diff --git a/packages/docusaurus-plugin-content-docs/src/index.ts b/packages/docusaurus-plugin-content-docs/src/index.ts
index afb49ae0bf..192aab8d65 100644
--- a/packages/docusaurus-plugin-content-docs/src/index.ts
+++ b/packages/docusaurus-plugin-content-docs/src/index.ts
@@ -285,7 +285,6 @@ export default function pluginContentDocs(
                 {
                   loader: path.resolve(__dirname, './markdown/index.js'),
                   options: {
-                    siteConfig: context.siteConfig,
                     siteDir: context.siteDir,
                     docsDir: contentPath,
                     sourceToPermalink: sourceToPermalink,
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc1.md b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc1.md
new file mode 100644
index 0000000000..f1ec64b8de
--- /dev/null
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc1.md
@@ -0,0 +1,11 @@
+# Don't transform any link here
+
+![image1](assets/image1.png)
+
+# Don't replace inside fenced codeblock
+```md
+![doc4](doc4.md)
+```
+
+### Non-existing Docs
+- [hahaha](hahaha.md)
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc2.md b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc2.md
new file mode 100644
index 0000000000..50407eb435
--- /dev/null
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc2.md
@@ -0,0 +1,10 @@
+### Existing Docs
+
+- [doc1](doc1.md)
+- [doc2](./doc2.md)
+- [doc3](subdir/doc3.md)
+
+## Repeating Docs
+
+- [doc1](doc1.md)
+- [doc2](./doc2.md)
\ No newline at end of file
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc4.md b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc4.md
new file mode 100644
index 0000000000..4b9155e038
--- /dev/null
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/doc4.md
@@ -0,0 +1,18 @@
+### Existing Docs
+
+- [doc1][doc1]
+- [doc2][doc2]
+
+## Repeating Docs
+
+- [doc1][doc1]
+- [doc2][doc2]
+
+## Do not replace this
+```md
+![image1][image1]
+```
+
+[doc1]: doc1.md
+[doc2]: ./doc2.md
+[image1]: assets/image1.png
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/subdir/doc3.md b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/subdir/doc3.md
new file mode 100644
index 0000000000..6da3139921
--- /dev/null
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__fixtures__/docs/subdir/doc3.md
@@ -0,0 +1,2 @@
+### Relative linking
+- [doc1](../doc2.md)
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__snapshots__/linkify.test.ts.snap b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__snapshots__/linkify.test.ts.snap
new file mode 100644
index 0000000000..c00708c8f4
--- /dev/null
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/__snapshots__/linkify.test.ts.snap
@@ -0,0 +1,57 @@
+// Jest Snapshot v1, https://goo.gl/fbAQLP
+
+exports[`transform nothing 1`] = `
+"# Don't transform any link here
+
+![image1](assets/image1.png)
+
+# Don't replace inside fenced codeblock
+\`\`\`md
+![doc4](doc4.md)
+\`\`\`
+
+### Non-existing Docs
+- [hahaha](hahaha.md)
+"
+`;
+
+exports[`transform relative links 1`] = `
+"### Relative linking
+- [doc1](/docs/doc2)
+"
+`;
+
+exports[`transform to correct links 1`] = `
+"### Existing Docs
+
+- [doc1](/docs/doc1)
+- [doc2](/docs/doc2)
+- [doc3](/docs/subdir/doc3)
+
+## Repeating Docs
+
+- [doc1](/docs/doc1)
+- [doc2](/docs/doc2)"
+`;
+
+exports[`transforms reference links 1`] = `
+"### Existing Docs
+
+- [doc1][doc1]
+- [doc2][doc2]
+
+## Repeating Docs
+
+- [doc1][doc1]
+- [doc2][doc2]
+
+## Do not replace this
+\`\`\`md
+![image1][image1]
+\`\`\`
+
+[doc1]: /docs/doc1
+[doc2]: /docs/doc2
+[image1]: assets/image1.png
+"
+`;
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/linkify.test.ts b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/linkify.test.ts
new file mode 100644
index 0000000000..3fbd8616ba
