diff --git a/api.js b/api.js
index 058ab6523..27407a2dd 100644
--- a/api.js
+++ b/api.js
@@ -3,8 +3,6 @@ var EventEmitter = require('events').EventEmitter;
 var path = require('path');
 var util = require('util');
 var commonPathPrefix = require('common-path-prefix');
-var uniqueTempDir = require('unique-temp-dir');
-var findCacheDir = require('find-cache-dir');
 var objectAssign = require('object-assign');
 var resolveCwd = require('resolve-cwd');
 var debounce = require('lodash.debounce');
@@ -14,9 +12,10 @@ var Promise = require('bluebird');
 var getPort = require('get-port');
 var arrify = require('arrify');
 var ms = require('ms');
-var CachingPrecompiler = require('./lib/caching-precompiler');
 var RunStatus = require('./lib/run-status');
 var AvaError = require('./lib/ava-error');
+var babelBundle = require('./lib/babel/bundle');
+var babelConfig = require('./lib/babel/config');
 var fork = require('./lib/fork');
 
 function resolveModules(modules) {
@@ -59,21 +58,14 @@ function Api(options) {
 	}, options);
 
 	this.options.require = resolveModules(this.options.require);
+	this.options.babel = babelConfig.build(options.babel);
 }
 
 util.inherits(Api, EventEmitter);
 module.exports = Api;
 
 Api.prototype._runFile = function (file, runStatus, execArgv) {
-	var hash = this.precompiler.precompileFile(file);
-	var precompiled = {};
-	precompiled[file] = hash;
-
-	var options = objectAssign({}, this.options, {
-		precompiled: precompiled
-	});
-
-	var emitter = fork(file, options, execArgv);
+	var emitter = fork(file, this.options, execArgv);
 	runStatus.observeFork(emitter);
 
 	return emitter;
@@ -85,7 +77,10 @@ Api.prototype.run = function (files, options) {
 	return new AvaFiles({cwd: this.options.resolveTestsFrom, files: files})
 		.findTestFiles()
 		.then(function (files) {
-			return self._run(files, options);
+			return babelBundle.create(self.options.babel).then(function (bundle) {
+				self.options.bundle = bundle;
+				return self._run(files, options);
+			});
 		});
 };
 
@@ -113,23 +108,6 @@ Api.prototype._cancelTimeout = function (runStatus) {
 	runStatus._restartTimer.cancel();
 };
 
-Api.prototype._setupPrecompiler = function (files) {
-	var isCacheEnabled = this.options.cacheEnabled !== false;
-	var cacheDir = uniqueTempDir();
-
-	if (isCacheEnabled) {
-		cacheDir = findCacheDir({
-			name: 'ava',
-			files: files
-		});
-	}
-
-	this.options.cacheDir = cacheDir;
-
-	var isPowerAssertEnabled = this.options.powerAssert !== false;
-	this.precompiler = new CachingPrecompiler(cacheDir, this.options.babelConfig, isPowerAssertEnabled);
-};
-
 Api.prototype._run = function (files, options) {
 	options = options || {};
 
@@ -148,8 +126,6 @@ Api.prototype._run = function (files, options) {
 		return Promise.resolve(runStatus);
 	}
 
