
index 0000000000..15462015ce
--- /dev/null
+++ b/tools/test/config_test/test06/mbed_app.json
@@ -0,0 +1,31 @@
+{
+    "custom_targets": {
+        "base": {
+            "core": "Cortex-M0",
+            "extra_labels": []
+        },
+        "b1": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b1_label"]
+        },
+        "b2": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b2_label"]
+        },
+        "both": {
+            "inherits": ["b1", "b2"]
+        }
+    },
+    "config": {
+        "app1": "v_app1",
+        "app2": "v_app2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "app1": "v_app1[b1_label]"
+        },
+        "b2_label": {
+            "app2": "v_app2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test06/test_data.py b/tools/test/config_test/test06/test_data.py
new file mode 100644
index 0000000000..0a91823b40
--- /dev/null
+++ b/tools/test/config_test/test06/test_data.py
@@ -0,0 +1,49 @@
+# This build on top of test5 by adding a few libraries with their own configurations
+# and overrides. The same targets are used for building and testing (base, b1, b2, both)
+
+expected_results = {
+   "base": {
+        "desc": "override values based on labels with libs (no labels)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1",
+        "lib2.p1": "v_p1_lib2",
+        "lib2.p2": "v_p2_lib2"
+    },
+    "b1": {
+        "desc": "override values based on labels with libs (first label)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1[b1_label]",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1",
+        "lib2.p1": "v_p1_lib2[b1_label]",
+        "lib2.p2": "v_p2_lib2[b1_label]"
+    },
+    "b2": {
+        "desc": "override values based on labels with libs (second label)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1",
+        "lib2.p1": "v_p1_lib2[b2_label]",
+        "lib2.p2": "v_p2_lib2[b2_label]"
+    },
+    # The values for lib2.p1 and lib2.p2 illustrate how overriding on multiple
+    # labels work. In lib2, both lib2.p1 and lib2.p2 are overriden for both
+    # labels (b1_label and b2_label). However, since "b2_label" is specified
+    # after "b1_label", it sets the final values of the overrides.
+    "both": {
+        "desc": "override values based on labels with libs (both labels)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1[b1_label]",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1",
+        "lib2.p1": "v_p1_lib2[b2_label]",
+        "lib2.p2": "v_p2_lib2[b2_label]"
+    },
+}
diff --git a/tools/test/config_test/test07/lib1/lib2/mbed_lib.json b/tools/test/config_test/test07/lib1/lib2/mbed_lib.json
new file mode 100644
index 0000000000..117a8c6ad3
--- /dev/null
+++ b/tools/test/config_test/test07/lib1/lib2/mbed_lib.json
@@ -0,0 +1,17 @@
+{
+    "name": "lib2",
+    "config": {
+        "p1": "v_p1_lib2",
+        "p2": "v_p2_lib2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib2[b1_label]",
+            "p2": "v_p2_lib2[b1_label]"
+        },
+        "b2_label": {
+            "p1": "v_p1_lib2[b2_label]",
+            "p2": "v_p2_lib2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test07/lib1/mbed_lib.json b/tools/test/config_test/test07/lib1/mbed_lib.json
new file mode 100644
index 0000000000..0481e02955
--- /dev/null
+++ b/tools/test/config_test/test07/lib1/mbed_lib.json
@@ -0,0 +1,16 @@
+{
+    "name": "lib1",
+    "config": {
+        "p1": "v_p1_lib1",
+        "p2": "v_p2_lib1",
+        "p3": "v_p3_lib1"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib1[b1_label]"
+        },
+        "b2_label": {
+            "p2": "v_p2_lib1[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test07/mbed_app.json b/tools/test/config_test/test07/mbed_app.json
new file mode 100644
index 0000000000..b1f7828442
--- /dev/null
+++ b/tools/test/config_test/test07/mbed_app.json
@@ -0,0 +1,36 @@
+{
+    "custom_targets": {
+        "base": {
+            "core": "Cortex-M0",
+            "extra_labels": []
+        },
+        "b1": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b1_label"]
+        },
+        "b2": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b2_label"]
+        },
