diff --git a/src/Make.cmd b/src/Make.cmd
index 6f88e5cc21b..e769e3072a9 100644
--- a/src/Make.cmd
+++ b/src/Make.cmd
@@ -6,6 +6,10 @@ ifeq ($(GOOS),windows)
 TARG:=$(TARG).exe
 endif
 
+ifeq ($(TARGDIR),)
+TARGDIR:=$(QUOTED_GOBIN)
+endif
+
 all: $(TARG)
 
 include $(QUOTED_GOROOT)/src/Make.common
@@ -13,20 +17,20 @@ include $(QUOTED_GOROOT)/src/Make.common
 PREREQ+=$(patsubst %,%.make,$(DEPS))
 
 $(TARG): _go_.$O
-	$(LD) -o $@ _go_.$O
+	$(LD) $(LDIMPORTS) -o $@ _go_.$O
 
 _go_.$O: $(GOFILES) $(PREREQ)
-	$(GC) -o $@ $(GOFILES)
+	$(GC) $(GCIMPORTS) -o $@ $(GOFILES)
 
-install: $(QUOTED_GOBIN)/$(TARG)
+install: $(TARGDIR)/$(TARG)
 
-$(QUOTED_GOBIN)/$(TARG): $(TARG)
-	cp -f $(TARG) $(QUOTED_GOBIN)
+$(TARGDIR)/$(TARG): $(TARG)
+	cp -f $(TARG) $(TARGDIR)
 
 CLEANFILES+=$(TARG) _test _testmain.go
 
 nuke: clean
-	rm -f $(QUOTED_GOBIN)/$(TARG)
+	rm -f $(TARGDIR)/$(TARG)
 
 # for gotest
 testpackage: _test/main.a
@@ -40,7 +44,7 @@ _test/main.a: _gotest_.$O
 	gopack grc $@ _gotest_.$O
 
 _gotest_.$O: $(GOFILES) $(GOTESTFILES)
-	$(GC) -o $@ $(GOFILES) $(GOTESTFILES)
+	$(GC) $(GCIMPORTS) -o $@ $(GOFILES) $(GOTESTFILES)
 
 importpath:
 	echo main
diff --git a/src/Make.pkg b/src/Make.pkg
index 59ce56ac0d9..966bc61c7e3 100644
--- a/src/Make.pkg
+++ b/src/Make.pkg
@@ -31,7 +31,11 @@ endif
 
 pkgdir=$(QUOTED_GOROOT)/pkg/$(GOOS)_$(GOARCH)
 
-INSTALLFILES+=$(pkgdir)/$(TARG).a
+ifeq ($(TARGDIR),)
+TARGDIR:=$(pkgdir)
+endif
+
+INSTALLFILES+=$(TARGDIR)/$(TARG).a
 
 # The rest of the cgo rules are below, but these variable updates
 # must be done here so they apply to the main rules.
@@ -46,7 +50,7 @@ GOFILES+=$(patsubst %.swig,_obj/%.go,$(patsubst %.swigcxx,%.swig,$(SWIGFILES)))
 OFILES+=$(patsubst %.swig,_obj/%_gc.$O,$(patsubst %.swigcxx,%.swig,$(SWIGFILES)))
 SWIG_PREFIX=$(subst /,-,$(TARG))
 SWIG_SOS+=$(patsubst %.swig,_obj/$(SWIG_PREFIX)-%.so,$(patsubst %.swigcxx,%.swig,$(SWIGFILES)))
-INSTALLFILES+=$(patsubst %.swig,$(pkgdir)/swig/$(SWIG_PREFIX)-%.so,$(patsubst %.swigcxx,%.swig,$(SWIGFILES)))
+INSTALLFILES+=$(patsubst %.swig,$(TARGDIR)/swig/$(SWIG_PREFIX)-%.so,$(patsubst %.swigcxx,%.swig,$(SWIGFILES)))
 endif
 
 PREREQ+=$(patsubst %,%.make,$(DEPS))
@@ -67,22 +71,22 @@ bench:
 	gotest -test.bench=. -test.run="Do not run tests"
 
 nuke: clean
-	rm -f $(pkgdir)/$(TARG).a
+	rm -f $(TARGDIR)/$(TARG).a
 
 testpackage-clean:
 	rm -f _test/$(TARG).a
 
 install: $(INSTALLFILES)
 