-	this._setupPrecompiler(files);
-
 	if (this.options.timeout) {
 		this._setupTimeout(runStatus);
 	}
diff --git a/cli.js b/cli.js
index 22bcb26e4..95020b1ee 100755
--- a/cli.js
+++ b/cli.js
@@ -13,186 +13,16 @@ var localCLI = resolveCwd('ava/cli');
 // see https://github.com/nodejs/node/issues/6624
 if (localCLI && path.relative(localCLI, __filename) !== '') {
 	debug('Using local install of AVA');
-	require(localCLI);
-	return;
-}
-
-if (debug.enabled) {
-	require('time-require');
-}
-
-var updateNotifier = require('update-notifier');
-var figures = require('figures');
-var arrify = require('arrify');
-var meow = require('meow');
-var Promise = require('bluebird');
-var pkgConf = require('pkg-conf');
-var isCi = require('is-ci');
-var hasFlag = require('has-flag');
-var colors = require('./lib/colors');
-var verboseReporter = require('./lib/reporters/verbose');
-var miniReporter = require('./lib/reporters/mini');
-var tapReporter = require('./lib/reporters/tap');
-var Logger = require('./lib/logger');
-var Watcher = require('./lib/watcher');
-var babelConfig = require('./lib/babel-config');
-var Api = require('./api');
-
-// Bluebird specific
-Promise.longStackTraces();
-
-var conf = pkgConf.sync('ava');
-
-var pkgDir = path.dirname(pkgConf.filepath(conf));
-
-try {
-	conf.babel = babelConfig.validate(conf.babel);
-} catch (err) {
-	console.log('\n  ' + err.message);
-	process.exit(1);
-}
-
-var cli = meow([
-	'Usage',
-	'  ava [<file|directory|glob> ...]',
-	'',
-	'Options',
-	'  --init             Add AVA to your project',
-	'  --fail-fast        Stop after first test failure',
-	'  --serial, -s       Run tests serially',
-	'  --tap, -t          Generate TAP output',
-	'  --verbose, -v      Enable verbose output',
-	'  --no-cache         Disable the transpiler cache',
-	'  --no-power-assert  Disable Power Assert',
-	'  --match, -m        Only run tests with matching title (Can be repeated)',
-	'  --watch, -w        Re-run tests when tests and source files change',
-	'  --source, -S       Pattern to match source files so tests can be re-run (Can be repeated)',
-	'  --timeout, -T      Set global timeout',
-	'  --concurrency, -c  Maximum number of test files running at the same time (EXPERIMENTAL)',
-	'',
-	'Examples',
-	'  ava',
-	'  ava test.js test2.js',
-	'  ava test-*.js',
-	'  ava test',
-	'  ava --init',
-	'  ava --init foo.js',
-	'',
-	'Default patterns when no arguments:',
-	'test.js test-*.js test/**/*.js **/__tests__/**/*.js **/*.test.js'
-], {
-	string: [
-		'_',
-		'timeout',
-		'source',
-		'match',
-		'concurrency'
-	],
-	boolean: [
-		'fail-fast',
-		'verbose',
-		'serial',
-		'tap',
-		'watch'
-	],
-	default: conf,
-	alias: {
-		t: 'tap',
-		v: 'verbose',
-		s: 'serial',
-		m: 'match',
-		w: 'watch',
-		S: 'source',
-		T: 'timeout',
-		c: 'concurrency'
-	}
-});
-
-updateNotifier({pkg: cli.pkg}).notify();
-
-if (cli.flags.init) {
-	require('ava-init')();
-	return;
-}
-
-if (
-	((hasFlag('--watch') || hasFlag('-w')) && (hasFlag('--tap') || hasFlag('-t'))) ||
-	(conf.watch && conf.tap)
-) {
-	console.error('  ' + colors.error(figures.cross) + ' The TAP reporter is not available when using watch mode.');
-	process.exit(1);
-}
-
-if (hasFlag('--require') || hasFlag('-r')) {
-	console.error('  ' + colors.error(figures.cross) + ' The --require and -r flags are deprecated. Requirements should be configured in package.json - see documentation.');
-	process.exit(1);
-}
-
-var api = new Api({
-	failFast: cli.flags.failFast,
-	serial: cli.flags.serial,
-	require: arrify(conf.require),
-	cacheEnabled: cli.flags.cache !== false,
-	powerAssert: cli.flags.powerAssert !== false,
-	explicitTitles: cli.flags.watch,
-	match: arrify(cli.flags.match),
-	babelConfig: conf.babel,
-	resolveTestsFrom: cli.input.length === 0 ? pkgDir : process.cwd(),
-	timeout: cli.flags.timeout,
-	concurrency: cli.flags.concurrency ? parseInt(cli.flags.concurrency, 10) : 0
-});
-
-var reporter;
-
-if (cli.flags.tap && !cli.flags.watch) {
-	reporter = tapReporter();
-} else if (cli.flags.verbose || isCi) {
-	reporter = verboseReporter();
+	require(localCLI); // eslint-disable-line import/no-dynamic-require
 } else {
-	reporter = miniReporter({watching: cli.flags.watch});
-}
-
-reporter.api = api;
-var logger = new Logger(reporter);
-
-logger.start();
-
-api.on('test-run', function (runStatus) {
-	reporter.api = runStatus;
-	runStatus.on('test', logger.test);
-	runStatus.on('error', logger.unhandledError);
-
-	runStatus.on('stdout', logger.stdout);
-	runStatus.on('stderr', logger.stderr);
-});
-
-var files = cli.input.length ? cli.input : arrify(conf.files);
+	if (debug.enabled) {
+		require('time-require'); // eslint-disable-line import/no-unassigned-import
+	}
 