+        "both": {
+            "inherits": ["b1", "b2"]
+        }
+    },
+    "config": {
+        "app1": "v_app1",
+        "app2": "v_app2"
+    },
+    "target_overrides": {
+        "*": {
+            "lib1.p3": "v_p3_lib1_app",
+            "lib1.p1": "v_p1_lib1_app",
+            "lib2.p1": "v_p1_lib2_app"
+        },
+        "b1_label": {
+            "app1": "v_app1[b1_label]"
+        },
+        "b2_label": {
+            "app2": "v_app2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test07/test_data.py b/tools/test/config_test/test07/test_data.py
new file mode 100644
index 0000000000..e9d605acfa
--- /dev/null
+++ b/tools/test/config_test/test07/test_data.py
@@ -0,0 +1,48 @@
+# This build on top of test6 by adding overrides for libs in the application
+
+expected_results = {
+   "base": {
+        "desc": "override values based on labels with libs (no labels)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2"
+    },
+    "b1": {
+        "desc": "override values based on labels with libs (first label)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b1_label]"
+    },
+    "b2": {
+        "desc": "override values based on labels with libs (second label)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b2_label]"
+    },
+    # The values for lib2.p1 and lib2.p2 illustrate how overriding on multiple
+    # labels work. In lib2, both lib2.p1 and lib2.p2 are overriden for both
+    # labels (b1_label and b2_label). However, since "b2_label" is specified
+    # after "b1_label", it sets the final values of the overrides.
+    "both": {
+        "desc": "override values based on labels with libs (both labels)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b2_label]"
+    }
+}
diff --git a/tools/test/config_test/test08/lib1/lib2/mbed_lib.json b/tools/test/config_test/test08/lib1/lib2/mbed_lib.json
new file mode 100644
index 0000000000..117a8c6ad3
--- /dev/null
+++ b/tools/test/config_test/test08/lib1/lib2/mbed_lib.json
@@ -0,0 +1,17 @@
+{
+    "name": "lib2",
+    "config": {
+        "p1": "v_p1_lib2",
+        "p2": "v_p2_lib2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib2[b1_label]",
+            "p2": "v_p2_lib2[b1_label]"
+        },
+        "b2_label": {
+            "p1": "v_p1_lib2[b2_label]",
+            "p2": "v_p2_lib2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test08/lib1/mbed_lib.json b/tools/test/config_test/test08/lib1/mbed_lib.json
new file mode 100644
index 0000000000..0481e02955
--- /dev/null
+++ b/tools/test/config_test/test08/lib1/mbed_lib.json
@@ -0,0 +1,16 @@
+{
+    "name": "lib1",
+    "config": {
+        "p1": "v_p1_lib1",
+        "p2": "v_p2_lib1",
+        "p3": "v_p3_lib1"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib1[b1_label]"
+        },
+        "b2_label": {
+            "p2": "v_p2_lib1[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test08/mbed_app.json b/tools/test/config_test/test08/mbed_app.json
new file mode 100644
index 0000000000..91d8a69e95
--- /dev/null
+++ b/tools/test/config_test/test08/mbed_app.json
@@ -0,0 +1,54 @@
+{
+    "custom_targets": {
+        "base": {
+            "core": "Cortex-M0",
+            "extra_labels": [],
+            "config": {
+                "par1": "v_par1_base",
+                "par2": "v_par2_base",
+                "par3": "v_par3_base"
+            }
+        },
+        "b1": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b1_label"],
+            "overrides": {
+                "par1": "v_par1_b1"
+            }
+        },
+        "b2": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b2_label"],
+            "overrides": {
+                "par2": "v_par2_b2"
+            }
+        },
+        "both": {
+            "inherits": ["b1", "b2"],
+            "config": {
+                "par4": "v_par4_both"
+            },
+            "overrides": {
+                "par3": "v_par3_both"
+            }
+        }
+    },
+    "config": {
+        "app1": "v_app1",
+        "app2": "v_app2"
+    },
+    "target_overrides": {
+        "*": {
+            "lib1.p3": "v_p3_lib1_app",
+            "lib1.p1": "v_p1_lib1_app",
