diff --git a/.gitignore b/.gitignore
index 0b3df5ff4..4a5e7f9b9 100644
--- a/.gitignore
+++ b/.gitignore
@@ -5,4 +5,4 @@ build/
 pubspec.lock
 
 # Include .packages files from tests which are hand coded
-!test/package_graph/**/.packages
+!test/fixtures/**/.packages
diff --git a/e2e_example/.gitignore b/e2e_example/.gitignore
new file mode 100644
index 000000000..fe688680b
--- /dev/null
+++ b/e2e_example/.gitignore
@@ -0,0 +1 @@
+**/*.txt.copy
diff --git a/lib/build.dart b/lib/build.dart
index db8bc7c06..7dad2a564 100644
--- a/lib/build.dart
+++ b/lib/build.dart
@@ -3,6 +3,7 @@
 // BSD-style license that can be found in the LICENSE file.
 export 'src/asset/asset.dart';
 export 'src/asset/exceptions.dart';
+export 'src/asset/file_based.dart';
 export 'src/asset/id.dart';
 export 'src/asset/reader.dart';
 export 'src/asset/writer.dart';
diff --git a/lib/src/asset/exceptions.dart b/lib/src/asset/exceptions.dart
index 4051a1b68..9e1f8b43f 100644
--- a/lib/src/asset/exceptions.dart
+++ b/lib/src/asset/exceptions.dart
@@ -1,6 +1,7 @@
 // Copyright (c) 2016, the Dart project authors.  Please see the AUTHORS file
 // for details. All rights reserved. Use of this source code is governed by a
 // BSD-style license that can be found in the LICENSE file.
+import 'asset.dart';
 import 'id.dart';
 
 class AssetNotFoundException implements Exception {
@@ -11,3 +12,32 @@ class AssetNotFoundException implements Exception {
   @override
   String toString() => 'AssetNotFoundException: $assetId';
 }
+
+class PackageNotFoundException implements Exception {
+  final String name;
+
+  PackageNotFoundException(this.name);
+
+  @override
+  String toString() => 'PackageNotFoundException: $name';
+}
+
+class InvalidOutputException implements Exception {
+  final Asset asset;
+
+  InvalidOutputException(this.asset);
+
+  @override
+  String toString() => 'InvalidOutputException: $asset\n'
+      'Files may only be output in the root (application) package.';
+}
+
+class InvalidInputException implements Exception {
+  final AssetId assetId;
+
+  InvalidInputException(this.assetId);
+
+  @override
+  String toString() => 'InvalidInputException: $assetId\n'
+      'For package dependencies, only files under `lib` may be used as inputs.';
+}
diff --git a/lib/src/asset/file_based.dart b/lib/src/asset/file_based.dart
new file mode 100644
index 000000000..a8a8a915d
--- /dev/null
+++ b/lib/src/asset/file_based.dart
@@ -0,0 +1,77 @@
+// Copyright (c) 2016, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+import 'dart:async';
+import 'dart:convert';
+import 'dart:io';
+
+import 'package:path/path.dart' as path;
+
+import '../asset/asset.dart';
+import '../asset/exceptions.dart';
+import '../asset/id.dart';
+import '../asset/reader.dart';
+import '../asset/writer.dart';
+import '../package_graph/package_graph.dart';
+import 'exceptions.dart';
+
+/// Basic [AssetReader] which uses a [PackageGraph] to look up where to read
+/// files from disk.
+class FileBasedAssetReader implements AssetReader {
+  final PackageGraph packageGraph;
+
+  FileBasedAssetReader(this.packageGraph);
+
+  @override
+  Future<bool> hasInput(AssetId id) async {
+    _checkInput(id);
+    return _fileFor(id, packageGraph).exists();
+  }
+
+  @override
+  Future<String> readAsString(AssetId id, {Encoding encoding: UTF8}) async {
+    _checkInput(id);
+
+    var file = await _fileFor(id, packageGraph);
+    if (!await file.exists()) {
+      throw new AssetNotFoundException(id);
+    }
+    return file.readAsString(encoding: encoding);
+  }
+
+  /// Checks that [id] is a valid input, and throws an [InvalidInputException]
+  /// if its not.
+  void _checkInput(AssetId id) {
+    if (id.package != packageGraph.root.name && !id.path.startsWith('lib/')) {
+      throw new InvalidInputException(id);
+    }
+  }
+}
+
+/// Basic [AssetWriter] which uses a [PackageGraph] to look up where to write
+/// files to disk.
+class FileBasedAssetWriter implements AssetWriter {
+  final PackageGraph packageGraph;
+
+  FileBasedAssetWriter(this.packageGraph);
+
+  @override
+  Future writeAsString(Asset asset, {Encoding encoding: UTF8}) async {
+    if (asset.id.package != packageGraph.root.name) {
+      throw new InvalidOutputException(asset);
+    }
+
+    var file = _fileFor(asset.id, packageGraph);
+    await file.create(recursive: true);
+    await file.writeAsString(asset.stringContents, encoding: encoding);
+  }
+}
+
+/// Returns a [File] for [id] given [packageGraph].
+File _fileFor(AssetId id, PackageGraph packageGraph) {
+  var package = packageGraph[id.package];
+  if (package == null) {
+    throw new PackageNotFoundException(id.package);
+  }
+  return new File(path.join(package.location.toFilePath(), id.path));
+}
diff --git a/lib/src/generate/build.dart b/lib/src/generate/build.dart
index ebe78e916..dfc3f9157 100644
--- a/lib/src/generate/build.dart
+++ b/lib/src/generate/build.dart
@@ -2,33 +2,62 @@
 // for details. All rights reserved. Use of this source code is governed by a
 // BSD-style license that can be found in the LICENSE file.
 import 'dart:async';
-import 'dart:convert';
 import 'dart:io';
 
