diff --git a/changelog/unreleased/40413 b/changelog/unreleased/40413
new file mode 100644
index 000000000000..ad82c5b612ee
--- /dev/null
+++ b/changelog/unreleased/40413
@@ -0,0 +1,11 @@
+Enhancement: Setting for recursive extra config.php search
+
+Before this change extra config.php files were required to be placed directly in the config folder.
+This change allows to have nested folders configuration structure, 
+enabled by config value OC_CONFIG_EXTRA_RECURSIVE_SEARCH, that can be useful in some deployments.
+
+NOTE: due to the fact that `config_extra_recursive_search` setting controls the configuration itself, 
+it is only possible to enable this via environment variable. It is not possible to enable it with *.config.php file.
+
+https://github.com/owncloud/core/pull/40413
+https://github.com/owncloud/enterprise/issues/5406
diff --git a/lib/private/Config.php b/lib/private/Config.php
index 2e7ff9357c53..dd5d7251c45f 100644
--- a/lib/private/Config.php
+++ b/lib/private/Config.php
@@ -216,6 +216,33 @@ protected function delete($key) {
 		], 'config', 'deletevalue');
 	}
 
+	/**
+	 * This function scans for extra config.php files.
+	 *
+	 * NOTE: due to the fact that `config_extra_recursive_search` setting controls the configuration itself,
+	 * it is only possible to enable this via environment variable. It is not possible to enable it with *.config.php file.
+	 *
+	 * @return string[] paths to extra config.php files
+	 */
+	private function findExtraConfigFiles() {
+		if ($this->getValue('config_extra_recursive_search', false) === 'true') {
+			$foundConfigFiles = [];
+			$configItr = new \RecursiveDirectoryIterator($this->configDir);
+			foreach (new \RecursiveIteratorIterator($configItr) as $file) {
+				// find all extra config files matching config file name,
+				// except for default config filepath
+				if (\preg_match("/{$this->configFileName}\$/", $file->getFileName()) &&
+						$file->getPathName() !== $this->configFilePath) {
+					$foundConfigFiles[] = $file->getPathName();
+				}
+			}
+			return $foundConfigFiles;
+		} else {
+			// default is to search in config directory (as of owncloud 10.11)
+			return \glob($this->configDir . '*.' . $this->configFileName);
+		}
+	}
+
 	/**
 	 * Loads the config file
 	 *
@@ -228,7 +255,7 @@ private function readData() {
 		$configFiles = [$this->configFilePath];
 
 		// Add all files in the config dir ending with the same file name
-		$extra = \glob($this->configDir.'*.'.$this->configFileName);
+		$extra = $this->findExtraConfigFiles();
 		if (\is_array($extra)) {
 			\natsort($extra);
 			$configFiles = \array_merge($configFiles, $extra);
diff --git a/tests/lib/ConfigTest.php b/tests/lib/ConfigTest.php
index c0b93cd79b4c..24e8dd2aa9bf 100644
--- a/tests/lib/ConfigTest.php
+++ b/tests/lib/ConfigTest.php
@@ -266,6 +266,48 @@ public function testConfigMerge() {
 		\unlink($additionalConfigPath);
 	}
 
+	public function providerNestedConfig() {
+		return [
+			[true],
+			[false]
+		];
+	}
+
+	/**
+	 * @dataProvider providerNestedConfig
+	 *
+	 * @param boolean $configExtraRecursiveSearchEnabled
+	 */
+	public function testNestedConfig($configExtraRecursiveSearchEnabled) {
+		// enable recursive search for extra config files
+		if ($configExtraRecursiveSearchEnabled) {
+			\putenv('OC_config_extra_recursive_search=true');
+		}
+
+		// Create additional config in nested dir
+		\mkdir($this->randomTmpDir.'nested1', 0755, true);
+		$additionalConfig = '<?php $CONFIG=array("php53"=>"totallyOutdated");';
+		$additionalConfigPath = $this->randomTmpDir.'nested1/additionalConfig.testconfig.php';
+		\file_put_contents($additionalConfigPath, $additionalConfig);
+
+		// Reinstantiate the config to force a read-in of the additional configs
+		$this->config = new \OC\Config($this->randomTmpDir, 'testconfig.php');
+
+		if ($configExtraRecursiveSearchEnabled) {
+			// nested config got correctly read
+			$this->assertSame('totallyOutdated', $this->config->getValue('php53', 'defaultValue'));
+			$this->assertStringEqualsFile($this->configFile, self::TESTCONTENT);
+		} else {
+			// nested config got ignored
+			$this->assertSame('defaultValue', $this->config->getValue('php53', 'defaultValue'));
+			$this->assertStringEqualsFile($this->configFile, self::TESTCONTENT);
+		}
+
+		// Cleanup
+		\putenv('OC_config_extra_recursive_search');
+		\unlink($additionalConfigPath);
+	}
+
 	private function checkConfigMatchesExpected($expectedConfig) {
 		foreach ($expectedConfig as $key => $value) {
 			$this->assertEquals($value, $this->config->getValue($key));