+            "lib2.p1": "v_p1_lib2_app",
+            "target.par1": "v_par1_target_app"
+        },
+        "b1_label": {
+            "app1": "v_app1[b1_label]"
+        },
+        "b2_label": {
+            "app2": "v_app2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test08/test_data.py b/tools/test/config_test/test08/test_data.py
new file mode 100644
index 0000000000..141bf39725
--- /dev/null
+++ b/tools/test/config_test/test08/test_data.py
@@ -0,0 +1,58 @@
+# This build on top of test7 by adding some configuration values in targets
+# and overriding them in the application
+
+expected_results = {
+   "base": {
+        "desc": "override values based on labels with libs and target params (no labels)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_base",
+        "target.par3": "v_par3_base"
+    },
+    "b1": {
+        "desc": "override values based on labels with libs and target params (first label)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b1_label]",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_base",
+        "target.par3": "v_par3_base"
+    },
+    "b2": {
+        "desc": "override values based on labels with libs and target params (second label)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b2_label]",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_b2",
+        "target.par3": "v_par3_base"
+    },
+    "both": {
+        "desc": "override values based on labels with libs and target params (both labels)",
+        "app.app1": "v_app1[b1_label]",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b2_label]",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_b2",
+        "target.par3": "v_par3_both",
+        "target.par4": "v_par4_both"
+    }
+}
diff --git a/tools/test/config_test/test09/lib1/lib2/mbed_lib.json b/tools/test/config_test/test09/lib1/lib2/mbed_lib.json
new file mode 100644
index 0000000000..117a8c6ad3
--- /dev/null
+++ b/tools/test/config_test/test09/lib1/lib2/mbed_lib.json
@@ -0,0 +1,17 @@
+{
+    "name": "lib2",
+    "config": {
+        "p1": "v_p1_lib2",
+        "p2": "v_p2_lib2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib2[b1_label]",
+            "p2": "v_p2_lib2[b1_label]"
+        },
+        "b2_label": {
+            "p1": "v_p1_lib2[b2_label]",
+            "p2": "v_p2_lib2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test09/lib1/mbed_lib.json b/tools/test/config_test/test09/lib1/mbed_lib.json
new file mode 100644
index 0000000000..0481e02955
--- /dev/null
+++ b/tools/test/config_test/test09/lib1/mbed_lib.json
@@ -0,0 +1,16 @@
+{
+    "name": "lib1",
+    "config": {
+        "p1": "v_p1_lib1",
+        "p2": "v_p2_lib1",
+        "p3": "v_p3_lib1"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib1[b1_label]"
+        },
+        "b2_label": {
+            "p2": "v_p2_lib1[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test09/mbed_app.json b/tools/test/config_test/test09/mbed_app.json
new file mode 100644
index 0000000000..9de52b63d1
--- /dev/null
+++ b/tools/test/config_test/test09/mbed_app.json
@@ -0,0 +1,32 @@
+{
+    "custom_targets": {
+        "base": {
+            "core": "Cortex-M0",
+            "extra_labels": []
+        },
+        "b1": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b1_label"]
+        },
+        "b2": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b2_label"]
+        },
+        "both": {
+            "inherits": ["b1", "b2"]
+        }
+    },
+    "config": {
+        "app1": "v_app1",
+        "app2": "v_app2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "app1": "v_app1[b1_label]",
+            "app_wrong": "v_dummy"
+        },
+        "b2_label": {
+            "app2": "v_app2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test09/test_data.py b/tools/test/config_test/test09/test_data.py
new file mode 100644
index 0000000000..04757485a9
--- /dev/null
+++ b/tools/test/config_test/test09/test_data.py
@@ -0,0 +1,34 @@
+# This build on top of test6 by adding an invalid override in mbed_app_override.json for b1_label.
+# This will prevent the configuration for working for b1 and both, but it should still
+# work for base and b2.