-if (cli.flags.watch) {
 	try {
-		var watcher = new Watcher(logger, api, files, arrify(cli.flags.source));
-		watcher.observeStdin(process.stdin);
+		require('./lib/cli').run();
 	} catch (err) {
-		if (err.name === 'AvaError') {
-			// An AvaError may be thrown if chokidar is not installed. Log it nicely.
-			console.error('  ' + colors.error(figures.cross) + ' ' + err.message);
-			logger.exit(1);
-		} else {
-			// Rethrow so it becomes an uncaught exception.
-			throw err;
-		}
+		console.error('\n  ' + err.message);
+		process.exit(1);
 	}
-} else {
-	api.run(files)
-		.then(function (runStatus) {
-			logger.finish(runStatus);
-			logger.exit(runStatus.failCount > 0 || runStatus.rejectionCount > 0 || runStatus.exceptionCount > 0 ? 1 : 0);
-		})
-		.catch(function (err) {
-			// Don't swallow exceptions. Note that any expected error should already
-			// have been logged.
-			setImmediate(function () {
-				throw err;
-			});
-		});
 }
diff --git a/lib/babel-config.js b/lib/babel-config.js
deleted file mode 100644
index 1bfdafb7f..000000000
--- a/lib/babel-config.js
+++ /dev/null
@@ -1,152 +0,0 @@
-'use strict';
-var path = require('path');
-var chalk = require('chalk');
-var figures = require('figures');
-var convertSourceMap = require('convert-source-map');
-var objectAssign = require('object-assign');
-var semver = require('semver');
-var colors = require('./colors');
-
-function validate(conf) {
-	if (conf === undefined || conf === null) {
-		conf = 'default';
-	}
-
-	// check for valid babel config shortcuts (can be either "default" or "inherit")
-	var isValidShortcut = conf === 'default' || conf === 'inherit';
-
-	if (!conf || (typeof conf === 'string' && !isValidShortcut)) {
-		var message = colors.error(figures.cross);
-		message += ' Unexpected Babel configuration for AVA. ';
-		message += 'See ' + chalk.underline('https://github.com/avajs/ava#es2015-support') + ' for allowed values.';
-
-		throw new Error(message);
-	}
-
-	return conf;
-}
-
-function lazy(initFn) {
-	var initialized = false;
-	var value;
-
-	return function () {
-		if (!initialized) {
-			initialized = true;
-			value = initFn();
-		}
-
-		return value;
-	};
-}
-
-var defaultPresets = lazy(function () {
-	var esPreset = semver.satisfies(process.version, '>=4') ?
-		'babel-preset-es2015-node4' :
-		'babel-preset-es2015';
-
-	return [
-		require('babel-preset-stage-2'),
-		require(esPreset) // eslint-disable-line import/no-dynamic-require
-	];
-});
-
-var rewritePlugin = lazy(function () {
-	var wrapListener = require('babel-plugin-detective/wrap-listener');
-
-	return wrapListener(rewriteBabelRuntimePaths, 'rewrite-runtime', {
-		generated: true,
-		require: true,
-		import: true
-	});
-});
-
-function rewriteBabelRuntimePaths(path) {
-	var isBabelPath = /^babel-runtime[\\\/]?/.test(path.node.value);
-
-	if (path.isLiteral() && isBabelPath) {
-		path.node.value = require.resolve(path.node.value);
-	}
-}
-
-var espowerPlugin = lazy(function () {
-	var babel = require('babel-core');
-	var createEspowerPlugin = require('babel-plugin-espower/create');
-
-	// initialize power-assert
-	return createEspowerPlugin(babel, {
-		embedAst: true,
-		patterns: require('./enhance-assert').PATTERNS
-	});
-});
-
-var defaultPlugins = lazy(function () {
-	return [
-		require('babel-plugin-ava-throws-helper'),
-		rewritePlugin(),
-		require('babel-plugin-transform-runtime')
-	];
-});
-
-function build(babelConfig, powerAssert, filePath, code) {
-	babelConfig = validate(babelConfig);
-
-	var options;
-
-	if (babelConfig === 'default') {
-		options = {
-			babelrc: false,
-			presets: defaultPresets()
-		};
-	} else if (babelConfig === 'inherit') {
-		options = {
-			babelrc: true
-		};
-	} else {
-		options = {
-			babelrc: false
-		};
-
-		objectAssign(options, babelConfig);
-	}
-
-	var sourceMap = getSourceMap(filePath, code);
-
-	objectAssign(options, {
-		inputSourceMap: sourceMap,
-		filename: filePath,
-		sourceMaps: true,
-		ast: false
-	});
-
-	options.plugins = (options.plugins || [])
-		.concat(powerAssert ? espowerPlugin() : [])
-		.concat(defaultPlugins());
-
-	return options;
-}
-
-function getSourceMap(filePath, code) {
-	var sourceMap = convertSourceMap.fromSource(code);
-
-	if (!sourceMap) {
-		var dirPath = path.dirname(filePath);
-
-		sourceMap = convertSourceMap.fromMapFileSource(code, dirPath);
-	}
-
-	if (sourceMap) {
-		sourceMap = sourceMap.toObject();
-	}
-
-	return sourceMap;
-}
-
-module.exports = {
-	validate: validate,
-	build: build,
-	pluginPackages: [
-		require.resolve('babel-core/package.json'),
-		require.resolve('babel-plugin-espower/package.json')
-	]
-};
diff --git a/lib/babel/bundle.js b/lib/babel/bundle.js
new file mode 100644
index 000000000..704dad4c1
--- /dev/null
+++ b/lib/babel/bundle.js
@@ -0,0 +1,51 @@
+'use strict';
