diff --git a/Makefile b/Makefile
index 7549b40d..4ca74a3f 100644
--- a/Makefile
+++ b/Makefile
@@ -19,7 +19,7 @@ extra_cxxflags :=
 # Makefile.config if it doesn't exist yet. And add Makefile.config to
 # our global dependency list.
 include Makefile.config
-Makefile.config: configure
+Makefile.config: $(srcdir)/configure
 	@echo ""
 	@echo "Note: Calling ./configure with no command-line arguments. This is often fine,"
 	@echo "      but if you want to specify any arguments (such as an alternate prefix"
diff --git a/Makefile.local b/Makefile.local
index 38ead11d..50bba640 100644
--- a/Makefile.local
+++ b/Makefile.local
@@ -12,7 +12,7 @@ PACKAGE=notmuch
 
 IS_GIT=$(shell if [ -d .git ] ; then echo yes ; else echo no; fi)
 
-VERSION:=$(shell cat version)
+VERSION:=$(shell cat ${srcdir}/version)
 ifneq ($(MAKECMDGOALS),release)
 ifneq ($(MAKECMDGOALS),release-message)
 ifeq ($(IS_GIT),yes)
@@ -81,7 +81,7 @@ dist: $(TAR_FILE)
 # targets in the case of parallel invocation of make (-j).
 #
 # We carefully ensure that our VERSION variable is passed down to any
-# sub-ordinate make invocations (which won't otherwhise know that they
+# sub-ordinate make invocations (which won't otherwise know that they
 # are part of the release and need to take the version from the
 # version file).
 .PHONY: release
diff --git a/TODO b/TODO
index a34d95fa..f8147b19 100644
--- a/TODO
+++ b/TODO
@@ -255,16 +255,6 @@ existing messages at the next database upgrade).
 Add support for the user to specify custom headers to be indexed (and
 re-index these for existing messages at the next database upgrade).
 
-Build system
-------------
-Fix to allow a non-source-directory build. For example, the below
-should be made to work:
-
-	mkdir build_dir
-	cd build_dir
-	../configure
-	make
-
 Test suite
 ----------
 Achieve 100% test coverage with the test suite.
diff --git a/compat/Makefile.local b/compat/Makefile.local
index 653fc710..504eb715 100644
--- a/compat/Makefile.local
+++ b/compat/Makefile.local
@@ -1,7 +1,7 @@
 # -*- makefile -*-
 
 dir := compat
-extra_cflags += -I$(dir)
+extra_cflags += -I$(srcdir)/$(dir)
 
 notmuch_compat_srcs :=
 
diff --git a/completion/Makefile.local b/completion/Makefile.local
index 755b0f7e..dfc12713 100644
--- a/completion/Makefile.local
+++ b/completion/Makefile.local
@@ -5,8 +5,8 @@ dir := completion
 # The dir variable will be re-assigned to later, so we can't use it
 # directly in any shell commands. Instead we save its value in other,
 # private variables that we can use in the commands.
-bash_script := $(dir)/notmuch-completion.bash
-zsh_script := $(dir)/notmuch-completion.zsh
+bash_script := $(srcdir)/$(dir)/notmuch-completion.bash
+zsh_script := $(srcdir)/$(dir)/notmuch-completion.zsh
 
 install: install-$(dir)
 
diff --git a/configure b/configure
index 3d1efb0b..157ecf39 100755
--- a/configure
+++ b/configure
@@ -1,5 +1,26 @@
 #! /bin/sh
 
+srcdir=$(dirname "$0")
+
+# For a non-srcdir configure invocation (such as ../configure), create
+# the directory structure and copy Makefiles.
+if [ "$srcdir" != "." ]; then
+
+    for dir in . $(grep "^subdirs *=" "$srcdir"/Makefile | sed -e "s/subdirs *= *//"); do
+	mkdir -p "$dir"
+	cp "$srcdir"/"$dir"/Makefile.local "$dir"
+	cp "$srcdir"/"$dir"/Makefile "$dir"
+    done
+
+    # Easiest way to get the test suite to work is to just copy the
+    # whole thing into the build directory.
+    cp -a "$srcdir"/test/* test
+
+    # Emacs only likes to generate compiled files next to the .el files
+    # by default so copy these as well (which is not ideal0.
+    cp -a "$srcdir"/emacs/*.el emacs
+fi
+
 # Set several defaults (optionally specified by the user in
 # environemnt variables)
 CC=${CC:-gcc}
@@ -424,7 +445,7 @@ EOF
 fi
 