--- /dev/null
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/__tests__/linkify.test.ts
@@ -0,0 +1,72 @@
+/**
+ * Copyright (c) 2017-present, Facebook, Inc.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ */
+
+import fs from 'fs-extra';
+import path from 'path';
+import linkify from '../linkify';
+import {SourceToPermalink} from '../../types';
+
+const siteDir = path.join(__dirname, '__fixtures__');
+const docsDir = path.join(siteDir, 'docs');
+const sourceToPermalink: SourceToPermalink = {
+  '@site/docs/doc1.md': '/docs/doc1',
+  '@site/docs/doc2.md': '/docs/doc2',
+  '@site/docs/subdir/doc3.md': '/docs/subdir/doc3',
+  '@site/docs/doc4.md': '/docs/doc4',
+};
+
+const transform = filepath => {
+  const content = fs.readFileSync(filepath, 'utf-8');
+  const transformedContent = linkify(
+    content,
+    filepath,
+    docsDir,
+    siteDir,
+    sourceToPermalink,
+  );
+  return [content, transformedContent];
+};
+
+test('transform nothing', () => {
+  const doc1 = path.join(docsDir, 'doc1.md');
+  const [content, transformedContent] = transform(doc1);
+  expect(transformedContent).toMatchSnapshot();
+  expect(content).toEqual(transformedContent);
+});
+
+test('transform to correct links', () => {
+  const doc2 = path.join(docsDir, 'doc2.md');
+  const [content, transformedContent] = transform(doc2);
+  expect(transformedContent).toMatchSnapshot();
+  expect(transformedContent).toContain('](/docs/doc1');
+  expect(transformedContent).toContain('](/docs/doc2');
+  expect(transformedContent).toContain('](/docs/subdir/doc3');
+  expect(transformedContent).not.toContain('](doc1.md)');
+  expect(transformedContent).not.toContain('](./doc2.md)');
+  expect(transformedContent).not.toContain('](subdir/doc3.md)');
+  expect(content).not.toEqual(transformedContent);
+});
+
+test('transform relative links', () => {
+  const doc3 = path.join(docsDir, 'subdir', 'doc3.md');
+  const [content, transformedContent] = transform(doc3);
+  expect(transformedContent).toMatchSnapshot();
+  expect(transformedContent).toContain('](/docs/doc2');
+  expect(transformedContent).not.toContain('](../doc2.md)');
+  expect(content).not.toEqual(transformedContent);
+});
+
+test('transforms reference links', () => {
+  const doc4 = path.join(docsDir, 'doc4.md');
+  const [content, transformedContent] = transform(doc4);
+  expect(transformedContent).toMatchSnapshot();
+  expect(transformedContent).toContain('[doc1]: /docs/doc1');
+  expect(transformedContent).toContain('[doc2]: /docs/doc2');
+  expect(transformedContent).not.toContain('[doc1]: doc1.md');
+  expect(transformedContent).not.toContain('[doc2]: ./doc2.md');
+  expect(content).not.toEqual(transformedContent);
+});
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/index.ts b/packages/docusaurus-plugin-content-docs/src/markdown/index.ts
index e577937ea6..407b2c3709 100644
--- a/packages/docusaurus-plugin-content-docs/src/markdown/index.ts
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/index.ts
@@ -5,60 +5,24 @@
  * LICENSE file in the root directory of this source tree.
  */
 
-import path from 'path';
 import {getOptions} from 'loader-utils';
-import {resolve} from 'url';
 import {loader} from 'webpack';
+import linkify from './linkify';
 
 export = function(fileString: string) {
   const callback = this.async();
-  const options = Object.assign({}, getOptions(this), {
-    filepath: this.resourcePath,
-  });
-  const {docsDir, siteDir, sourceToPermalink} = options;
-
-  // Determine the source dir. e.g: /docs, /website/versioned_docs/version-1.0.0
-  let sourceDir: string | undefined;
-  const thisSource = this.resourcePath;
-  if (thisSource.startsWith(docsDir)) {
-    sourceDir = docsDir;
-  }
-
-  let content = fileString;
-
-  // Replace internal markdown linking (except in fenced blocks).