+
+var fs = require('fs');
+var path = require('path');
+
+var Promise = require('bluebird');
+var cml = require('cached-module-loader');
+var findCacheDir = require('find-cache-dir');
+
+var WORKER = require.resolve('./worker');
+
+function create(babelConfig) {
+	var cacheDir = findCacheDir({name: 'ava', create: true});
+	var cachedDataFile = path.join(cacheDir, 'bundled-cachedData.js');
+	var codeFile = path.join(cacheDir, 'bundled-code.js');
+
+	if (fs.existsSync(cachedDataFile) && fs.existsSync(codeFile)) {
+		return Promise.resolve({cachedDataFile: cachedDataFile, codeFile: codeFile});
+	}
+
+	var start = Date.now();
+	var srcFile = path.join(cacheDir, 'faux-src.js');
+	var testFile = path.join(cacheDir, 'faux-test.js');
+	var stubFile = path.join(cacheDir, 'bundle-stub.js');
+
+	fs.writeFileSync(srcFile, '');
+	fs.writeFileSync(testFile, 'require("./faux-src")');
+	fs.writeFileSync(stubFile, [
+		'var babelWorker = require(' + JSON.stringify(WORKER) + ')',
+		'babelWorker.runTest(' + JSON.stringify(testFile) + ', ' + JSON.stringify(babelConfig) + ')'
+	].join('\n'));
+
+	return cml.bundleDependencies(stubFile).then(function (bundle) {
+		fs.writeFileSync(cachedDataFile, bundle.cachedData);
+		fs.writeFileSync(codeFile, bundle.code);
+		console.error('bundling took', Date.now() - start);
+		return {cachedDataFile: cachedDataFile, codeFile: codeFile};
+	});
+}
+exports.create = create;
+
+function loadWorker(bundle) {
+	var start = Date.now();
+	var worker = cml.loadInThisContext(WORKER, module, {
+		cachedData: new Buffer(bundle.cachedData, 'base64'),
+		code: new Buffer(bundle.code, 'base64')
+	});
+	console.error('loading took', Date.now() - start);
+	return worker;
+}
+exports.loadWorker = loadWorker;
diff --git a/lib/babel/cache-worker.js b/lib/babel/cache-worker.js
new file mode 100644
index 000000000..df54fa639
--- /dev/null
+++ b/lib/babel/cache-worker.js
@@ -0,0 +1,34 @@
+'use strict';
+var fs = require('fs');
+var path = require('path');
+var js = require('default-require-extensions/js');
+var findCacheDir = require('find-cache-dir');
+var md5hex = require('md5-hex');
+
+var register = require('./register');
+
+function runTest(opts) {
+	var testPath = opts.testPath;
+	var code = fs.readFileSync(testPath);
+	var hash = md5hex(code);
+
+	var cacheDir = findCacheDir({name: 'ava', create: true});
+	var cachedFile = path.join(cacheDir, hash + '.js');
+	if (!fs.existsSync(cachedFile)) {
+		return opts.loadWorker().runTest(testPath, opts.babelConfig);
+	}
+
+	require.extensions['.js'] = function (module) {
+		register.install();
+
+		var oldCompile = module._compile;
+		module._compile = function () {
+			module._compile = oldCompile;
+			module._compile(fs.readFileSync(cachedFile, 'utf8'), testPath);
+		};
+
+		js(module, testPath);
+	};
+	require(testPath); // eslint-disable-line import/no-dynamic-require
+}
+exports.runTest = runTest;
diff --git a/lib/babel/config.js b/lib/babel/config.js
new file mode 100644
index 000000000..1c7bb87e0
--- /dev/null
+++ b/lib/babel/config.js
@@ -0,0 +1,95 @@
+'use strict';
+var chalk = require('chalk');
+var figures = require('figures');
+var objectAssign = require('object-assign');
+var semver = require('semver');
+
+var colors = require('../colors');
+
+var ESPOWER = require.resolve('./plugin-espower');
+var REWRITE_RUNTIME = require.resolve('./plugin-rewrite-runtime');
+
+var DEFAULT_PRESETS = (function () {
+	var esPreset = semver.satisfies(process.version, '>=4') ?
+		'babel-preset-es2015-node4' :
+		'babel-preset-es2015';
+
+	return [
+		'babel-preset-stage-2',
+		esPreset
+	];
+})();
+
+var REQUIRED_PLUGINS = [
+	'babel-plugin-ava-throws-helper',
+	REWRITE_RUNTIME,
+	'babel-plugin-transform-runtime'
+];
+
+function validate(conf) {
+	if (conf === undefined || conf === null) {
+		conf = 'default';
+	}
+
+	// check for valid babel config shortcuts (can be either "default" or "inherit")
+	var isValidShortcut = conf === 'default' || conf === 'inherit';
+
+	if (!conf || (typeof conf === 'string' && !isValidShortcut)) {
+		var message = colors.error(figures.cross);
+		message += ' Unexpected Babel configuration for AVA. ';
+		message += 'See ' + chalk.underline('https://github.com/avajs/ava#es2015-support') + ' for allowed values.';
+
+		throw new Error(message);
+	}
+
+	return conf;
+}
+exports.validate = validate;
+
+function resolve(plugin) {
+	return require.resolve(plugin);
+}
+
+function build(conf, usePowerAssert) {
+	conf = validate(conf);
+
+	var options;
+
+	if (conf === 'default') {
+		options = {
+			babelrc: false,
+			presets: DEFAULT_PRESETS.map(resolve)
+		};
+	} else if (conf === 'inherit') {
+		options = {
+			babelrc: true
+		};
+	} else {
+		options = {
+			babelrc: false
+		};
+
+		objectAssign(options, conf);
+	}
+
+	options.plugins = (options.plugins || [])