 import 'package:path/path.dart' as path;
 import 'package:yaml/yaml.dart';
 
 import '../asset/asset.dart';
+import '../asset/file_based.dart';
 import '../asset/id.dart';
 import '../asset/reader.dart';
 import '../asset/writer.dart';
 import '../builder/builder.dart';
 import '../builder/build_step_impl.dart';
+import '../package_graph/package_graph.dart';
 import 'build_result.dart';
 import 'input_set.dart';
 import 'phase.dart';
 
 /// Runs all of the [Phases] in [phaseGroups].
-Future<BuildResult> build(List<List<Phase>> phaseGroups) async {
-  try {
+///
+/// A [packageGraph] may be supplied, otherwise one will be constructed using
+/// [PackageGraph.forThisPackage]. The default functionality assumes you are
+/// running in the root directory of a package, with both a `pubspec.yaml` and
+/// `.packages` file present.
+///
+/// A [reader] and [writer] may also be supplied, which can read/write assets
+/// to arbitrary locations or file systems. By default they will write to the
+/// current directory, and will use the `packageGraph` to know where to read
+/// files from.
+Future<BuildResult> build(List<List<Phase>> phaseGroups,
+    {PackageGraph packageGraph, AssetReader reader, AssetWriter writer}) async {
+  packageGraph ??= new PackageGraph.forThisPackage();
+  reader ??= new FileBasedAssetReader(packageGraph);
+  writer ??= new FileBasedAssetWriter(packageGraph);
+  return runZoned(() {
     _validatePhases(phaseGroups);
     return _runPhases(phaseGroups);
-  } catch (e, s) {
+  }, onError: (e, s) {
     return new BuildResult(BuildStatus.Failure, BuildType.Full, [],
         exception: e, stackTrace: s);
-  }
+  }, zoneValues: {
+    _assetReaderKey: reader,
+    _assetWriterKey: writer,
+    _packageGraphKey: packageGraph,
+  });
 }
 