-$(pkgdir)/$(TARG).a: _obj/$(TARG).a
-	@test -d $(QUOTED_GOROOT)/pkg && mkdir -p $(pkgdir)/$(dir)
+$(TARGDIR)/$(TARG).a: _obj/$(TARG).a
+	@test -d $(QUOTED_GOROOT)/pkg && mkdir -p $(TARGDIR)/$(dir)
 	cp _obj/$(TARG).a "$@"
 
 _go_.$O: $(GOFILES) $(PREREQ)
-	$(GC) -o $@ $(GOFILES)
+	$(GC) $(GCIMPORTS) -o $@ $(GOFILES)
 
 _gotest_.$O: $(GOFILES) $(GOTESTFILES) $(PREREQ)
-	$(GC) -o $@ $(GOFILES) $(GOTESTFILES)
+	$(GC) $(GCIMPORTS) -o $@ $(GOFILES) $(GOTESTFILES)
 
 _obj/$(TARG).a: _go_.$O $(OFILES)
 	@mkdir -p _obj/$(dir)
@@ -222,13 +226,13 @@ _obj/$(SWIG_PREFIX)-%.so: _obj/%_wrap.o
 _obj/$(SWIG_PREFIX)-%.so: _obj/%_wrapcxx.o
 	$(HOST_CXX) $(_CGO_CFLAGS_$(GOARCH)) -o $@ $^ $(SWIG_LDFLAGS) $(_CGO_LDFLAGS_$(GOOS)) $(_SWIG_LDFLAGS_$(GOOS))
 
-$(pkgdir)/swig/$(SWIG_PREFIX)-%.so: _obj/$(SWIG_PREFIX)-%.so
-	@test -d $(QUOTED_GOROOT)/pkg && mkdir -p $(pkgdir)/swig
+$(TARGDIR)/swig/$(SWIG_PREFIX)-%.so: _obj/$(SWIG_PREFIX)-%.so
+	@test -d $(QUOTED_GOROOT)/pkg && mkdir -p $(TARGDIR)/swig
 	cp $< "$@"
 
 all: $(SWIG_SOS)
 
-SWIG_RPATH=-r $(pkgdir)/swig
+SWIG_RPATH=-r $(TARGDIR)/swig
 
 endif
 
diff --git a/src/cmd/goinstall/Makefile b/src/cmd/goinstall/Makefile
index aaf202ee794..202797cd561 100644
--- a/src/cmd/goinstall/Makefile
+++ b/src/cmd/goinstall/Makefile
@@ -10,6 +10,7 @@ GOFILES=\
 	main.go\
 	make.go\
 	parse.go\
+	path.go\
 	syslist.go\
 
 CLEANFILES+=syslist.go
diff --git a/src/cmd/goinstall/download.go b/src/cmd/goinstall/download.go
index 88befc0dc74..7dad596abc4 100644
--- a/src/cmd/goinstall/download.go
+++ b/src/cmd/goinstall/download.go
@@ -37,15 +37,15 @@ var bitbucket = regexp.MustCompile(`^(bitbucket\.org/[a-z0-9A-Z_.\-]+/[a-z0-9A-Z
 var launchpad = regexp.MustCompile(`^(launchpad\.net/([a-z0-9A-Z_.\-]+(/[a-z0-9A-Z_.\-]+)?|~[a-z0-9A-Z_.\-]+/(\+junk|[a-z0-9A-Z_.\-]+)/[a-z0-9A-Z_.\-]+))(/[a-z0-9A-Z_.\-/]+)?$`)
 