+		.concat(usePowerAssert ? [ESPOWER] : [])
+		.concat(REQUIRED_PLUGINS.map(resolve));
+
+	return options;
+}
+exports.build = build;
+
+exports.pluginPackages = DEFAULT_PRESETS
+	.concat(
+		REQUIRED_PLUGINS.filter(function (plugin) {
+			return plugin !== REWRITE_RUNTIME;
+		})
+	)
+	// Dependency of ESPOWER
+	.concat(['babel-plugin-espower'])
+	// Dependency of REWRITE_RUNTIME
+	.concat(['babel-plugin-detective'])
+	.map(function (plugin) {
+		return require.resolve(plugin + '/package.json');
+	});
diff --git a/lib/babel/plugin-espower.js b/lib/babel/plugin-espower.js
new file mode 100644
index 000000000..7e63a7655
--- /dev/null
+++ b/lib/babel/plugin-espower.js
@@ -0,0 +1,9 @@
+var babel = require('babel-core');
+var createEspowerPlugin = require('babel-plugin-espower/create');
+var patterns = require('../enhance-assert').PATTERNS;
+
+// initialize power-assert
+module.exports = createEspowerPlugin(babel, {
+	embedAst: true,
+	patterns: patterns
+});
diff --git a/lib/babel/plugin-rewrite-runtime.js b/lib/babel/plugin-rewrite-runtime.js
new file mode 100644
index 000000000..1780ff9d3
--- /dev/null
+++ b/lib/babel/plugin-rewrite-runtime.js
@@ -0,0 +1,17 @@
+'use strict';
+
+var wrapListener = require('babel-plugin-detective/wrap-listener');
+
+module.exports = wrapListener(rewriteBabelRuntimePaths, 'rewrite-runtime', {
+	generated: true,
+	require: true,
+	import: true
+});
+
+function rewriteBabelRuntimePaths(path) {
+	var isBabelPath = /^babel-runtime[\\\/]?/.test(path.node.value);
+
+	if (path.isLiteral() && isBabelPath) {
+		path.node.value = require.resolve(path.node.value);
+	}
+}
diff --git a/lib/babel/register.js b/lib/babel/register.js
new file mode 100644
index 000000000..54925add6
--- /dev/null
+++ b/lib/babel/register.js
@@ -0,0 +1,46 @@
+'use strict';
+
+var fs = require('fs');
+var path = require('path');
+var js = require('default-require-extensions/js');
+var findCacheDir = require('find-cache-dir');
+var md5hex = require('md5-hex');
+
+var babel;
+function install() {
+	var cacheDir = findCacheDir({name: 'ava', create: true});
+
+	require.extensions['.js'] = function (module, filename) {
+		if (/node_modules/.test(filename)) {
+			return js(module, filename);
+		}
+
+		var oldCompile = module._compile;
+		module._compile = function (code, filename) {
+			module._compile = oldCompile;
+
+			var hash = md5hex(code);
+			var cachedFile = path.join(cacheDir, hash + '.js');
+			if (fs.existsSync(cachedFile)) {
+				module._compile(fs.readFileSync(cachedFile, 'utf8'), filename);
+			} else {
+				if (!babel) {
+					// TODO: Load from the bundle instead!
+					babel = require('babel-core');
+				}
+
+				var result = babel.transform(code, {
+					filename: filename,
+					sourceMaps: true,
+					ast: false,
+					babelrc: true
+				});
+				fs.writeFileSync(cachedFile, result.code);
+				module._compile(result.code, filename);
+			}
+		};
+
+		return js(module, filename);
+	};
+}
+exports.install = install;
diff --git a/lib/babel/worker.js b/lib/babel/worker.js
new file mode 100644
index 000000000..8d487502d
--- /dev/null
+++ b/lib/babel/worker.js
@@ -0,0 +1,44 @@
+'use strict';
+var fs = require('fs');
+var path = require('path');
+
+var babel = require('babel-core');
+var js = require('default-require-extensions/js');
+var findCacheDir = require('find-cache-dir');
+var md5hex = require('md5-hex');
+var objectAssign = require('object-assign');
+
+var register = require('./register');
+
+function runTest(testPath, babelConfig) {
+	var options = objectAssign({
+		filename: testPath,
+		sourceMaps: true,
+		ast: false,
+		babelrc: false
+	}, babelConfig);
+
+	var start = Date.now();
+	var code = fs.readFileSync(testPath, 'utf8');
+	var result = babel.transform(code, options);
+	console.error('transformation took', Date.now() - start);
+
+	var hash = md5hex(code);
+	var cacheDir = findCacheDir({name: 'ava', create: true});
+	var cachedFile = path.join(cacheDir, hash + '.js');
+	fs.writeFileSync(cachedFile, result.code);
+
+	require.extensions['.js'] = function (module) {
+		register.install();
+
+		var oldCompile = module._compile;
+		module._compile = function () {
+			module._compile = oldCompile;
+			module._compile(result.code, testPath);
+		};
+
+		js(module, testPath);
+	};
+	require(testPath); // eslint-disable-line import/no-dynamic-require
+}
+exports.runTest = runTest;
diff --git a/lib/cli.js b/lib/cli.js
new file mode 100644
index 000000000..701b7ccf6
--- /dev/null
+++ b/lib/cli.js
@@ -0,0 +1,169 @@
+'use strict';
+var path = require('path');
+var updateNotifier = require('update-notifier');
+var figures = require('figures');
+var arrify = require('arrify');
+var meow = require('meow');
+var Promise = require('bluebird');
+var pkgConf = require('pkg-conf');
+var isCi = require('is-ci');
