diff --git a/.gitignore b/.gitignore
index 397b8d1ea..f47f288c0 100644
--- a/.gitignore
+++ b/.gitignore
@@ -6,3 +6,5 @@ test/build/
 *.covered.js
 *.swp
 needs-transpile.js
+
+!*test/fixtures/cli/include-exclude/node_modules/
diff --git a/index.js b/index.js
index f98122e93..77d492678 100755
--- a/index.js
+++ b/index.js
@@ -2,6 +2,7 @@
 
 /* global __coverage__ */
 
+const arrayUniq = require('array-uniq')
 const arrify = require('arrify')
 const cachingTransform = require('caching-transform')
 const util = require('util')
@@ -247,16 +248,20 @@ NYC.prototype.instrumentAllFiles = function (input, output, cb) {
 }
 
 NYC.prototype.walkAllFiles = function (dir, visitor) {
-  var pattern = null
-  if (this.extensions.length === 1) {
-    pattern = '**/*' + this.extensions[0]
-  } else {
-    pattern = '**/*{' + this.extensions.join() + '}'
-  }
+  const pattern = (this.extensions.length === 1)
+    ? `**/*${this.extensions[0]}`
+    : `**/*{${this.extensions.join()}}`
 
-  glob.sync(pattern, { cwd: dir, nodir: true, ignore: this.exclude.exclude }).forEach(function (filename) {
-    visitor(filename)
+  let filesToWalk = glob.sync(pattern, { cwd: dir, nodir: true, ignore: this.exclude.exclude })
+
+  // package node-glob no longer observes negated excludes, so we need to restore these files ourselves
+  const excludeNegatedPaths = this.exclude.excludeNegated
+  excludeNegatedPaths.forEach(pattern => {
+    filesToWalk = filesToWalk.concat(glob.sync(pattern, { cwd: dir, nodir: true }))
   })
+  filesToWalk = arrayUniq(filesToWalk)
+
+  filesToWalk.forEach(visitor)
 }
 
 NYC.prototype._maybeInstrumentSource = function (code, filename, relFile) {
diff --git a/package-lock.json b/package-lock.json
index 10f0767a9..5f98c1fe6 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -215,6 +215,11 @@
         "es-abstract": "^1.7.0"
       }
     },
+    "array-uniq": {
+      "version": "2.0.0",
+      "resolved": "https://registry.npmjs.org/array-uniq/-/array-uniq-2.0.0.tgz",
+      "integrity": "sha512-O3QZEr+3wDj7otzF7PjNGs6CA3qmYMLvt5xGkjY/V0VxS+ovvqVo/5wKM/OVOAyuX4DTh9H31zE/yKtO66hTkg=="
+    },
     "arrify": {
       "version": "1.0.1",
       "resolved": "https://registry.npmjs.org/arrify/-/arrify-1.0.1.tgz",
diff --git a/package.json b/package.json
index 326571721..1d789a7ed 100644
--- a/package.json
+++ b/package.json
@@ -74,6 +74,7 @@
   "license": "ISC",
   "dependencies": {
     "archy": "^1.0.0",
+    "array-uniq": "^2.0.0",
     "arrify": "^1.0.1",
     "caching-transform": "^3.0.1",
     "convert-source-map": "^1.6.0",
diff --git a/test/fixtures/cli/include-exclude/exclude-negated.js b/test/fixtures/cli/include-exclude/exclude-negated.js
new file mode 100644
index 000000000..239a04e74
--- /dev/null
+++ b/test/fixtures/cli/include-exclude/exclude-negated.js
@@ -0,0 +1,2 @@
+'use strict';
+console.log('Hello, World!')
diff --git a/test/fixtures/cli/include-exclude/excluded.js b/test/fixtures/cli/include-exclude/excluded.js
new file mode 100644
index 000000000..239a04e74
--- /dev/null
+++ b/test/fixtures/cli/include-exclude/excluded.js
@@ -0,0 +1,2 @@
+'use strict';
+console.log('Hello, World!')
diff --git a/test/fixtures/cli/include-exclude/node_modules/cover-me.js b/test/fixtures/cli/include-exclude/node_modules/cover-me.js
new file mode 100644
index 000000000..239a04e74
--- /dev/null
+++ b/test/fixtures/cli/include-exclude/node_modules/cover-me.js
@@ -0,0 +1,2 @@
+'use strict';
+console.log('Hello, World!')
diff --git a/test/nyc-bin.js b/test/nyc-bin.js
index 1aae65b97..3529ee9ba 100644
--- a/test/nyc-bin.js
+++ b/test/nyc-bin.js
@@ -101,6 +101,48 @@ describe('the nyc cli', function () {
         done()
       })
     })
+
+    it('should allow negated exclude patterns', function (done) {
+      const args = [bin, '--all', '--exclude', '**/include-exclude/**', '--exclude', '!**/exclude-negated.js', process.execPath, './half-covered.js']
+
+      const proc = spawn(process.execPath, args, {
+        cwd: fixturesCLI,
+        env: env
+      })
+
+      let stdout = ''
+      proc.stdout.on('data', chunk => {
+        stdout += chunk
+      })
+
+      proc.on('close', code => {
+        code.should.equal(0)
+        stdout.should.not.match(/excluded\.js/)
+        stdout.should.match(/exclude-negated\.js/)
+        done()
+      })
+    })
+
+    it('should include \'node_modules\' using exclude patterns', function (done) {
+      const args = [bin, '--all', '--exclude', '!**/node_modules/**', process.execPath, './half-covered.js']
+
+      const proc = spawn(process.execPath, args, {
+        cwd: fixturesCLI,
+        env: env
+      })
+
+      let stdout = ''
+      proc.stdout.on('data', chunk => {
+        stdout += chunk
+      })
+
+      proc.on('close', code => {
+        code.should.equal(0)
+        stdout.should.match(/include-exclude\/node_modules/)
+        stdout.should.match(/cover-me\.js/)
+        done()
+      })
+    })
   })
 
   describe('--ignore-class-method', function () {