diff --git a/.gitignore b/.gitignore
index 96d44d49cb7fc..22284c685d32c 100644
--- a/.gitignore
+++ b/.gitignore
@@ -11,3 +11,4 @@ gutenberg.zip
 *.log
 phpcs.xml
 yarn.lock
+docker-compose.override.yml
diff --git a/bin/run-wp-unit-tests.sh b/bin/run-wp-unit-tests.sh
index 333bbea525d8e..cdea34e9dec45 100755
--- a/bin/run-wp-unit-tests.sh
+++ b/bin/run-wp-unit-tests.sh
@@ -27,8 +27,8 @@ fi
 
 echo Running with the following versions:
 if [ ${DOCKER} = "true" ]; then
-	docker-compose -f docker/docker-compose.yml run --rm wordpress_phpunit php -v
-	docker-compose -f docker/docker-compose.yml run --rm wordpress_phpunit phpunit --version
+	docker-compose run --rm wordpress_phpunit php -v
+	docker-compose run --rm wordpress_phpunit phpunit --version
 else
 	php -v
 	phpunit --version
diff --git a/bin/setup-local-env.sh b/bin/setup-local-env.sh
index 1fd78eddc7e03..69f4fdf431a44 100755
--- a/bin/setup-local-env.sh
+++ b/bin/setup-local-env.sh
@@ -4,10 +4,15 @@
 set -e
 
 # Change to the expected directory
-cd "$(dirname "$0")/../docker"
+cd "$(dirname "$0")/.."
 
 # Launch the containers
-docker-compose up -d
+if ! docker-compose up -d; then
+	# Launching may fail due to the docker config file directory having changed.
+	# Remove the old wordpress-dev container, and try again.
+	docker container rm -fv wordpress-dev
+	docker-compose up -d
+fi
 
 # Wait until the docker containers are setup properely
 echo "Attempting to connect to wordpress"
diff --git a/docker/docker-compose.yml b/docker-compose.yml
similarity index 87%
rename from docker/docker-compose.yml
rename to docker-compose.yml
index 365dbc0959c70..7f59ef133b2f2 100644
--- a/docker/docker-compose.yml
+++ b/docker-compose.yml
@@ -10,7 +10,7 @@ services:
       WORDPRESS_DB_PASSWORD: example
       ABSPATH: /usr/src/wordpress/
     volumes:
-      - ../:/var/www/html/wp-content/plugins/gutenberg
+      - .:/var/www/html/wp-content/plugins/gutenberg
     container_name: wordpress-dev
 
   mysql:
@@ -24,7 +24,7 @@ services:
     environment:
       PHPUNIT_DB_HOST: mysql
     volumes:
-      - ..:/app
+      - .:/app
       - testsuite:/tmp
 
 volumes:
diff --git a/package.json b/package.json
index e6d6de7b9115e..4112799a5be24 100644
--- a/package.json
+++ b/package.json
@@ -146,13 +146,13 @@
 		"test-php": "npm run lint-php && npm run test-unit-php",
 		"ci": "concurrently \"npm run lint && npm run build\" \"npm run test-unit:coverage-ci\"",
 		"fixtures:clean": "rimraf \"blocks/test/fixtures/*.+(json|serialized.html)\"",
-		"fixtures:server-registered": "docker-compose -f docker/docker-compose.yml run -w /var/www/html/wp-content/plugins/gutenberg --rm wordpress ./bin/get-server-blocks.php > blocks/test/server-registered.json",
+		"fixtures:server-registered": "docker-compose run -w /var/www/html/wp-content/plugins/gutenberg --rm wordpress ./bin/get-server-blocks.php > blocks/test/server-registered.json",
 		"fixtures:generate": "npm run fixtures:server-registered && cross-env GENERATE_MISSING_FIXTURES=y npm run test-unit",
 		"fixtures:regenerate": "npm run fixtures:clean && npm run fixtures:generate",
 		"package-plugin": "./bin/build-plugin-zip.sh",
 		"test-unit": "jest",
-		"test-unit-php": "docker-compose -f docker/docker-compose.yml run --rm wordpress_phpunit phpunit",
-		"test-unit-php-multisite": "docker-compose -f docker/docker-compose.yml run -e WP_MULTISITE=1 --rm wordpress_phpunit phpunit",
+		"test-unit-php": "docker-compose run --rm wordpress_phpunit phpunit",
+		"test-unit-php-multisite": "docker-compose run -e WP_MULTISITE=1 --rm wordpress_phpunit phpunit",
 		"test-unit:coverage": "jest --coverage",
 		"test-unit:coverage-ci": "jest --coverage --maxWorkers 1 && codecov",
 		"test-unit:watch": "jest --watch",