+/// Keys for reading zone local values.
+Symbol _assetReaderKey = #buildAssetReader;
+Symbol _assetWriterKey = #buildAssetWriter;
+Symbol _packageGraphKey = #buildPackageGraph;
+
+/// Getters for zone local values.
+AssetReader get _reader => Zone.current[_assetReaderKey];
+AssetWriter get _writer => Zone.current[_assetWriterKey];
+PackageGraph get _packageGraph => Zone.current[_packageGraphKey];
+
 /// The local package name from your pubspec.
 final String _localPackageName = () {
   var pubspec = new File('pubspec.yaml');
@@ -89,18 +118,15 @@ List<AssetId> _assetIdsFor(List<InputSet> inputSets) {
 
 /// Returns all files matching [inputSet].
 Set<File> _filesMatching(InputSet inputSet) {
-  if (inputSet.package != _localPackageName) {
-    throw new UnimplementedError('Running on packages other than the '
-        'local package is not yet supported');
-  }
-
   var files = new Set<File>();
+  var root = _packageGraph[inputSet.package].location.toFilePath();
   for (var glob in inputSet.globs) {
-    files.addAll(glob.listSync(followLinks: false).where(
+    files.addAll(glob.listSync(followLinks: false, root: root).where(
         (e) => e is File && !_ignoredDirs.contains(path.split(e.path)[1])));
   }
   return files;
 }
+const _ignoredDirs = const ['build'];
 
