diff --git a/xbps-src/etc/Makefile b/xbps-src/etc/Makefile
index 60d5be0fb16..85b2b151a4b 100644
--- a/xbps-src/etc/Makefile
+++ b/xbps-src/etc/Makefile
@@ -1,12 +1,23 @@
 include ../vars.mk
 
+# Find out the real path for the xbps-src distribdir.
+_CURDIR = $(shell dirname $(shell pwd))
+ifeq ($(shell basename ${_CURDIR}), xbps-src)
+DISTRIBDIR = $(subst /xbps-src,,${_CURDIR})
+else
+DISTRIBDIR = ${_CURDIR}
+endif
+
 CONF_FILE = xbps-src.conf
 
 .PHONY: all
 all:
+	sed -e "s|@@XBPS_DISTRIBDIR@@|${DISTRIBDIR}|" \
+		${CONF_FILE}.in > ${CONF_FILE}
 
 .PHONY: clean
 clean:
+	-rm -f ${CONF_FILE}
 
 .PHONY: install
 install:
diff --git a/xbps-src/etc/xbps-src.conf b/xbps-src/etc/xbps-src.conf.in
similarity index 97%
rename from xbps-src/etc/xbps-src.conf
rename to xbps-src/etc/xbps-src.conf.in
index c89382ef1d6..a8bc519ee98 100644
--- a/xbps-src/etc/xbps-src.conf
+++ b/xbps-src/etc/xbps-src.conf.in
@@ -6,7 +6,7 @@
 # Directory where the xbps-src GIT repository is stored. This is
 # required to be mounted in the chroot.
 #
-XBPS_DISTRIBUTIONDIR=$HOME/xbps-templates
+XBPS_DISTRIBUTIONDIR=@@XBPS_DISTRIBDIR@@
 
 #
 # Chroot master directory.