+
+expected_results = {
+   "base": {
+        "desc": "override values based on labels with libs (no labels)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1",
+        "lib2.p1": "v_p1_lib2",
+        "lib2.p2": "v_p2_lib2"
+    },
+    "b1": {
+        "desc": "override values based on labels with libs - invalid override (first label)",
+        "exception_msg": "Attempt to override undefined parameter 'app.app_wrong' in 'application[b1_label]"
+    },
+    "b2": {
+        "desc": "override values based on labels with libs (second label)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1",
+        "lib2.p1": "v_p1_lib2[b2_label]",
+        "lib2.p2": "v_p2_lib2[b2_label]"
+    },
+    "both": {
+        "desc": "override values based on labels with libs - invalid override (both labels)",
+        "exception_msg": "Attempt to override undefined parameter 'app.app_wrong' in 'application[b1_label]"
+    },
+}
diff --git a/tools/test/config_test/test10/lib1/lib2/mbed_lib.json b/tools/test/config_test/test10/lib1/lib2/mbed_lib.json
new file mode 100644
index 0000000000..117a8c6ad3
--- /dev/null
+++ b/tools/test/config_test/test10/lib1/lib2/mbed_lib.json
@@ -0,0 +1,17 @@
+{
+    "name": "lib2",
+    "config": {
+        "p1": "v_p1_lib2",
+        "p2": "v_p2_lib2"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib2[b1_label]",
+            "p2": "v_p2_lib2[b1_label]"
+        },
+        "b2_label": {
+            "p1": "v_p1_lib2[b2_label]",
+            "p2": "v_p2_lib2[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test10/lib1/mbed_lib.json b/tools/test/config_test/test10/lib1/mbed_lib.json
new file mode 100644
index 0000000000..0481e02955
--- /dev/null
+++ b/tools/test/config_test/test10/lib1/mbed_lib.json
@@ -0,0 +1,16 @@
+{
+    "name": "lib1",
+    "config": {
+        "p1": "v_p1_lib1",
+        "p2": "v_p2_lib1",
+        "p3": "v_p3_lib1"
+    },
+    "target_overrides": {
+        "b1_label": {
+            "p1": "v_p1_lib1[b1_label]"
+        },
+        "b2_label": {
+            "p2": "v_p2_lib1[b2_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test10/mbed_app.json b/tools/test/config_test/test10/mbed_app.json
new file mode 100644
index 0000000000..2378db8a3e
--- /dev/null
+++ b/tools/test/config_test/test10/mbed_app.json
@@ -0,0 +1,58 @@
+{
+    "custom_targets": {
+        "base": {
+            "core": "Cortex-M0",
+            "extra_labels": [],
+            "config": {
+                "par1": "v_par1_base",
+                "par2": "v_par2_base",
+                "par3": "v_par3_base"
+            }
+        },
+        "b1": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b1_label"],
+            "overrides": {
+                "par1": "v_par1_b1"
+            }
+        },
+        "b2": {
+            "inherits": ["base"],
+            "extra_labels_add": ["b2_label"],
+            "overrides": {
+                "par2": "v_par2_b2"
+            }
+        },
+        "both": {
+            "inherits": ["b1", "b2"],
+            "config": {
+                "par4": "v_par4_both"
+            },
+            "overrides": {
+                "par3": "v_par3_both"
+            }
+        }
+    },
+    "config": {
+        "app1": "v_app1",
+        "app2": "v_app2"
+    },
+    "target_overrides": {
+        "*": {
+            "lib1.p3": "v_p3_lib1_app",
+            "lib1.p1": "v_p1_lib1_app",
+            "lib2.p1": "v_p1_lib2_app",
+            "target.par1": "v_par1_target_app"
+        },
+        "b1_label": {
+            "app.app1": "v_app1[b1_label_label]"
+        },
+        "b2_label": {
+            "app2": "v_app2[b2_label]"
+        },
+        "both": {
+            "target.par4": "v_par4_app[both_label]",
+            "lib2.p1": "v_p1_lib2_app[both_label]"
+        }
+    }
+}
diff --git a/tools/test/config_test/test10/test_data.py b/tools/test/config_test/test10/test_data.py
new file mode 100644
index 0000000000..7ed62e2ad9
--- /dev/null
+++ b/tools/test/config_test/test10/test_data.py
@@ -0,0 +1,57 @@
+# This builds on top of test8 by adding target-conditional overrides in mbed_app_config.json.
