diff --git a/docs/userguides/dependencies.md b/docs/userguides/dependencies.md
index 17192d025c..b546c83ecc 100644
--- a/docs/userguides/dependencies.md
+++ b/docs/userguides/dependencies.md
@@ -62,6 +62,16 @@ This is helpful when:
 - When there is not a suitable `DependencyAPI` implementation available for downloading your dependency.
 - Testing the framework.
 
+You can also reference local project manifests and use those as dependencies.
+To do this, use a local value pointing to the manifest file, like this:
+
+```yaml
+dependencies:
+  - name: MyDependency
+    local: ./my-dependency.json
+    version: 1.0.0
+```
+
 ### NPM
 
 You can use dependencies from NPM.
diff --git a/src/ape/api/projects.py b/src/ape/api/projects.py
index a213382252..8e91399b77 100644
--- a/src/ape/api/projects.py
+++ b/src/ape/api/projects.py
@@ -11,6 +11,7 @@
 from packaging.version import InvalidVersion, Version
 
 from ape._pydantic_compat import ValidationError
+from ape.exceptions import ProjectError
 from ape.logging import logger
 from ape.utils import (
     BaseInterfaceModel,
@@ -395,6 +396,31 @@ def _extract_local_manifest(
         if cached_manifest:
             return cached_manifest
 
+        if project_path.is_file() and project_path.suffix == ".json":
+            try:
+                manifest = PackageManifest.parse_file(project_path)
+
+            except ValueError as err:
+                if project_path.parent.is_dir():
+                    project_path = project_path.parent
+
+                else:
+                    raise ProjectError(f"Invalid manifest file: '{project_path}'.") from err
+
+            else:
+                # Was given a path to a manifest JSON.
+                self._write_manifest_to_cache(manifest)
+                return manifest
+
+        elif (project_path.parent / project_path.name.replace("-", "_")).is_dir():
+            project_path = project_path.parent / project_path.name.replace("-", "_")
+
+        elif (project_path.parent / project_path.name.replace("_", "-")).is_dir():
+            project_path = project_path.parent / project_path.name.replace("_", "-")
+
+        elif project_path.parent.is_dir():
+            project_path = project_path.parent
+
         # NOTE: Dependencies are not compiled here. Instead, the sources are packaged
         # for later usage via imports. For legacy reasons, many dependency-esque projects
         # are not meant to compile on their own.
diff --git a/tests/integration/cli/projects/with-dependencies/ape-config.yaml b/tests/integration/cli/projects/with-dependencies/ape-config.yaml
index 07f8e7f4b0..7d44091fad 100644
--- a/tests/integration/cli/projects/with-dependencies/ape-config.yaml
+++ b/tests/integration/cli/projects/with-dependencies/ape-config.yaml
@@ -15,3 +15,6 @@ dependencies:
 
   - name: renamed-contracts-folder-specified-in-config
     local: ./renamed_contracts_folder_specified_in_config
+
+  - name: manifest-dependency
+    local: ./manifest_dependency.json
diff --git a/tests/integration/cli/projects/with-dependencies/manifest_dependency.json b/tests/integration/cli/projects/with-dependencies/manifest_dependency.json
new file mode 100644
index 0000000000..73894ec3ad
--- /dev/null
+++ b/tests/integration/cli/projects/with-dependencies/manifest_dependency.json
@@ -0,0 +1 @@
+{"contractTypes":{"manifest-dependency":{"abi":[{"stateMutability":"nonpayable","type":"fallback"}],"contractName":"manifest-dependency","sourceId":"manifest-dependency.json"}},"manifest":"ethpm/3","sources":{"manifest-dependency.json":{"checksum":{"algorithm":"md5","hash":"0xaaf11362c066814f73d7db766ade0a0c"},"content":"[\n    {\"name\":\"foo\",\"type\":\"fallback\", \"stateMutability\":\"nonpayable\"}\n]\n","imports":[],"references":[],"urls":[]}}}
diff --git a/tests/integration/cli/test_compile.py b/tests/integration/cli/test_compile.py
index 3736ed2137..c2a2af1446 100644
--- a/tests/integration/cli/test_compile.py
+++ b/tests/integration/cli/test_compile.py
@@ -240,6 +240,7 @@ def test_compile_with_dependency(ape_cli, runner, project, contract_path):
         "containing-sub-dependencies",
         "renamed-complex-contracts-folder",
         "renamed-contracts-folder-specified-in-config",
+        "manifest-dependency",
     ):
         assert name in list(project.dependencies.keys())
         dependency = project.dependencies[name]["local"]