 /// Runs [builder] with [inputs] as inputs.
 Stream<Asset> _runBuilder(Builder builder, List<AssetId> inputs) async* {
@@ -116,43 +142,3 @@ Stream<Asset> _runBuilder(Builder builder, List<AssetId> inputs) async* {
     }
   }
 }
-
-/// Very simple [AssetReader], only works on local package and assumes you are
-/// running from the root of the package.
-class _SimpleAssetReader implements AssetReader {
-  const _SimpleAssetReader();
-
-  @override
-  Future<bool> hasInput(AssetId id) async {
-    assert(id.package == _localPackageName);
-    return new File(id.path).exists();
-  }
-
-  @override
-  Future<String> readAsString(AssetId id, {Encoding encoding: UTF8}) async {
-    assert(id.package == _localPackageName);
-    return new File(id.path).readAsString(encoding: encoding);
-  }
-}
-
-const AssetReader _reader = const _SimpleAssetReader();
-
-/// Very simple [AssetWriter], only works on local package and assumes you are
-/// running from the root of the package.
-class _SimpleAssetWriter implements AssetWriter {
-  final _outputDir;
-
-  const _SimpleAssetWriter(this._outputDir);
-
-  @override
-  Future writeAsString(Asset asset, {Encoding encoding: UTF8}) async {
-    assert(asset.id.package == _localPackageName);
-    var file = new File(path.join(_outputDir, asset.id.path));
-    await file.create(recursive: true);
-    await file.writeAsString(asset.stringContents, encoding: encoding);
-  }
-}
-
-const AssetWriter _writer = const _SimpleAssetWriter('generated');
-
-const _ignoredDirs = const ['generated', 'build', 'packages'];
diff --git a/test/asset/file_based_test.dart b/test/asset/file_based_test.dart
new file mode 100644
index 000000000..b6dda3989
--- /dev/null
+++ b/test/asset/file_based_test.dart
@@ -0,0 +1,94 @@
+// Copyright (c) 2016, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+@TestOn('vm')
+import 'dart:io';
+
+import 'package:test/test.dart';
+
+import 'package:build/build.dart';
+
+import '../common/common.dart';
+
+final packageGraph = new PackageGraph.forPath('test/fixtures/basic_pkg');
+
+main() async {
+
+  group('FileBasedAssetReader', () {
+    final reader = new FileBasedAssetReader(packageGraph);
+
+    test('can read any application package files', () async {
+      expect(await reader.readAsString(makeAssetId('basic_pkg|hello.txt')),
+          'world\n');
+      expect(await reader.readAsString(makeAssetId('basic_pkg|lib/hello.txt')),
+          'world\n');
+      expect(await reader.readAsString(makeAssetId('basic_pkg|web/hello.txt')),
+          'world\n');
+    });
+
+    test('can only read package dependency files in the lib dir', () async {
+      expect(await reader.readAsString(makeAssetId('a|lib/a.txt')), 'A\n');
+      expect(reader.readAsString(makeAssetId('a|web/a.txt')),
+          throwsA(invalidInputException));
+      expect(reader.readAsString(makeAssetId('a|a.txt')),
+          throwsA(invalidInputException));
+    });
+
+    test('can check for existence of any application package files', () async {
+      expect(await reader.hasInput(makeAssetId('basic_pkg|hello.txt')), isTrue);
+      expect(await reader.hasInput(makeAssetId('basic_pkg|lib/hello.txt')),
+          isTrue);
+      expect(await reader.hasInput(makeAssetId('basic_pkg|web/hello.txt')),
+          isTrue);
+
+      expect(await reader.hasInput(makeAssetId('basic_pkg|a.txt')), isFalse);
+      expect(
+          await reader.hasInput(makeAssetId('basic_pkg|lib/a.txt')), isFalse);
+    });
+
+    test('can only check for existence of package dependency files in lib',
+        () async {
+      expect(await reader.hasInput(makeAssetId('a|lib/a.txt')), isTrue);
+      expect(await reader.hasInput(makeAssetId('a|lib/b.txt')), isFalse);
+      expect(reader.hasInput(makeAssetId('a|web/a.txt')),
+          throwsA(invalidInputException));
+      expect(reader.hasInput(makeAssetId('a|a.txt')),
+          throwsA(invalidInputException));
+      expect(reader.hasInput(makeAssetId('foo|bar.txt')),
+          throwsA(invalidInputException));
+    });
+
+    test('throws when attempting to read a non-existent file', () async {
+      expect(reader.readAsString(makeAssetId('basic_pkg|foo.txt')),
