This file is used by ClassLoader.getResource() to find the current path to the test resources. Uses this code: URL resource = classloader.getResource("dir-flag.txt"); File resourceFile = new File(resource.getPath()); File testResourcesDir= resourceFile.getParentFile(); This way, the unit test can depend on a FileReader or somesuch, and still work fine regardless of ${user.dir} as long as the classpath is right. Useful for Eclipse...