+
+expected_results = {
+   "base": {
+        "desc": "override values based on labels with libs, target params and target overrides (no labels)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_base",
+        "target.par3": "v_par3_base"
+    },
+    "b1": {
+        "desc": "override values based on labels with libs, target params and target overrides (first label)",
+        "app.app1": "v_app1[b1_label_label]",
+        "app.app2": "v_app2",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b1_label]",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_base",
+        "target.par3": "v_par3_base"
+    },
+    "b2": {
+        "desc": "override values based on labels with libs, target params and target overrides (second label)",
+        "app.app1": "v_app1",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2[b2_label]",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_b2",
+        "target.par3": "v_par3_base"
+    },
+    "both": {
+        "desc": "override values based on labels with libs, target params and target overrides (both labels)",
+        "app.app1": "v_app1[b1_label_label]",
+        "app.app2": "v_app2[b2_label]",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1[b2_label]",
+        "lib1.p3": "v_p3_lib1_app",
+        "lib2.p1": "v_p1_lib2_app[both_label]",
+        "lib2.p2": "v_p2_lib2[b2_label]",
+        "target.par1": "v_par1_target_app",
+        "target.par2": "v_par2_b2",
+        "target.par3": "v_par3_both",
+        "target.par4": "v_par4_app[both_label]"
+    }
+}
diff --git a/tools/test/config_test/test11/lib1/lib2/mbed_lib.json b/tools/test/config_test/test11/lib1/lib2/mbed_lib.json
new file mode 100644
index 0000000000..110332c50a
--- /dev/null
+++ b/tools/test/config_test/test11/lib1/lib2/mbed_lib.json
@@ -0,0 +1,7 @@
+{
+    "name": "lib2",
+    "config": {
+        "p1": "v_p1_lib2",
+        "p2": "v_p2_lib2"
+    }
+}
diff --git a/tools/test/config_test/test11/lib1/mbed_lib.json b/tools/test/config_test/test11/lib1/mbed_lib.json
new file mode 100644
index 0000000000..cbdaf70180
--- /dev/null
+++ b/tools/test/config_test/test11/lib1/mbed_lib.json
@@ -0,0 +1,14 @@
+{
+    "name": "lib1",
+    "config": {
+        "p1": "v_p1_lib1",
+        "p2": "v_p2_lib1",
+        "p3": "v_p3_lib1"
+    },
+    "target_overrides": {
+        "K64F": {
+            "p1": "v_p1_lib1[b1_label]",
+            "lib2.p1": "dummy"
+        }
+    }
+}
diff --git a/tools/test/config_test/test11/test_data.py b/tools/test/config_test/test11/test_data.py
new file mode 100644
index 0000000000..6bcaed1091
--- /dev/null
+++ b/tools/test/config_test/test11/test_data.py
@@ -0,0 +1,9 @@
+# Two libraries (lib1 and lib2) define their own configuration parameters
+# lib1 tries to override a configuration parameter in lib2, which raises an error
+
+expected_results = {
+   "K64F": {
+        "desc": "lib1 trying to override a config parameter in lib2",
+        "exception_msg": "Invalid prefix 'lib2' for parameter name 'lib2.p1' in 'library:lib1[K64F]'"
+    }
+}
diff --git a/tools/test/config_test/test12/lib1/lib2/mbed_lib.json b/tools/test/config_test/test12/lib1/lib2/mbed_lib.json
new file mode 100644
index 0000000000..110332c50a
--- /dev/null
+++ b/tools/test/config_test/test12/lib1/lib2/mbed_lib.json
@@ -0,0 +1,7 @@
+{
+    "name": "lib2",
+    "config": {