+          throwsA(assetNotFoundException));
+      expect(reader.readAsString(makeAssetId('a|lib/b.txt')),
+          throwsA(assetNotFoundException));
+      expect(reader.readAsString(makeAssetId('foo|lib/bar.txt')),
+          throwsA(packageNotFoundException));
+    });
+  });
+
+  group('FileBasedAssetWriter', () {
+    final writer = new FileBasedAssetWriter(packageGraph);
+
+    test('can output files in the application package', () async {
+      var asset = makeAsset('basic_pkg|test_file.txt', 'test');
+      await writer.writeAsString(asset);
+      var id = asset.id;
+      var file = new File('test/fixtures/${id.package}/${id.path}');
+      expect(await file.exists(), isTrue);
+      expect(await file.readAsString(), 'test');
+      await file.delete();
+    });
+
+    test('can\'t output files in package dependencies', () async {
+      var asset = makeAsset('a|test.txt');
+      expect(writer.writeAsString(asset), throwsA(invalidOutputException));
+    });
+
+    test('can\'t output files in arbitrary packages', () async {
+      var asset = makeAsset('foo|bar.txt');
+      expect(writer.writeAsString(asset), throwsA(invalidOutputException));
+    });
+  });
+}
diff --git a/test/common/assets.dart b/test/common/assets.dart
new file mode 100644
index 000000000..498f4415b
--- /dev/null
+++ b/test/common/assets.dart
@@ -0,0 +1,35 @@
+// Copyright (c) 2016, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+import 'package:build/build.dart';
+
+import 'in_memory_writer.dart';
+
+int _nextId = 0;
+AssetId makeAssetId([String assetIdString]) {
+  if (assetIdString == null) {
+    assetIdString = 'a|web/asset_$_nextId.txt';
+    _nextId++;
+  }
+  return new AssetId.parse(assetIdString);
+}
+
+Asset makeAsset([String assetIdString, String contents]) {
+  var id = makeAssetId(assetIdString);
+  return new Asset(id, contents ?? '$id');
+}
+
+Map<AssetId, Asset> makeAssets(Map<String, String> assetsMap) {
+  var assets = <AssetId, Asset>{};
+  assetsMap.forEach((idString, content) {
+    var asset = makeAsset(idString, content);
+    assets[asset.id] = asset;
+  });
+  return assets;
+}
+
+void addAssets(Iterable<Asset> assets, InMemoryAssetWriter writer) {
+  for (var asset in assets) {
+    writer.assets[asset.id] = asset.stringContents;
+  }
+}
diff --git a/test/common/common.dart b/test/common/common.dart
index 2f5f3fb09..780269815 100644
--- a/test/common/common.dart
+++ b/test/common/common.dart
@@ -1,43 +1,12 @@
 // Copyright (c) 2016, the Dart project authors.  Please see the AUTHORS file
 // for details. All rights reserved. Use of this source code is governed by a
 // BSD-style license that can be found in the LICENSE file.
-import 'package:build/build.dart';
-
-import 'in_memory_writer.dart';
-
+export 'assets.dart';
 export 'copy_builder.dart';
 export 'file_combiner_builder.dart';
 export 'in_memory_reader.dart';
 export 'in_memory_writer.dart';
 export 'generic_builder_transformer.dart';
+export 'matchers.dart';
 export 'stub_reader.dart';
 export 'stub_writer.dart';
-
-int _nextId = 0;
-AssetId makeAssetId([String assetIdString]) {
-  if (assetIdString == null) {
-    assetIdString = 'a|web/asset_$_nextId.txt';
-    _nextId++;
-  }
-  return new AssetId.parse(assetIdString);
-}
-
-Asset makeAsset([String assetIdString, String contents]) {
-  var id = makeAssetId(assetIdString);
-  return new Asset(id, contents ?? '$id');
-}
-
-Map<AssetId, Asset> makeAssets(Map<String, String> assetsMap) {
-  var assets = <AssetId, Asset>{};
-  assetsMap.forEach((idString, content) {
-    var asset = makeAsset(idString, content);
-    assets[asset.id] = asset;
-  });
-  return assets;
-}
-
-void addAssets(Iterable<Asset> assets, InMemoryAssetWriter writer) {
-  for (var asset in assets) {
-    writer.assets[asset.id] = asset.stringContents;
-  }
-}
diff --git a/test/common/matchers.dart b/test/common/matchers.dart
new file mode 100644
index 000000000..051ef455d
--- /dev/null
+++ b/test/common/matchers.dart
@@ -0,0 +1,11 @@
+// Copyright (c) 2016, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+import 'package:test/test.dart';
+
+import 'package:build/build.dart';
+