 // download checks out or updates pkg from the remote server.
-func download(pkg string) (string, os.Error) {
+func download(pkg, srcDir string) os.Error {
 	if strings.Contains(pkg, "..") {
-		return "", os.ErrorString("invalid path (contains ..)")
+		return os.ErrorString("invalid path (contains ..)")
 	}
 	if m := bitbucket.FindStringSubmatch(pkg); m != nil {
-		if err := vcsCheckout(&hg, m[1], "http://"+m[1], m[1]); err != nil {
-			return "", err
+		if err := vcsCheckout(&hg, srcDir, m[1], "http://"+m[1], m[1]); err != nil {
+			return err
 		}
-		return root + pkg, nil
+		return nil
 	}
 	if m := googlecode.FindStringSubmatch(pkg); m != nil {
 		var v *vcs
@@ -58,29 +58,29 @@ func download(pkg string) (string, os.Error) {
 			// regexp only allows hg, svn to get through
 			panic("missing case in download: " + pkg)
 		}
-		if err := vcsCheckout(v, m[1], "https://"+m[1], m[1]); err != nil {
-			return "", err
+		if err := vcsCheckout(v, srcDir, m[1], "https://"+m[1], m[1]); err != nil {
+			return err
 		}
-		return root + pkg, nil
+		return nil
 	}
 	if m := github.FindStringSubmatch(pkg); m != nil {
 		if strings.HasSuffix(m[1], ".git") {
-			return "", os.ErrorString("repository " + pkg + " should not have .git suffix")
+			return os.ErrorString("repository " + pkg + " should not have .git suffix")
 		}
-		if err := vcsCheckout(&git, m[1], "http://"+m[1]+".git", m[1]); err != nil {
-			return "", err
+		if err := vcsCheckout(&git, srcDir, m[1], "http://"+m[1]+".git", m[1]); err != nil {
+			return err
 		}
-		return root + pkg, nil
+		return nil
 	}
 	if m := launchpad.FindStringSubmatch(pkg); m != nil {
 		// Either lp.net/<project>[/<series>[/<path>]]
 		//	 or lp.net/~<user or team>/<project>/<branch>[/<path>]
-		if err := vcsCheckout(&bzr, m[1], "https://"+m[1], m[1]); err != nil {
-			return "", err
+		if err := vcsCheckout(&bzr, srcDir, m[1], "https://"+m[1], m[1]); err != nil {
+			return err
 		}
-		return root + pkg, nil
+		return nil
 	}
-	return "", os.ErrorString("unknown repository: " + pkg)
+	return os.ErrorString("unknown repository: " + pkg)
 }
 