+var hasFlag = require('has-flag');
+var Api = require('../api');
+var colors = require('./colors');
+var verboseReporter = require('./reporters/verbose');
+var miniReporter = require('./reporters/mini');
+var tapReporter = require('./reporters/tap');
+var Logger = require('./logger');
+var Watcher = require('./watcher');
+var babelConfig = require('./babel/config');
+
+// Bluebird specific
+Promise.longStackTraces();
+
+exports.run = function () {
+	var conf = pkgConf.sync('ava');
+	var pkgDir = path.dirname(pkgConf.filepath(conf));
+
+	var cli = meow([
+		'Usage',
+		'  ava [<file|directory|glob> ...]',
+		'',
+		'Options',
+		'  --init             Add AVA to your project',
+		'  --fail-fast        Stop after first test failure',
+		'  --serial, -s       Run tests serially',
+		'  --tap, -t          Generate TAP output',
+		'  --verbose, -v      Enable verbose output',
+		'  --no-cache         Disable the transpiler cache',
+		'  --no-power-assert  Disable Power Assert',
+		'  --match, -m        Only run tests with matching title (Can be repeated)',
+		'  --watch, -w        Re-run tests when tests and source files change',
+		'  --source, -S       Pattern to match source files so tests can be re-run (Can be repeated)',
+		'  --timeout, -T      Set global timeout',
+		'  --concurrency, -c  Maximum number of test files running at the same time (EXPERIMENTAL)',
+		'',
+		'Examples',
+		'  ava',
+		'  ava test.js test2.js',
+		'  ava test-*.js',
+		'  ava test',
+		'  ava --init',
+		'  ava --init foo.js',
+		'',
+		'Default patterns when no arguments:',
+		'test.js test-*.js test/**/*.js **/__tests__/**/*.js **/*.test.js'
+	], {
+		string: [
+			'_',
+			'timeout',
+			'source',
+			'match',
+			'concurrency'
+		],
+		boolean: [
+			'fail-fast',
+			'verbose',
+			'serial',
+			'tap',
+			'watch'
+		],
+		default: conf,
+		alias: {
+			t: 'tap',
+			v: 'verbose',
+			s: 'serial',
+			m: 'match',
+			w: 'watch',
+			S: 'source',
+			T: 'timeout',
+			c: 'concurrency'
+		}
+	});
+
+	updateNotifier({pkg: cli.pkg}).notify();
+
+	if (cli.flags.init) {
+		require('ava-init')();
+		return;
+	}
+
+	if (
+		((hasFlag('--watch') || hasFlag('-w')) && (hasFlag('--tap') || hasFlag('-t'))) ||
+		(conf.watch && conf.tap)
+	) {
+		throw new Error(colors.error(figures.cross) + ' The TAP reporter is not available when using watch mode.');
+	}
+
+	if (hasFlag('--require') || hasFlag('-r')) {
+		throw new Error(colors.error(figures.cross) + ' The --require and -r flags are deprecated. Requirements should be configured in package.json - see documentation.');
+	}
+
+	var api = new Api({
+		failFast: cli.flags.failFast,
+		serial: cli.flags.serial,
+		require: arrify(conf.require),
+		cacheEnabled: cli.flags.cache !== false,
+		powerAssert: cli.flags.powerAssert !== false,
+		explicitTitles: cli.flags.watch,
+		match: arrify(cli.flags.match),
+		babelConfig: babelConfig.validate(conf.babel),
+		resolveTestsFrom: cli.input.length === 0 ? pkgDir : process.cwd(),
+		timeout: cli.flags.timeout,
+		concurrency: cli.flags.concurrency ? parseInt(cli.flags.concurrency, 10) : 0
+	});
+
+	var reporter;
+
+	if (cli.flags.tap && !cli.flags.watch) {
+		reporter = tapReporter();
+	} else if (cli.flags.verbose || isCi) {
+		reporter = verboseReporter();
+	} else {
+		reporter = miniReporter({watching: cli.flags.watch});
+	}
+
+	reporter.api = api;
+	var logger = new Logger(reporter);
+
+	logger.start();
+
+	api.on('test-run', function (runStatus) {
+		reporter.api = runStatus;
+		runStatus.on('test', logger.test);
+		runStatus.on('error', logger.unhandledError);
+
+		runStatus.on('stdout', logger.stdout);
+		runStatus.on('stderr', logger.stderr);
+	});
+
+	var files = cli.input.length ? cli.input : arrify(conf.files);
+
+	if (cli.flags.watch) {
+		try {
+			var watcher = new Watcher(logger, api, files, arrify(cli.flags.source));
+			watcher.observeStdin(process.stdin);
+		} catch (err) {
+			if (err.name === 'AvaError') {
+				// An AvaError may be thrown if chokidar is not installed. Log it nicely.
+				console.error('  ' + colors.error(figures.cross) + ' ' + err.message);
+				logger.exit(1);
+			} else {
+				// Rethrow so it becomes an uncaught exception.
+				throw err;
+			}
+		}
+	} else {
+		api.run(files)
+			.then(function (runStatus) {
+				logger.finish(runStatus);
+				logger.exit(runStatus.failCount > 0 || runStatus.rejectionCount > 0 || runStatus.exceptionCount > 0 ? 1 : 0);
+			})
+			.catch(function (err) {
+				// Don't swallow exceptions. Note that any expected error should already
+				// have been logged.
+				setImmediate(function () {
+					throw err;
+				});
+			});
+	}
+};
diff --git a/lib/logger.js b/lib/logger.js
index c79012698..14d705d2e 100644
--- a/lib/logger.js
+++ b/lib/logger.js
@@ -98,6 +98,6 @@ Logger.prototype.exit = function (code) {
 