+        "p1": "v_p1_lib2",
+        "p2": "v_p2_lib2"
+    }
+}
diff --git a/tools/test/config_test/test12/lib1/mbed_lib.json b/tools/test/config_test/test12/lib1/mbed_lib.json
new file mode 100644
index 0000000000..a85bc4ab0a
--- /dev/null
+++ b/tools/test/config_test/test12/lib1/mbed_lib.json
@@ -0,0 +1,8 @@
+{
+    "name": "lib1",
+    "config": {
+        "p1": "v_p1_lib1",
+        "p2": "v_p2_lib1",
+        "p3": "v_p3_lib1"
+    }
+}
diff --git a/tools/test/config_test/test12/mbed_app.json b/tools/test/config_test/test12/mbed_app.json
new file mode 100644
index 0000000000..8caddebb07
--- /dev/null
+++ b/tools/test/config_test/test12/mbed_app.json
@@ -0,0 +1,8 @@
+{
+    "target_overrides": {
+        "K64F": {
+            "lib1.p1": "v_p1_lib1_app",
+            "lib2.p1": "v_p1_lib2_app"
+        }
+    }
+}
diff --git a/tools/test/config_test/test12/test_data.py b/tools/test/config_test/test12/test_data.py
new file mode 100644
index 0000000000..cd18cdd461
--- /dev/null
+++ b/tools/test/config_test/test12/test_data.py
@@ -0,0 +1,14 @@
+# Two libraries (lib1 and lib2) define their own configuration parameters
+# The application config doesn't have any parameters itself, it just overrides the parameter
+# named p1 from both lib1 and lib2.
+
+expected_results = {
+   "K64F": {
+        "desc": "app without its own parameters overrides parameters in other libs",
+        "lib1.p1": "v_p1_lib1_app",
+        "lib1.p2": "v_p2_lib1",
+        "lib1.p3": "v_p3_lib1",
+        "lib2.p1": "v_p1_lib2_app",
+        "lib2.p2": "v_p2_lib2"
+    }
+}
diff --git a/tools/test/config_test/test13/lib1/mbed_lib.json b/tools/test/config_test/test13/lib1/mbed_lib.json
new file mode 100644
index 0000000000..579597839f
--- /dev/null
+++ b/tools/test/config_test/test13/lib1/mbed_lib.json
@@ -0,0 +1,3 @@
+{
+    "name": "lib1"
+}
diff --git a/tools/test/config_test/test13/lib2/mbed_lib.json b/tools/test/config_test/test13/lib2/mbed_lib.json
new file mode 100644
index 0000000000..579597839f
--- /dev/null
+++ b/tools/test/config_test/test13/lib2/mbed_lib.json
@@ -0,0 +1,3 @@
+{
+    "name": "lib1"
+}
diff --git a/tools/test/config_test/test13/test_data.py b/tools/test/config_test/test13/test_data.py
new file mode 100644
index 0000000000..7d394e84ec
--- /dev/null
+++ b/tools/test/config_test/test13/test_data.py
@@ -0,0 +1,8 @@
+# Create two libraries named "lib1", which must raise an error
+
+expected_results = {
+    "K64F": {
+        "desc": "attempt to configure two libraries named 'lib1'",
+        "exception_msg": "Library name 'lib1' is not unique"
+    }
+}
diff --git a/tools/test/config_test/test14/mbed_app.json b/tools/test/config_test/test14/mbed_app.json
new file mode 100644
index 0000000000..59cbd29e35
--- /dev/null
+++ b/tools/test/config_test/test14/mbed_app.json
@@ -0,0 +1,3 @@
+{
+    "unknown_key": "dummy_value"
+}
diff --git a/tools/test/config_test/test14/test_data.py b/tools/test/config_test/test14/test_data.py
new file mode 100644
index 0000000000..1db33cd6d4
--- /dev/null
+++ b/tools/test/config_test/test14/test_data.py
@@ -0,0 +1,8 @@
+# Put an invalid key in the application configuration
+
+expected_results = {
+    "K64F": {
+        "desc": "invalid key in mbed_app_config.json",
+        "exception_msg": "Unknown key(s)"
+    }
+}