 // a vcs represents a version control system
@@ -172,8 +172,8 @@ func (v *vcs) updateRepo(dst string) os.Error {
 // exists and -u was specified on the command line)
 // the repository at tag/branch "release".  If there is no
 // such tag or branch, it falls back to the repository tip.
-func vcsCheckout(vcs *vcs, pkgprefix, repo, dashpath string) os.Error {
-	dst := filepath.Join(root, filepath.FromSlash(pkgprefix))
+func vcsCheckout(vcs *vcs, srcDir, pkgprefix, repo, dashpath string) os.Error {
+	dst := filepath.Join(srcDir, filepath.FromSlash(pkgprefix))
 	dir, err := os.Stat(filepath.Join(dst, vcs.metadir))
 	if err == nil && !dir.IsDirectory() {
 		return os.ErrorString("not a directory: " + dst)
diff --git a/src/cmd/goinstall/main.go b/src/cmd/goinstall/main.go
index 8082ace6b48..6cd92907a4c 100644
--- a/src/cmd/goinstall/main.go
+++ b/src/cmd/goinstall/main.go
@@ -150,6 +150,7 @@ func install(pkg, parent string) {
 	// Check whether package is local or remote.
 	// If remote, download or update it.
 	var dir string
+	proot := gopath[0] // default to GOROOT
 	local := false
 	if strings.HasPrefix(pkg, "http://") {
 		fmt.Fprintf(os.Stderr, "%s: %s: 'http://' used in remote path, try '%s'\n", argv0, pkg, pkg[7:])
@@ -163,8 +164,9 @@ func install(pkg, parent string) {
 		dir = filepath.Join(root, filepath.FromSlash(pkg))
 		local = true
 	} else {
-		var err os.Error
-		dir, err = download(pkg)
+		proot = findPkgroot(pkg)
+		err := download(pkg, proot.srcDir())
+		dir = filepath.Join(proot.srcDir(), pkg)
 		if err != nil {
 			fmt.Fprintf(os.Stderr, "%s: %s: %s\n", argv0, pkg, err)
 			errors = true
@@ -196,7 +198,7 @@ func install(pkg, parent string) {
 	// Install this package.
 	if !errors {
 		isCmd := dirInfo.pkgName == "main"
-		if err := domake(dir, pkg, local, isCmd); err != nil {
+		if err := domake(dir, pkg, proot, local, isCmd); err != nil {
 			fmt.Fprintf(os.Stderr, "%s: installing %s: %s\n", argv0, pkg, err)
 			errors = true
 		} else if !local && *logPkgs {
diff --git a/src/cmd/goinstall/make.go b/src/cmd/goinstall/make.go
index 87142043521..b2ca82b4695 100644
--- a/src/cmd/goinstall/make.go
+++ b/src/cmd/goinstall/make.go
@@ -18,7 +18,7 @@ import (
 // For non-local packages or packages without Makefiles,
 // domake generates a standard Makefile and passes it
 // to make on standard input.
-func domake(dir, pkg string, local, isCmd bool) (err os.Error) {
+func domake(dir, pkg string, root *pkgroot, local, isCmd bool) (err os.Error) {
 	needMakefile := true
 	if local {
 		_, err := os.Stat(dir + "/Makefile")
@@ -29,7 +29,7 @@ func domake(dir, pkg string, local, isCmd bool) (err os.Error) {
 	cmd := []string{"gomake"}
 	var makefile []byte
 	if needMakefile {
-		if makefile, err = makeMakefile(dir, pkg, isCmd); err != nil {
+		if makefile, err = makeMakefile(dir, pkg, root, isCmd); err != nil {
 			return err
 		}
 		cmd = append(cmd, "-f-")
@@ -44,8 +44,12 @@ func domake(dir, pkg string, local, isCmd bool) (err os.Error) {
 // makeMakefile computes the standard Makefile for the directory dir
 // installing as package pkg.  It includes all *.go files in the directory
 // except those in package main and those ending in _test.go.
-func makeMakefile(dir, pkg string, isCmd bool) ([]byte, os.Error) {
+func makeMakefile(dir, pkg string, root *pkgroot, isCmd bool) ([]byte, os.Error) {
+	if !safeName(pkg) {
+		return nil, os.ErrorString("unsafe name: " + pkg)
+	}
 	targ := pkg
+	targDir := root.pkgDir()
 	if isCmd {
 		// use the last part of the package name only
 		_, targ = filepath.Split(pkg)
@@ -57,9 +61,7 @@ func makeMakefile(dir, pkg string, isCmd bool) ([]byte, os.Error) {
 			}
 			_, targ = filepath.Split(d)
 		}
-	}
-	if !safeName(targ) {
-		return nil, os.ErrorString("unsafe name: " + pkg)
+		targDir = root.binDir()
 	}
 	dirInfo, err := scanDir(dir, isCmd)
 	if err != nil {
@@ -108,7 +110,7 @@ func makeMakefile(dir, pkg string, isCmd bool) ([]byte, os.Error) {
 	}
 
 	var buf bytes.Buffer
-	md := makedata{targ, "pkg", goFiles, oFiles, cgoFiles, cgoOFiles}
+	md := makedata{targ, targDir, "pkg", goFiles, oFiles, cgoFiles, cgoOFiles, imports}
 	if isCmd {
 		md.Type = "cmd"
 	}
@@ -121,7 +123,7 @@ func makeMakefile(dir, pkg string, isCmd bool) ([]byte, os.Error) {
 var safeBytes = []byte("+-./0123456789ABCDEFGHIJKLMNOPQRSTUVWXYZ_abcdefghijklmnopqrstuvwxyz")
 
 func safeName(s string) bool {
-	if len(s) == 0 {
+	if s == "" {
 		return false
 	}
 	for i := 0; i < len(s); i++ {
@@ -135,17 +137,20 @@ func safeName(s string) bool {
 // makedata is the data type for the makefileTemplate.
 type makedata struct {
 	Targ      string   // build target
+	TargDir   string   // build target directory
 	Type      string   // build type: "pkg" or "cmd"
 	GoFiles   []string // list of non-cgo .go files
 	OFiles    []string // list of .$O files
 	CgoFiles  []string // list of cgo .go files
 	CgoOFiles []string // list of cgo .o files, without extension
+	Imports   []string // gc/ld import paths
 }
 