 	// timeout required to correctly flush IO on Node.js 0.10 on Windows
 	setTimeout(function () {
-		process.exit(code); // eslint-disable-line xo/no-process-exit
+		process.exit(code); // eslint-disable-line unicorn/no-process-exit
 	}, process.env.AVA_APPVEYOR ? 500 : 0);
 };
diff --git a/lib/process-adapter.js b/lib/process-adapter.js
index 1e73b591d..3528f4adf 100644
--- a/lib/process-adapter.js
+++ b/lib/process-adapter.js
@@ -1,9 +1,6 @@
 'use strict';
-var fs = require('fs');
 var path = require('path');
 var chalk = require('chalk');
-var sourceMapSupport = require('source-map-support');
-var installPrecompiler = require('require-precompiled');
 
 var debug = require('debug')('ava');
 
@@ -16,7 +13,7 @@ if (!isForked) {
 	console.log();
 	console.error('Test files must be run with the AVA CLI:\n\n    ' + chalk.grey.dim('$') + ' ' + chalk.cyan('ava ' + fp) + '\n');
 
-	process.exit(1); // eslint-disable-line xo/no-process-exit
+	process.exit(1); // eslint-disable-line unicorn/no-process-exit
 }
 
 exports.send = function (name, data) {
@@ -62,37 +59,6 @@ if (debug.enabled) {
 	require('time-require'); // eslint-disable-line import/no-unassigned-import
 }
 
-var sourceMapCache = Object.create(null);
-var cacheDir = opts.cacheDir;
-
-exports.installSourceMapSupport = function () {
-	sourceMapSupport.install({
-		environment: 'node',
-		handleUncaughtExceptions: false,
-		retrieveSourceMap: function (source) {
-			if (sourceMapCache[source]) {
-				return {
-					url: source,
-					map: fs.readFileSync(sourceMapCache[source], 'utf8')
-				};
-			}
-		}
-	});
-};
-
-exports.installPrecompilerHook = function () {
-	installPrecompiler(function (filename) {
-		var precompiled = opts.precompiled[filename];
-
-		if (precompiled) {
-			sourceMapCache[filename] = path.join(cacheDir, precompiled + '.js.map');
-			return fs.readFileSync(path.join(cacheDir, precompiled + '.js'), 'utf8');
-		}
-
-		return null;
-	});
-};
-
 exports.installDependencyTracking = function (dependencies, testPath) {
 	Object.keys(require.extensions).forEach(function (ext) {
 		var wrappedHandler = require.extensions[ext];
diff --git a/lib/reporters/mini.js b/lib/reporters/mini.js
index c5d53415f..8c7d9fbe8 100644
--- a/lib/reporters/mini.js
+++ b/lib/reporters/mini.js
@@ -159,12 +159,8 @@ MiniReporter.prototype.finish = function (runStatus) {
 		status += '\n  ' + colors.error(runStatus.previousFailCount, 'previous', plur('failure', runStatus.previousFailCount), 'in test files that were not rerun');
 	}
 
-	var i = 0;
-
 	if (this.knownFailureCount > 0) {
 		runStatus.knownFailures.forEach(function (test) {
-			i++;
-
 			var title = test.title;
 
 			status += '\n\n   ' + colors.title(title);
@@ -179,8 +175,6 @@ MiniReporter.prototype.finish = function (runStatus) {
 				return;
 			}
 
-			i++;
-
 			var title = test.error ? test.title : 'Unhandled Error';
 			var description;
 			var errorTitle = '  ' + test.error.message + '\n';
@@ -210,8 +204,6 @@ MiniReporter.prototype.finish = function (runStatus) {
 				return;
 			}
 
-			i++;
-
 			if (err.type === 'exception' && err.name === 'AvaError') {
 				status += '\n\n  ' + colors.error(cross + ' ' + err.message);
 			} else {
diff --git a/lib/test-worker.js b/lib/test-worker.js
index 2428bf6d5..9d23c0d93 100644
--- a/lib/test-worker.js
+++ b/lib/test-worker.js
@@ -13,11 +13,12 @@ var Promise = require('bluebird');
 // Bluebird specific
 Promise.longStackTraces();
 
-(opts.require || []).forEach(require);
-
-process.installSourceMapSupport();
+// Ignore, assume this only installs babel-register which is now built-in.
+// (opts.require || []).forEach(require);
 
+var fs = require('fs');
 var currentlyUnhandled = require('currently-unhandled')();
+var cacheWorker = require('./babel/cache-worker');
 var serializeError = require('./serialize-error');
 var send = process.send;
 var throwsHelper = require('./throws-helper');
@@ -25,12 +26,19 @@ var throwsHelper = require('./throws-helper');
 // check if test files required ava and show error, when they didn't
 exports.avaRequired = false;
 
-process.installPrecompilerHook();
-
 var dependencies = [];
 process.installDependencyTracking(dependencies, testPath);
 
-require(testPath); // eslint-disable-line import/no-dynamic-require
+cacheWorker.runTest({
+	testPath: testPath,
+	babelConfig: opts.babel,
+	loadWorker: function () {
+		return require('./babel/bundle').loadWorker({
+			cachedData: fs.readFileSync(opts.bundle.cachedDataFile),
+			code: fs.readFileSync(opts.bundle.codeFile)
+		});
+	}
+});
 
 process.on('unhandledRejection', throwsHelper);
 