diff --git a/tools/test/config_test/test15/lib1/mbed_lib.json b/tools/test/config_test/test15/lib1/mbed_lib.json
new file mode 100644
index 0000000000..bd529cf366
--- /dev/null
+++ b/tools/test/config_test/test15/lib1/mbed_lib.json
@@ -0,0 +1,4 @@
+{
+    "name": "lib1",
+    "unknown_key": "dummy_value"
+}
diff --git a/tools/test/config_test/test15/test_data.py b/tools/test/config_test/test15/test_data.py
new file mode 100644
index 0000000000..4518f78783
--- /dev/null
+++ b/tools/test/config_test/test15/test_data.py
@@ -0,0 +1,8 @@
+# Put an invalid key in the library configuration
+
+expected_results = {
+    "K64F": {
+        "desc": "invalid key in mbed_lib_config.json",
+        "exception_msg": "Unknown key(s)"
+    }
+}
diff --git a/tools/test/config_test/test16/lib1/mbed_lib.json b/tools/test/config_test/test16/lib1/mbed_lib.json
new file mode 100644
index 0000000000..705f737791
--- /dev/null
+++ b/tools/test/config_test/test16/lib1/mbed_lib.json
@@ -0,0 +1,4 @@
+{
+    "name": "lib1",
+    "macros": ["LIB1_1=1", "LIB1_2"]
+}
diff --git a/tools/test/config_test/test16/lib2/mbed_lib.json b/tools/test/config_test/test16/lib2/mbed_lib.json
new file mode 100644
index 0000000000..10b20f81c7
--- /dev/null
+++ b/tools/test/config_test/test16/lib2/mbed_lib.json
@@ -0,0 +1,4 @@
+{
+    "name": "lib2",
+    "macros": ["LIB2_1=5", "LIB1_2"]
+}
diff --git a/tools/test/config_test/test16/mbed_app.json b/tools/test/config_test/test16/mbed_app.json
new file mode 100644
index 0000000000..f50a39bfd1
--- /dev/null
+++ b/tools/test/config_test/test16/mbed_app.json
@@ -0,0 +1,3 @@
+{
+    "macros": ["APP1=10", "APP2", "LIB2_1=5"]
+}
diff --git a/tools/test/config_test/test16/test_data.py b/tools/test/config_test/test16/test_data.py
new file mode 100644
index 0000000000..0032c138ae
--- /dev/null
+++ b/tools/test/config_test/test16/test_data.py
@@ -0,0 +1,12 @@
+# Macro test: defined macros in the top level app and 2 libs, check if they
+# are reported properly.
+# The app defines one macro with value the same as lib2, while lib2 defined
+# the same macro without value as lib1. Since the definitions are comptabile,
+# no error should be raised
+
+expected_results = {
+    "K64F": {
+        "desc": "test macro definitions",
+        "expected_macros": ["APP1=10", "APP2", "LIB1_1=1","LIB1_2", "LIB2_1=5"]
+    }
+}
diff --git a/tools/test/config_test/test17/lib1/mbed_lib.json b/tools/test/config_test/test17/lib1/mbed_lib.json
new file mode 100644
index 0000000000..705f737791
--- /dev/null
+++ b/tools/test/config_test/test17/lib1/mbed_lib.json
@@ -0,0 +1,4 @@
+{
+    "name": "lib1",
+    "macros": ["LIB1_1=1", "LIB1_2"]
+}
diff --git a/tools/test/config_test/test17/lib2/mbed_lib.json b/tools/test/config_test/test17/lib2/mbed_lib.json
new file mode 100644
index 0000000000..10b20f81c7
--- /dev/null
+++ b/tools/test/config_test/test17/lib2/mbed_lib.json
@@ -0,0 +1,4 @@
+{
+    "name": "lib2",
+    "macros": ["LIB2_1=5", "LIB1_2"]
+}
diff --git a/tools/test/config_test/test17/mbed_app.json b/tools/test/config_test/test17/mbed_app.json
new file mode 100644
index 0000000000..89eb28c245
--- /dev/null
+++ b/tools/test/config_test/test17/mbed_app.json
@@ -0,0 +1,3 @@
+{
+    "macros": ["APP1=10", "APP2", "LIB2_1=10"]
+}
diff --git a/tools/test/config_test/test17/test_data.py b/tools/test/config_test/test17/test_data.py
new file mode 100644
