diff --git a/src/System/TestLoop.hs b/src/System/TestLoop.hs
--- a/src/System/TestLoop.hs
+++ b/src/System/TestLoop.hs
@@ -75,12 +75,33 @@
 --------------------------------------------------------------------------------
 
 -- | Parses your project's cabal file to find possible test-suites you
---   may have on your project, then it will start a file modification
---   tracking and once a file is changed it will run the testsuite
---   automatically.  in the test-suite's hs-source-dirs setting.
+--   may have on your project, then it will start a tracking process
+--   that listens to changes on files specified on the hs-source-dirs
+--   parameter of your testsuite, once a file is changed this process will
+--   run the testsuite automatically.
 --
 -- Use this function as the main of you testloop executable.
 -- e.g
+--
+-- On Cabal File
+--
+-- > test-suite lib-tests
+-- >   type: exitcode-stdio-1.0
+-- >   main-is: TestSuite.hs
+-- >   hs-source-dirs:
+-- >     src, test
+-- >   build-depends:
+-- >     -- test dependencies
+-- >
+-- > executable testloop
+-- >   main-is: TestLoop.hs
+-- >   hs-source-dirs:
+-- >     src, test
+-- >   build-depends:
+-- >     -- Your lib/app and test dependencies ... + testloop
+-- >     testloop
+--
+-- On test/TestLoop.hs
 --
 -- > module Main where
 -- >
diff --git a/src/System/TestLoop/Internal/Watcher.hs b/src/System/TestLoop/Internal/Watcher.hs
--- a/src/System/TestLoop/Internal/Watcher.hs
+++ b/src/System/TestLoop/Internal/Watcher.hs
@@ -2,10 +2,11 @@
 
 --------------------
 
+import           Control.Monad                       (liftM, sequence)
 import           Control.Monad.Trans                 (MonadIO (..))
 import           Data.List                           (intercalate, isPrefixOf,
-                                                      nub)
-import           Data.Monoid                         (mconcat)
+                                                      isSuffixOf, nub)
+import           Data.Monoid                         (mconcat, First(..))
 import qualified Filesystem.Path                     as FS
 import qualified Filesystem.Path.CurrentOS           as FS
 
@@ -36,18 +37,34 @@
 
 --------------------------------------------------------------------------------
 
-getPackageDatabaseFile :: IO (Maybe FilePath)
-getPackageDatabaseFile = do
-  cabalDevExists <- doesDirectoryExist "cabal-dev"
+
+_getPackageDatabaseFile :: FilePath
+                        -> (FilePath -> Bool)
+                        -> IO (Maybe FilePath)
+_getPackageDatabaseFile folderName isPackageDatabase = do
+  cabalDevExists <- doesDirectoryExist folderName
   if (not cabalDevExists)
      then return Nothing
      else do
        dir <- getCurrentDirectory
-       let cabalDevDir = joinPath [dir, "cabal-dev"]
+       let cabalDevDir = joinPath [dir, folderName]
        packages <- getDirectoryContents cabalDevDir
-       case filter ("packages-" `isPrefixOf`) packages of
+       case filter isPackageDatabase packages of
          (packagesFile:_) -> return $ Just (joinPath [cabalDevDir, packagesFile])
-         _ -> return Nothing
+
+getCabalDevPackageDatabaseFile :: IO (Maybe FilePath)
+getCabalDevPackageDatabaseFile =
+  _getPackageDatabaseFile "cabal-dev" ("packages-" `isPrefixOf`)
+
+getCabalSandboxPackageDatabaseFile :: IO (Maybe FilePath)
+getCabalSandboxPackageDatabaseFile =
+  _getPackageDatabaseFile ".cabal-sandbox" ("packages.conf.d" `isSuffixOf`)
+
+getPackageDatabaseFile :: IO (Maybe FilePath)
+getPackageDatabaseFile =
+  liftM (getFirst . mconcat . map First) $
+  sequence [ getCabalSandboxPackageDatabaseFile
+           , getCabalDevPackageDatabaseFile ]
 
 
 reloadTestSuite :: MainModuleName
diff --git a/testloop.cabal b/testloop.cabal
--- a/testloop.cabal
+++ b/testloop.cabal
@@ -10,7 +10,7 @@
 -- PVP summary:      +-+------- breaking API changes
 --                   | | +----- non-breaking API additions
 --                   | | | +--- code changes with no API change
-version:             0.1.0.2
+version:             0.1.1.0
 
 -- A short (one-line) description of the package.
 synopsis:            Quick feedback loop for test suites
@@ -21,7 +21,7 @@
   your project's test-suites whenever a haskell source file is
   modified.
 
-  To get started check out http://github.com/roman/testloop
+  To get started check out <http://github.com/roman/testloop>
 
 -- URL for the project homepage or repository.
 homepage:            http://github.com/roman/testloop