diff --git a/package.json b/package.json
index f16a20568..70ed9ff33 100644
--- a/package.json
+++ b/package.json
@@ -43,7 +43,7 @@
     "node": ">=0.10.0"
   },
   "scripts": {
-    "test": "xo && nyc --cache --reporter=lcov --reporter=text tap --no-cov --timeout=150 test/*.js test/reporters/*.js",
+    "test": "scripts/xo.js && nyc --cache --reporter=lcov --reporter=text tap --no-cov --timeout=150 test/*.js test/reporters/*.js",
     "test-win": "tap --no-cov --reporter=classic --timeout=150 test/*.js test/reporters/*.js",
     "visual": "node test/visual/run-visual-tests.js",
     "prepublish": "npm run make-ts",
@@ -104,6 +104,7 @@
     "babel-preset-stage-2": "^6.17.0",
     "babel-runtime": "^6.11.6",
     "bluebird": "^3.0.0",
+    "cached-module-loader": "0.0.2",
     "caching-transform": "^1.0.0",
     "chalk": "^1.0.0",
     "chokidar": "^1.4.2",
@@ -117,6 +118,7 @@
     "core-assert": "^0.2.0",
     "currently-unhandled": "^0.4.1",
     "debug": "^2.2.0",
+    "default-require-extensions": "^1.0.0",
     "empower-core": "^0.6.1",
     "figures": "^1.4.0",
     "find-cache-dir": "^0.1.1",
@@ -184,7 +186,7 @@
     "source-map-fixtures": "^2.1.0",
     "tap": "^7.1.2",
     "touch": "^1.0.0",
-    "xo": "^0.16.0",
+    "xo": "^0.17.0",
     "zen-observable": "^0.3.0"
   },
   "xo": {
diff --git a/profile.js b/profile.js
index 3cda7afef..1662b062a 100644
--- a/profile.js
+++ b/profile.js
@@ -106,7 +106,7 @@ events.on('results', function (data) {
 	if (process.exit) {
 		// Delay is For Node 0.10 which emits uncaughtExceptions async.
 		setTimeout(function () {
-			process.exit(data.stats.failCount + uncaughtExceptionCount); // eslint-disable-line xo/no-process-exit
+			process.exit(data.stats.failCount + uncaughtExceptionCount); // eslint-disable-line unicorn/no-process-exit
 		}, 20);
 	}
 });
@@ -133,5 +133,5 @@ if (console.profile) {
 }
 
 setImmediate(function () {
-	require('./lib/test-worker');
+	require('./lib/test-worker'); // eslint-disable-line import/no-unassigned-import
 });
diff --git a/scripts/xo.js b/scripts/xo.js
new file mode 100755
index 000000000..e06078278
--- /dev/null
+++ b/scripts/xo.js
@@ -0,0 +1,10 @@
+#!/usr/bin/env node
+/* eslint-disable import/no-unassigned-import */
+'use strict';
+
+var major = Number(process.version.match(/^v(\d+)/)[1]);
+if (major >= 4) {
+	require('xo/cli');
+} else {
+	console.warn('Linting requires Node.js >=4');
+}
diff --git a/test/cli.js b/test/cli.js
index 3982a5ea9..11e2e736c 100644
--- a/test/cli.js
+++ b/test/cli.js
@@ -68,7 +68,7 @@ function execCli(args, opts, cb) {
 }
 
 test('disallow invalid babel config shortcuts', function (t) {
-	execCli('es2015.js', {dirname: 'fixture/invalid-babel-config'}, function (err, stdout) {
+	execCli('es2015.js', {dirname: 'fixture/invalid-babel-config'}, function (err, stdout, stderr) {
 		t.ok(err);
 
 		var expectedOutput = '\n  ';
@@ -76,7 +76,7 @@ test('disallow invalid babel config shortcuts', function (t) {
 		expectedOutput += ' See ' + chalk.underline('https://github.com/avajs/ava#es2015-support') + ' for allowed values.';
 		expectedOutput += '\n';
 
-		t.is(stdout, expectedOutput);
+		t.is(stderr, expectedOutput);
 		t.end();
 	});
 });
@@ -361,7 +361,7 @@ test('prefers local version of ava', function (t) {
 	}
 
 	proxyquire('../cli', {
-		'debug': debugStub,
+		debug: debugStub,
 		'resolve-cwd': resolveCwdStub
 	});
 
diff --git a/test/visual/lorem-ipsum.js b/test/visual/lorem-ipsum.js
index 4512179f6..74f2cb387 100644
--- a/test/visual/lorem-ipsum.js
+++ b/test/visual/lorem-ipsum.js
@@ -1,7 +1,7 @@
 'use strict';
 var delay = require('delay');
 var test = require('../../');
-require('./print-lorem-ipsum');
+require('./print-lorem-ipsum'); // eslint-disable-line import/no-unassigned-import
 
 async function testFn(t) {
 	await delay(40);
diff --git a/test/visual/run-visual-tests.js b/test/visual/run-visual-tests.js
index 7ab61de8f..67f8d9292 100644
--- a/test/visual/run-visual-tests.js
+++ b/test/visual/run-visual-tests.js
@@ -1,5 +1,5 @@
 'use strict';
-require('loud-rejection');
+require('loud-rejection'); // eslint-disable-line import/no-unassigned-import
 var path = require('path');
 var childProcess = require('child_process');
 var chalk = require('chalk');
diff --git a/test/watcher.js b/test/watcher.js
index b03e9edd1..c18340f3d 100644
--- a/test/watcher.js
+++ b/test/watcher.js
@@ -53,8 +53,8 @@ group('chokidar', function (beforeEach, test, group) {
 	function proxyWatcher(opts) {
 		return proxyquire.noCallThru().load('../lib/watcher', opts ||
 			{
-				'chokidar': chokidar,
-				'debug': function (name) {
+				chokidar: chokidar,
+				debug: function (name) {
 					return function () {
 						var args = [name];
 						args.push.apply(args, arguments);