 var makefileTemplate = template.MustParse(`
 include $(GOROOT)/src/Make.inc
 
 TARG={Targ}
+TARGDIR={TargDir}
 
 {.section GoFiles}
 GOFILES=\
@@ -175,6 +180,9 @@ CGO_OFILES=\
 {.end}
 
 {.end}
+GCIMPORTS={.repeated section Imports}-I "{@}" {.end}
+LDIMPORTS={.repeated section Imports}-L "{@}" {.end}
+
 include $(GOROOT)/src/Make.{Type}
 `,
 	nil)
diff --git a/src/cmd/goinstall/parse.go b/src/cmd/goinstall/parse.go
index 0e617903cf6..a4bb761f2be 100644
--- a/src/cmd/goinstall/parse.go
+++ b/src/cmd/goinstall/parse.go
@@ -88,6 +88,9 @@ func scanDir(dir string, allowMain bool) (info *dirInfo, err os.Error) {
 		if s == "main" && !allowMain {
 			continue
 		}
+		if s == "documentation" {
+			continue
+		}
 		if pkgName == "" {
 			pkgName = s
 		} else if pkgName != s {
diff --git a/src/cmd/goinstall/path.go b/src/cmd/goinstall/path.go
new file mode 100644
index 00000000000..1153e047149
--- /dev/null
+++ b/src/cmd/goinstall/path.go
@@ -0,0 +1,117 @@
+// Copyright 2011 The Go Authors.  All rights reserved.
+// Use of this source code is governed by a BSD-style
+// license that can be found in the LICENSE file.
+
+package main
+
+import (
+	"log"
+	"os"
+	"path/filepath"
+	"runtime"
+)
+
+var (
+	gopath      []*pkgroot
+	imports     []string
+	defaultRoot *pkgroot // default root for remote packages
+)
+
+// set up gopath: parse and validate GOROOT and GOPATH variables
+func init() {
+	p, err := newPkgroot(root)
+	if err != nil {
+		log.Fatalf("Invalid GOROOT %q: %v", root, err)
+	}
+	p.goroot = true
+	gopath = []*pkgroot{p}
+
+	for _, p := range filepath.SplitList(os.Getenv("GOPATH")) {
+		if p == "" {
+			continue
+		}
+		r, err := newPkgroot(p)
+		if err != nil {
+			log.Printf("Invalid GOPATH %q: %v", p, err)
+			continue
+		}
+		gopath = append(gopath, r)
+		imports = append(imports, r.pkgDir())
+
+		// select first GOPATH entry as default
+		if defaultRoot == nil {
+			defaultRoot = r
+		}
+	}
+
+	// use GOROOT if no valid GOPATH specified
+	if defaultRoot == nil {
+		defaultRoot = gopath[0]
+	}
+}
+
+type pkgroot struct {
+	path   string
+	goroot bool // TODO(adg): remove this once Go tree re-organized
+}
+
+func newPkgroot(p string) (*pkgroot, os.Error) {
+	if !filepath.IsAbs(p) {
+		return nil, os.NewError("must be absolute")
+	}
+	ep, err := filepath.EvalSymlinks(p)
+	if err != nil {
+		return nil, err
+	}
+	return &pkgroot{path: ep}, nil
+}
+
+func (r *pkgroot) srcDir() string {
+	if r.goroot {
+		return filepath.Join(r.path, "src", "pkg")
+	}
+	return filepath.Join(r.path, "src")
+}
+
+func (r *pkgroot) pkgDir() string {
+	goos, goarch := runtime.GOOS, runtime.GOARCH
+	if e := os.Getenv("GOOS"); e != "" {
+		goos = e
+	}
+	if e := os.Getenv("GOARCH"); e != "" {
+		goarch = e
+	}
+	return filepath.Join(r.path, "pkg", goos+"_"+goarch)
+}
+
+func (r *pkgroot) binDir() string {
+	return filepath.Join(r.path, "bin")
+}
+
+func (r *pkgroot) hasSrcDir(name string) bool {
+	fi, err := os.Stat(filepath.Join(r.srcDir(), name))
+	if err != nil {
+		return false
+	}
+	return fi.IsDirectory()
+}
+
+func (r *pkgroot) hasPkg(name string) bool {
+	fi, err := os.Stat(filepath.Join(r.pkgDir(), name+".a"))
+	if err != nil {
+		return false
+	}
+	return fi.IsRegular()
+	// TODO(adg): check object version is consistent
+}
+
+// findPkgroot searches each of the gopath roots
+// for the source code for the given import path.
+func findPkgroot(importPath string) *pkgroot {
+	for _, r := range gopath {
+		if r.hasSrcDir(importPath) {
+			return r
+		}
+	}
+	return defaultRoot
+}