 printf "Checking for getline... "
-if ${CC} -o compat/have_getline compat/have_getline.c > /dev/null 2>&1
+if ${CC} -o compat/have_getline "$srcdir"/compat/have_getline.c > /dev/null 2>&1
 then
     printf "Yes.\n"
     have_getline=1
@@ -435,7 +456,7 @@ fi
 rm -f compat/have_getline
 
 printf "Checking for strcasestr... "
-if ${CC} -o compat/have_strcasestr compat/have_strcasestr.c > /dev/null 2>&1
+if ${CC} -o compat/have_strcasestr "$srcdir"/compat/have_strcasestr.c > /dev/null 2>&1
 then
     printf "Yes.\n"
     have_strcasestr=1
@@ -508,6 +529,24 @@ cat > Makefile.config <<EOF
 # changes, (and this could happen by simply calling "make" if the
 # configure script is updated).
 
+srcdir = ${srcdir}
+
+# We use vpath directives (rather than the VPATH variable) since the
+# VPATH variable matches targets as well as prerequisites, (which is
+# not useful since then a target left-over from a srcdir build would
+# cause a target to not be built in the non-srcdir build).
+#
+# Also, we don't use a single "vpath % \$(srcdir)" here because we
+# don't want the vpath to trigger for our emacs lisp compilation,
+# (unless we first find a way to convince emacs to build the .elc
+# target in a directory other than the directory of the .el
+# prerequisite). In the meantime, we're actually copying in the .el
+# files, (which is quite ugly).
+vpath %.c \$(srcdir)
+vpath %.cc \$(srcdir)
+vpath %.1 \$(srcdir)
+vpath Makefile.% \$(srcdir)
+
 # The C compiler to use
 CC = ${CC}
 
diff --git a/emacs/Makefile.local b/emacs/Makefile.local
index 1c4166fe..1c09d87a 100644
--- a/emacs/Makefile.local
+++ b/emacs/Makefile.local
@@ -15,9 +15,9 @@ emacs_sources := \
 	$(dir)/coolj.el
 
 emacs_images := \
-	$(dir)/notmuch-logo.png
+	$(srcdir)/$(dir)/notmuch-logo.png
 
-emacs_bytecode := $(subst .el,.elc,$(emacs_sources))
+emacs_bytecode = $(emacs_sources:.el=.elc)
 
 %.elc: %.el
 	$(call quiet,EMACS) --directory emacs -batch -f batch-byte-compile $<
diff --git a/lib/Makefile.local b/lib/Makefile.local
index f4b2c7b9..d02a515c 100644
--- a/lib/Makefile.local
+++ b/lib/Makefile.local
@@ -45,7 +45,7 @@ endif
 endif
 
 dir := lib
-extra_cflags += -I$(dir) -fPIC
+extra_cflags += -I$(srcdir)/$(dir) -fPIC
 
 libnotmuch_c_srcs =		\
 	$(notmuch_compat_srcs)	\
@@ -85,13 +85,13 @@ install: install-$(dir)
 # but cannot be used reliably within commands, so copy its value to a
 # variable that is not reused.
 lib := $(dir)
-install-$(dir):
+install-$(dir): $(dir)/$(LIBNAME)
 	mkdir -p "$(DESTDIR)$(libdir)/"
 	install -m0644 "$(lib)/$(LIBNAME)" "$(DESTDIR)$(libdir)/"
 	ln -sf $(LIBNAME) "$(DESTDIR)$(libdir)/$(SONAME)"
 	ln -sf $(LIBNAME) "$(DESTDIR)$(libdir)/$(LINKER_NAME)"
 	mkdir -p "$(DESTDIR)$(includedir)"
-	install -m0644 "$(lib)/notmuch.h" "$(DESTDIR)$(includedir)/"
+	install -m0644 "$(srcdir)/$(lib)/notmuch.h" "$(DESTDIR)$(includedir)/"
 	$(LIBRARY_INSTALL_POST_COMMAND)
 
 SRCS  := $(SRCS) $(libnotmuch_c_srcs) $(libnotmuch_cxx_srcs)