diff --git a/lib/jekyll/site.rb b/lib/jekyll/site.rb
index 7dbf1336..32a21503 100644
--- a/lib/jekyll/site.rb
+++ b/lib/jekyll/site.rb
@@ -18,7 +18,7 @@ module Jekyll
       self.safe            = config['safe']
       self.source          = File.expand_path(config['source'])
       self.dest            = File.expand_path(config['destination'])
-      self.plugins         = Array(config['plugins']).map { |d| File.expand_path(d) }
+      self.plugins         = setup_plugins
       self.lsi             = config['lsi']
       self.pygments        = config['pygments']
       self.permalink_style = config['permalink'].to_sym
@@ -99,6 +99,14 @@ module Jekyll
       end
     end
 
+    def setup_plugins
+      if (config['plugins'] == Jekyll::DEFAULTS['plugins'])
+        [File.join(self.source, config['plugins'])]
+      else
+        Array(config['plugins']).map { |d| File.expand_path(d) }
+      end
+    end
+
     # Read Site data from disk and load it into internal data structures.
     #
     # Returns nothing.
diff --git a/test/test_site.rb b/test/test_site.rb
index 03f1886e..98a433b6 100644
--- a/test/test_site.rb
+++ b/test/test_site.rb
@@ -7,9 +7,9 @@ class TestSite < Test::Unit::TestCase
       assert_equal [File.join(Dir.pwd, '_plugins')], site.plugins
     end
 
-    should "have an array for plugins if passed as a string" do
-      site = Site.new(Jekyll::DEFAULTS.merge({'plugins' => '/tmp/plugins'}))
-      assert_equal ['/tmp/plugins'], site.plugins
+    should "look for plugins under the site directory by default" do
+      site = Site.new(Jekyll::DEFAULTS.merge({'source' => source_dir}))
+      assert_equal [File.join(source_dir, '_plugins')], site.plugins
     end
 
     should "have an array for plugins if passed as an array" do
@@ -26,6 +26,7 @@ class TestSite < Test::Unit::TestCase
       site = Site.new(Jekyll::DEFAULTS.merge({'plugins' => nil}))
       assert_equal [], site.plugins
     end
+
   end
   context "creating sites" do
     setup do