diff --git a/.gitignore b/.gitignore
index adc965e7d..a2a34e27d 100644
--- a/.gitignore
+++ b/.gitignore
@@ -66,7 +66,6 @@ src/lxc/lxc-wait
 src/lxc/lxc-user-nic
 src/lxc/version.h
 
-src/python-lxc/setup.py
 src/python-lxc/build/
 src/python-lxc/lxc/__pycache__/
 
diff --git a/configure.ac b/configure.ac
index 9475b0ed2..13820ef88 100644
--- a/configure.ac
+++ b/configure.ac
@@ -847,7 +847,6 @@ AC_CONFIG_FILES([
 	src/lxc/lxc.functions
 	src/lxc/version.h
 	src/python-lxc/Makefile
-	src/python-lxc/setup.py
 
 	src/lua-lxc/Makefile
 
diff --git a/src/python-lxc/Makefile.am b/src/python-lxc/Makefile.am
index 4a014df7d..cbb274721 100644
--- a/src/python-lxc/Makefile.am
+++ b/src/python-lxc/Makefile.am
@@ -6,21 +6,25 @@ else
     DISTSETUPOPTS=
 endif
 
+INSTALL_OPTS := install --prefix=$(prefix) --no-compile $(DISTSETUPOPTS)
+CALL_SETUP_PY := cd @srcdir@ && $(PYTHON) setup.py build -b @abs_builddir@/build
+
 all:
-	$(PYTHON) setup.py build
+	$(CALL_SETUP_PY) build_ext -I @abs_top_srcdir@/src -L @abs_top_builddir@/src/lxc
 
 install:
-	if [ "$(DESTDIR)" = "" ]; then \
-		$(PYTHON) setup.py install --prefix=$(prefix) --no-compile $(DISTSETUPOPTS); \
+	if [ -z "$(DESTDIR)" ]; then \
+		$(CALL_SETUP_PY) $(INSTALL_OPTS); \
 	else \
-		$(PYTHON) setup.py install --root=$(DESTDIR) --prefix=$(prefix) --no-compile $(DISTSETUPOPTS); \
+		$(CALL_SETUP_PY) $(INSTALL_OPTS) --root=$(DESTDIR); \
 	fi
 
 clean-local:
-	rm -rf build
+	rm -rf @builddir@/build
 
 endif
 EXTRA_DIST = \
+	setup.py \
 	lxc.c \
 	lxc/__init__.py \
 	examples/api_test.py \
diff --git a/src/python-lxc/setup.py b/src/python-lxc/setup.py
new file mode 100644
index 000000000..d8cb166a0
--- /dev/null
+++ b/src/python-lxc/setup.py
@@ -0,0 +1,34 @@
+#!/usr/bin/env python3
+#
+# python-lxc: Python bindings for LXC
+#
+# (C) Copyright Canonical Ltd. 2012
+#
+# Authors:
+# Stéphane Graber <stgraber@ubuntu.com>
+#
+# This library is free software; you can redistribute it and/or
+# modify it under the terms of the GNU Lesser General Public
+# License as published by the Free Software Foundation; either
+# version 2.1 of the License, or (at your option) any later version.
+#
+# This library is distributed in the hope that it will be useful,
+# but WITHOUT ANY WARRANTY; without even the implied warranty of
+# MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
+# Lesser General Public License for more details.
+#
+# You should have received a copy of the GNU Lesser General Public
+# License along with this library; if not, write to the Free Software
+# Foundation, Inc., 51 Franklin Street, Fifth Floor, Boston, MA  02110-1301
+# USA
+
+from distutils.core import setup, Extension
+
+
+setup(name='_lxc',
+      version='0.1',
+      description='LXC',
+      packages=['lxc'],
+      package_dir={'lxc': 'lxc'},
+      ext_modules=[Extension('_lxc', sources=['lxc.c'], libraries=['lxc'])],
+      )
diff --git a/src/python-lxc/setup.py.in b/src/python-lxc/setup.py.in
deleted file mode 100644
index fcb676eb5..000000000
--- a/src/python-lxc/setup.py.in
+++ /dev/null
@@ -1,57 +0,0 @@
-#!/usr/bin/env python3
-#
-# python-lxc: Python bindings for LXC
-#
-# (C) Copyright Canonical Ltd. 2012
-#
-# Authors:
-# Stéphane Graber <stgraber@ubuntu.com>
-#
-# This library is free software; you can redistribute it and/or
-# modify it under the terms of the GNU Lesser General Public
-# License as published by the Free Software Foundation; either
-# version 2.1 of the License, or (at your option) any later version.
-#
-# This library is distributed in the hope that it will be useful,
-# but WITHOUT ANY WARRANTY; without even the implied warranty of
-# MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
-# Lesser General Public License for more details.
-#
-# You should have received a copy of the GNU Lesser General Public
-# License along with this library; if not, write to the Free Software
-# Foundation, Inc., 51 Franklin Street, Fifth Floor, Boston, MA  02110-1301
-# USA
-
-import os, os.path
-from distutils.core import setup, Extension
-
-# Distutils doesn't cope well with source files that have relative paths going
-# up in the directory tree: it tries to navigate outside of the build dir and
-# fails miserably. Therefore, we will instead cd to the source directory,
-# run this script from there, but write the build products to the correct path.
-#
-# Since we will be changing directories before building, we must transform
-# all the path variables to their forms relative to srcdir.
-
-srcdir, builddir, top_srcdir, top_builddir = map(os.path.abspath,
-    ["@srcdir@", "@builddir@", "@top_srcdir@", "@top_builddir@"])
-
-builddir, top_srcdir, top_builddir = map(lambda d: os.path.relpath(d, srcdir),
-    [builddir, top_srcdir, top_builddir])
-
-os.chdir(srcdir)
-
-module = Extension('_lxc', sources=['lxc.c'],
-                   include_dirs=[os.path.join(top_srcdir, 'src'),
-                                 os.path.join(top_builddir, 'src')],
-                   library_dirs=[os.path.join(top_builddir, 'src/lxc')],
-                   libraries=['lxc'])
-
-
-setup(name='_lxc',
-      version='0.1',
-      description='LXC',
-      packages=['lxc'],
-      package_dir={'lxc': 'lxc'},
-      ext_modules=[module],
-      options={'build': {'build_base': os.path.join(builddir, 'build')}})