diff --git a/lib/json_matchers/matcher.rb b/lib/json_matchers/matcher.rb
index 088c972..25cc592 100644
--- a/lib/json_matchers/matcher.rb
+++ b/lib/json_matchers/matcher.rb
@@ -34,7 +34,8 @@ def build_and_populate_document_store
       Dir.glob("#{JsonMatchers.schema_root}/**/*.json").
         map { |path| Pathname.new(path) }.
         map { |schema_path| Parser.new(schema_path).parse }.
-        each { |schema| document_store.add_schema(schema) }
+        map { |schema| document_store.add_schema(schema) }.
+        each { |schema| schema.expand_references!(store: document_store) }
 
       document_store
     end
diff --git a/spec/factories.rb b/spec/factories.rb
index 21a12e8..829d4f0 100644
--- a/spec/factories.rb
+++ b/spec/factories.rb
@@ -68,6 +68,7 @@
 
       initialize_with do
         FakeSchema.new(name, {
+          "id": "file:/#{name}.json#",
           "$schema": "https://json-schema.org/draft-04/schema#",
           "type": "array",
           "items": { "$ref": "file:/#{items.name}.json#" },
diff --git a/spec/json_matchers/match_json_schema_spec.rb b/spec/json_matchers/match_json_schema_spec.rb
index 3f4b6eb..f3a0d04 100644
--- a/spec/json_matchers/match_json_schema_spec.rb
+++ b/spec/json_matchers/match_json_schema_spec.rb
@@ -202,6 +202,26 @@
     expect(json_as_array).not_to match_json_schema(schema)
   end
 
+  it "validates against a schema that uses nested $refs" do
+    items = create(:schema, :referencing_locations)
+    schema = create(:schema, :referencing_locations, items: items)
+
+    json = build(:response, :location)
+    json_as_array = [[json.to_h]]
+
+    expect(json_as_array).to match_json_schema(schema)
+  end
+
+  it "fails against a schema that uses nested $refs" do
+    items = create(:schema, :referencing_locations)
+    schema = create(:schema, :referencing_locations, items: items)
+
+    json = build(:response, :invalid_location)
+    json_as_array = [[json.to_h]]
+
+    expect(json_as_array).not_to match_json_schema(schema)
+  end
+
   it "validates against a schema referencing with 'definitions'" do
     schema = create(:schema, :referencing_definitions)
 
diff --git a/test/json_matchers/minitest/assertions_test.rb b/test/json_matchers/minitest/assertions_test.rb
index ac474de..590f0d3 100644
--- a/test/json_matchers/minitest/assertions_test.rb
+++ b/test/json_matchers/minitest/assertions_test.rb
@@ -171,6 +171,27 @@ class AssertResponseMatchesSchemaTest < JsonMatchers::TestCase
     refute_matches_json_schema(json_as_array, schema)
   end
 
+  test "validates against a schema that uses nested $refs" do
+    items = create(:schema, :referencing_locations)
+    schema = create(:schema, :referencing_locations, items: items)
+
+    json = build(:response, :location)
+    json_as_array = [[json.to_h]]
+
+    assert_matches_json_schema(json_as_array, schema)
+  end
+
+  test "fails against a schema that uses nested $refs" do
+    items = create(:schema, :referencing_locations)
+    schema = create(:schema, :referencing_locations, items: items)
+
+    json = build(:response, :invalid_location)
+    json_as_array = [[json.to_h]]
+
+    refute_matches_json_schema(json_as_array, schema)
+  end
+
+
   test "validates against a schema referencing with 'definitions'" do
     schema = create(:schema, :referencing_definitions)