-  if (sourceDir) {
-    let fencedBlock = false;
-    const lines = content.split('\n').map(line => {
-      if (line.trim().startsWith('```')) {
-        fencedBlock = !fencedBlock;
-      }
-      if (fencedBlock) return line;
-
-      let modifiedLine = line;
-      // Replace inline-style links or reference-style links e.g:
-      // This is [Document 1](doc1.md) -> we replace this doc1.md with correct link
-      // [doc1]: doc1.md -> we replace this doc1.md with correct link
-      const mdRegex = /(?:(?:\]\()|(?:\]:\s?))(?!https)([^'")\]\s>]+\.mdx?)/g;
-      let mdMatch = mdRegex.exec(modifiedLine);
-      while (mdMatch !== null) {
-        // Replace it to correct html link.
-        const mdLink = mdMatch[1];
-        const targetSource = `${sourceDir}/${mdLink}`;
-        const aliasedSource = (source: string) =>
-          `@site/${path.relative(siteDir, source)}`;
-        const permalink =
-          sourceToPermalink[aliasedSource(resolve(thisSource, mdLink))] ||
-          sourceToPermalink[aliasedSource(targetSource)];
-        if (permalink) {
-          modifiedLine = modifiedLine.replace(mdLink, permalink);
-        }
-        mdMatch = mdRegex.exec(modifiedLine);
-      }
-      return modifiedLine;
-    });
-    content = lines.join('\n');
-  }
-
-  return callback && callback(null, content);
+  const {docsDir, siteDir, sourceToPermalink} = getOptions(this);
+  return (
+    callback &&
+    callback(
+      null,
+      linkify(
+        fileString,
+        this.resourcePath,
+        docsDir,
+        siteDir,
+        sourceToPermalink,
+      ),
+    )
+  );
 } as loader.Loader;
diff --git a/packages/docusaurus-plugin-content-docs/src/markdown/linkify.ts b/packages/docusaurus-plugin-content-docs/src/markdown/linkify.ts
new file mode 100644
index 0000000000..0d3e360eb3
--- /dev/null
+++ b/packages/docusaurus-plugin-content-docs/src/markdown/linkify.ts
@@ -0,0 +1,63 @@
+/**
+ * Copyright (c) 2017-present, Facebook, Inc.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ */
+
+import path from 'path';
+import {resolve} from 'url';
+import {SourceToPermalink} from '../types';
+
+export default function(
+  fileString: string,
+  filePath: string,
+  docsDir: string,
+  siteDir: string,
+  sourceToPermalink: SourceToPermalink,
+) {
+  // Determine the source dir. e.g: /website/docs, /website/versioned_docs/version-1.0.0
+  let sourceDir: string | undefined;
+  const thisSource = filePath;
+  if (thisSource.startsWith(docsDir)) {
+    sourceDir = docsDir;
+  }
+
+  let content = fileString;
+
+  // Replace internal markdown linking (except in fenced blocks).
+  if (sourceDir) {
+    let fencedBlock = false;
+    const lines = content.split('\n').map(line => {
+      if (line.trim().startsWith('```')) {
+        fencedBlock = !fencedBlock;
+      }
+      if (fencedBlock) return line;
+
+      let modifiedLine = line;
+      // Replace inline-style links or reference-style links e.g:
+      // This is [Document 1](doc1.md) -> we replace this doc1.md with correct link
+      // [doc1]: doc1.md -> we replace this doc1.md with correct link
+      const mdRegex = /(?:(?:\]\()|(?:\]:\s?))(?!https)([^'")\]\s>]+\.mdx?)/g;
+      let mdMatch = mdRegex.exec(modifiedLine);
+      while (mdMatch !== null) {
+        // Replace it to correct html link.
+        const mdLink = mdMatch[1];
+        const targetSource = `${sourceDir}/${mdLink}`;
+        const aliasedSource = (source: string) =>
+          `@site/${path.relative(siteDir, source)}`;
+        const permalink =
+          sourceToPermalink[aliasedSource(resolve(thisSource, mdLink))] ||
+          sourceToPermalink[aliasedSource(targetSource)];
+        if (permalink) {
+          modifiedLine = modifiedLine.replace(mdLink, permalink);
+        }
+        mdMatch = mdRegex.exec(modifiedLine);
+      }
+      return modifiedLine;
+    });
+    content = lines.join('\n');
+  }
+
+  return content;
+}