+final assetNotFoundException = new isInstanceOf<AssetNotFoundException>();
+final invalidInputException = new isInstanceOf<InvalidInputException>();
+final invalidOutputException = new isInstanceOf<InvalidOutputException>();
+final packageNotFoundException = new isInstanceOf<PackageNotFoundException>();
diff --git a/test/package_graph/basic_pkg/.packages b/test/fixtures/basic_pkg/.packages
similarity index 100%
rename from test/package_graph/basic_pkg/.packages
rename to test/fixtures/basic_pkg/.packages
diff --git a/test/fixtures/basic_pkg/hello.txt b/test/fixtures/basic_pkg/hello.txt
new file mode 100644
index 000000000..cc628ccd1
--- /dev/null
+++ b/test/fixtures/basic_pkg/hello.txt
@@ -0,0 +1 @@
+world
diff --git a/test/fixtures/basic_pkg/lib/hello.txt b/test/fixtures/basic_pkg/lib/hello.txt
new file mode 100644
index 000000000..cc628ccd1
--- /dev/null
+++ b/test/fixtures/basic_pkg/lib/hello.txt
@@ -0,0 +1 @@
+world
diff --git a/test/fixtures/basic_pkg/pkg/a/a.txt b/test/fixtures/basic_pkg/pkg/a/a.txt
new file mode 100644
index 000000000..f70f10e4d
--- /dev/null
+++ b/test/fixtures/basic_pkg/pkg/a/a.txt
@@ -0,0 +1 @@
+A
diff --git a/test/fixtures/basic_pkg/pkg/a/lib/a.txt b/test/fixtures/basic_pkg/pkg/a/lib/a.txt
new file mode 100644
index 000000000..f70f10e4d
--- /dev/null
+++ b/test/fixtures/basic_pkg/pkg/a/lib/a.txt
@@ -0,0 +1 @@
+A
diff --git a/test/package_graph/basic_pkg/pkg/a/pubspec.yaml b/test/fixtures/basic_pkg/pkg/a/pubspec.yaml
similarity index 100%
rename from test/package_graph/basic_pkg/pkg/a/pubspec.yaml
rename to test/fixtures/basic_pkg/pkg/a/pubspec.yaml
diff --git a/test/fixtures/basic_pkg/pkg/a/web/a.txt b/test/fixtures/basic_pkg/pkg/a/web/a.txt
new file mode 100644
index 000000000..f70f10e4d
--- /dev/null
+++ b/test/fixtures/basic_pkg/pkg/a/web/a.txt
@@ -0,0 +1 @@
+A
diff --git a/test/package_graph/basic_pkg/pkg/b/pubspec.yaml b/test/fixtures/basic_pkg/pkg/b/pubspec.yaml
similarity index 100%
rename from test/package_graph/basic_pkg/pkg/b/pubspec.yaml
rename to test/fixtures/basic_pkg/pkg/b/pubspec.yaml
diff --git a/test/package_graph/basic_pkg/pkg/c/pubspec.yaml b/test/fixtures/basic_pkg/pkg/c/pubspec.yaml
similarity index 100%
rename from test/package_graph/basic_pkg/pkg/c/pubspec.yaml
rename to test/fixtures/basic_pkg/pkg/c/pubspec.yaml
diff --git a/test/package_graph/basic_pkg/pubspec.yaml b/test/fixtures/basic_pkg/pubspec.yaml
similarity index 100%
rename from test/package_graph/basic_pkg/pubspec.yaml
rename to test/fixtures/basic_pkg/pubspec.yaml
diff --git a/test/fixtures/basic_pkg/web/hello.txt b/test/fixtures/basic_pkg/web/hello.txt
new file mode 100644
index 000000000..cc628ccd1
--- /dev/null
+++ b/test/fixtures/basic_pkg/web/hello.txt
@@ -0,0 +1 @@
+world
diff --git a/test/package_graph/no_packages_file/pubspec.yaml b/test/fixtures/no_packages_file/pubspec.yaml
similarity index 100%
rename from test/package_graph/no_packages_file/pubspec.yaml
rename to test/fixtures/no_packages_file/pubspec.yaml
diff --git a/test/package_graph/no_pubspec/.packages b/test/fixtures/no_pubspec/.packages
similarity index 100%
rename from test/package_graph/no_pubspec/.packages
rename to test/fixtures/no_pubspec/.packages
diff --git a/test/package_graph/package_graph_test.dart b/test/package_graph/package_graph_test.dart
index 587dd2a29..cfa00534b 100644
--- a/test/package_graph/package_graph_test.dart
+++ b/test/package_graph/package_graph_test.dart
@@ -21,7 +21,7 @@ main() async {
   });
 
   group('basic package ', () {
-    var basicPkgPath = 'test/package_graph/basic_pkg';
+    var basicPkgPath = 'test/fixtures/basic_pkg';
 
     setUp(() async {
       graph = await new PackageGraph.forPath(basicPkgPath);
@@ -58,11 +58,12 @@ main() async {
   });
 
   test('missing pubspec throws on create', () {
-    expect(() => new PackageGraph.forPath('no_pubspec'), throws);
+    expect(() => new PackageGraph.forPath('test/fixtures/no_pubspec'), throws);
   });
 
   test('missing .packages file throws on create', () {
-    expect(() => new PackageGraph.forPath('no_packages_file'), throws);
+    expect(() => new PackageGraph.forPath('test/fixtures/no_packages_file'),
+        throws);
   });
 }