diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index c8429e9..25d7743 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -5,6 +5,7 @@ Changelog
 TBA
 ===
 
+* ``exclude_files`` patterns now match paths relative to their ``CPPLINT.cfg`` instead of only the next path component. (#254)
 * Fixed a whitespace/newline false positive for control conditions containing lambdas. (#410)
 * We now error on relative include paths (``./``, ``../``). (#432)
    * This makes ``#include "./foo.h"`` produce two separate errors: that foo.cpp should include foo.h and that relative paths are not allowed.
diff --git a/cpplint.py b/cpplint.py
index 41c3bb0..3f001aa 100755
--- a/cpplint.py
+++ b/cpplint.py
@@ -268,8 +268,10 @@
     through --filter command-line flag.
 
     "exclude_files" allows to specify a regular expression to be matched against
-    a file name. If the expression matches, the file is skipped and not run
-    through the linter.
+    the file path relative to the CPPLINT.cfg directory. Paths use "/" as the
+    separator on all platforms. If the expression matches, the file is skipped
+    and not run through the linter. To exclude a directory subtree, use a prefix
+    pattern such as "^bar/" rather than an anchored directory pattern like "^bar$".
 
     "linelength" allows to specify the allowed line length for the project.
 
@@ -7602,12 +7604,14 @@ def ProcessConfigOverrides(filename):
     """
 
     abs_filename = os.path.abspath(filename)
+    relative_filename = ""
     cfg_filters = []
     keep_looking = True
     while keep_looking:
         abs_path, base_name = os.path.split(abs_filename)
         if not base_name:
             break  # Reached the root directory.
+        relative_filename = f"{base_name}/{relative_filename}" if relative_filename else base_name
 
         cfg_file = os.path.join(abs_path, _config_filename)
         abs_filename = abs_path
@@ -7629,24 +7633,20 @@ def ProcessConfigOverrides(filename):
                     elif name == "filter":
                         cfg_filters.append(val)
                     elif name == "exclude_files":
-                        # When matching exclude_files pattern, use the base_name of
-                        # the current file name or the directory name we are processing.
+                        # Match the target path relative to this configuration file.
                         # For example, if we are checking for lint errors in /foo/bar/baz.cc
-                        # and we found the .cfg file at /foo/CPPLINT.cfg, then the config
-                        # file's "exclude_files" filter is meant to be checked against "bar"
-                        # and not "baz" nor "bar/baz.cc".
-                        if base_name:
-                            pattern = re.compile(val)
-                            if pattern.match(base_name):
-                                if _cpplint_state.quiet:
-                                    # Suppress "Ignoring file" warning when using --quiet.
-                                    return False
-                                _cpplint_state.PrintInfo(
-                                    f'Ignoring "{filename}": file excluded by "{cfg_file}". '
-                                    'File path component "%s" matches '
-                                    'pattern "%s"\n' % (base_name, val)
-                                )
+                        # and we found the .cfg file at /foo/CPPLINT.cfg, match against
+                        # "bar/baz.cc". Use forward slashes consistently across platforms.
+                        pattern = re.compile(val)
+                        if pattern.match(relative_filename):
+                            if _cpplint_state.quiet:
+                                # Suppress "Ignoring file" warning when using --quiet.
                                 return False
+                            _cpplint_state.PrintInfo(
+                                f'Ignoring "{filename}": file excluded by "{cfg_file}". '
+                                'File path "%s" matches pattern "%s"\n' % (relative_filename, val)
+                            )
+                            return False
                     elif name == "linelength":
                         global _line_length
                         try:
diff --git a/cpplint_unittest.py b/cpplint_unittest.py
index 032ecc5..9075712 100755
--- a/cpplint_unittest.py
+++ b/cpplint_unittest.py
@@ -7286,6 +7286,63 @@ def testInlineAssembly(self):
         assert len(self.nesting_state.stack) == 0
 
 
+class TestConfigOverrides:
+    @staticmethod
+    def _write_file(path, content=""):
+        path.parent.mkdir(parents=True, exist_ok=True)
+        path.write_text(content, encoding="utf-8")
+
+    @pytest.mark.parametrize(
+        ("relative_path", "pattern", "should_process"),
+        [
+            ("baz.cc", "^baz[.]cc$", False),
+            ("bar/baz.cc", "^bar/baz[.]cc$", False),
+            ("bar/qux.cc", "^bar/baz[.]cc$", True),
+            ("bar/baz.cc", "^bar$", True),
+            ("bar/baz.cc", "^bar/", False),
+        ],
+    )
+    def test_exclude_files_matches_relative_path(
+        self, tmp_path, relative_path, pattern, should_process
+    ):
+        source = tmp_path.joinpath(*relative_path.split("/"))
+        self._write_file(source)
+        self._write_file(
+            tmp_path / "CPPLINT.cfg",
+            f"exclude_files={pattern}\n",
+        )
+
+        assert cpplint.ProcessConfigOverrides(str(source)) is should_process
+
+    def test_parent_exclude_applies_through_nested_config(self, tmp_path):
+        source = tmp_path / "deps" / "library" / "source.cc"
+        self._write_file(source)
+        self._write_file(
+            tmp_path / "CPPLINT.cfg",
+            "exclude_files=^deps/library/source[.]cc$\n",
+        )
+        self._write_file(
+            tmp_path / "deps" / "CPPLINT.cfg",
+            "filter=-legal/copyright\n",
+        )
+
+        assert not cpplint.ProcessConfigOverrides(str(source))
+
+    def test_noparent_stops_parent_exclude(self, tmp_path):
+        source = tmp_path / "deps" / "library" / "source.cc"
+        self._write_file(source)
+        self._write_file(
+            tmp_path / "CPPLINT.cfg",
+            "exclude_files=^deps/library/source[.]cc$\n",
+        )
+        self._write_file(
+            tmp_path / "deps" / "CPPLINT.cfg",
+            "set noparent\n",
+        )
+
+        assert cpplint.ProcessConfigOverrides(str(source))
+
+
 class TestQuiet:
     @pytest.fixture(autouse=True)
     def setUp(self):