diff --git a/Makefile.config.in b/Makefile.config.in
index 48baa288..b9d9bd1c 100644
--- a/Makefile.config.in
+++ b/Makefile.config.in
@@ -9,6 +9,7 @@ OPENSSL_LIBS = @OPENSSL_LIBS@
 PACKAGE_NAME = @PACKAGE_NAME@
 PACKAGE_VERSION = @PACKAGE_VERSION@
 bindir = @bindir@
+bsddiff_compat_include = @bsddiff_compat_include@
 datadir = @datadir@
 datarootdir = @datarootdir@
 exec_prefix = @exec_prefix@
diff --git a/Makefile.new b/Makefile.new
index ed090a1f..b3ff2fc1 100644
--- a/Makefile.new
+++ b/Makefile.new
@@ -10,6 +10,7 @@ SUBS = \
   src/nix-env/Makefile.new \
   src/nix-daemon/Makefile.new \
   src/nix-log2xml/Makefile.new \
+  src/bsdiff-4.3/Makefile.new \
   corepkgs/Makefile.new
 
 GLOBAL_CXXFLAGS = -I . -I src -I src/libutil -I src/libstore -I src/libmain -I src/libexpr
diff --git a/mk/programs.mk b/mk/programs.mk
index e26e9af7..48f95c60 100644
--- a/mk/programs.mk
+++ b/mk/programs.mk
@@ -13,7 +13,8 @@ programs_list :=
 #
 # - $(1)_LDFLAGS: additional linker flags.
 #
-# - bindir: the directory where the program will be installed.
+# - $(1)_INSTALL_DIR: the directory where the program will be
+#   installed; defaults to $(bindir).
 define build-program =
   _d := $$($(1)_DIR)
   _srcs := $$(foreach src, $$($(1)_SOURCES), $$(_d)/$$(src))
@@ -24,7 +25,7 @@ define build-program =
   $$($(1)_PATH): $$($(1)_OBJS) $$(_libs)
 	$(QUIET) $(CXX) -o $$@ $(GLOBAL_LDFLAGS) $$($(1)_OBJS) $$($(1)_LDFLAGS) $$(foreach lib, $$($(1)_LIBS), $$($$(lib)_LDFLAGS_USE))
 
-  $(1)_INSTALL_DIR := $$(bindir)
+  $(1)_INSTALL_DIR ?= $$(bindir)
   $(1)_INSTALL_PATH := $$($(1)_INSTALL_DIR)/$(1)
 
   $$(eval $$(call create-dir,$$($(1)_INSTALL_DIR)))
diff --git a/src/bsdiff-4.3/Makefile.new b/src/bsdiff-4.3/Makefile.new
new file mode 100644
index 00000000..a56f6c12
--- /dev/null
+++ b/src/bsdiff-4.3/Makefile.new
@@ -0,0 +1,13 @@
+PROGRAMS += bsdiff bspatch
+
+bsdiff_DIR := $(d)
+bsdiff_SOURCES = bsdiff.c
+bsdiff_LDFLAGS = -lbz2 $(bsddiff_compat_include)
+bsdiff_INSTALL_DIR = $(libexecdir)
+
+bspatch_DIR := $(d)
+bspatch_SOURCES = bspatch.c
+bspatch_LDFLAGS = -lbz2 $(bsddiff_compat_include)
+bspatch_INSTALL_DIR = $(libexecdir)
+
+dist_files += $(d)/compat-include/*