index 0000000000..b55da016d1
--- /dev/null
+++ b/tools/test/config_test/test17/test_data.py
@@ -0,0 +1,9 @@
+# Build on top of test16
+# Adds an invalid macro redefinition in the app
+
+expected_results = {
+    "K64F": {
+        "desc": "test invalid macro re-definition in the app",
+        "exception_msg": "Macro 'LIB2_1' defined in both 'library:lib2' and 'application' with incompatible values"
+    }
+}
diff --git a/tools/test/config_test/test18/lib1/mbed_lib.json b/tools/test/config_test/test18/lib1/mbed_lib.json
new file mode 100644
index 0000000000..705f737791
--- /dev/null
+++ b/tools/test/config_test/test18/lib1/mbed_lib.json
@@ -0,0 +1,4 @@
+{
+    "name": "lib1",
+    "macros": ["LIB1_1=1", "LIB1_2"]
+}
diff --git a/tools/test/config_test/test18/lib2/mbed_lib.json b/tools/test/config_test/test18/lib2/mbed_lib.json
new file mode 100644
index 0000000000..3db0d018cc
--- /dev/null
+++ b/tools/test/config_test/test18/lib2/mbed_lib.json
@@ -0,0 +1,4 @@
+{
+    "name": "lib2",
+    "macros": ["LIB2_1=5", "LIB1_2=3"]
+}
diff --git a/tools/test/config_test/test18/mbed_app.json b/tools/test/config_test/test18/mbed_app.json
new file mode 100644
index 0000000000..f50a39bfd1
--- /dev/null
+++ b/tools/test/config_test/test18/mbed_app.json
@@ -0,0 +1,3 @@
+{
+    "macros": ["APP1=10", "APP2", "LIB2_1=5"]
+}
diff --git a/tools/test/config_test/test18/test_data.py b/tools/test/config_test/test18/test_data.py
new file mode 100644
index 0000000000..e228833381
--- /dev/null
+++ b/tools/test/config_test/test18/test_data.py
@@ -0,0 +1,8 @@
+# Like test17, but this time the invalid re-definition is in lib2, not in the app
+
+expected_results = {
+    "K64F": {
+        "desc": "test invalid macro re-definition in a library",
+        "exception_msg": "defined in both"
+    }
+}
diff --git a/tools/test/config_test/test19/mbed_app.json b/tools/test/config_test/test19/mbed_app.json
new file mode 100644
index 0000000000..6970156cd2
--- /dev/null
+++ b/tools/test/config_test/test19/mbed_app.json
@@ -0,0 +1,4 @@
+{
+    "macros": [],
+    "invalid_key": "invalid_value"
+}
diff --git a/tools/test/config_test/test19/test_data.py b/tools/test/config_test/test19/test_data.py
new file mode 100644
index 0000000000..40e250b865
--- /dev/null
+++ b/tools/test/config_test/test19/test_data.py
@@ -0,0 +1,8 @@
+# Test that invalid keys in application configuration are not allowed
+
+expected_results = {
+    "K64F": {
+        "desc": "test invalid key in application config",
+        "exception_msg": "Unknown key(s) 'invalid_key'"
+    }
+}
diff --git a/tools/test/config_test/test20/lib1/mbed_lib.json b/tools/test/config_test/test20/lib1/mbed_lib.json
new file mode 100644
index 0000000000..a42cdd3eba
--- /dev/null
+++ b/tools/test/config_test/test20/lib1/mbed_lib.json
@@ -0,0 +1,5 @@
+{
+    "name": "lib1",
+    "macros": [],
+    "invalid_key": "invalid_value"
+}
diff --git a/tools/test/config_test/test20/test_data.py b/tools/test/config_test/test20/test_data.py
new file mode 100644
index 0000000000..7e9f6461b9
--- /dev/null
+++ b/tools/test/config_test/test20/test_data.py
@@ -0,0 +1,8 @@
+# Like test19, but this time check invalid key in a library configuration
+
+expected_results = {
+    "K64F": {
+        "desc": "test invalid key in lib config",
+        "exception_msg": "Unknown key(s) 'invalid_key'"
+    }
+}