diff --git a/configure.ac b/configure.ac
index d699f2c7..5f626dbd 100644
--- a/configure.ac
+++ b/configure.ac
@@ -322,6 +322,10 @@ fi
 AM_CONDITIONAL([ENABLE_PYTHON_BINDINGS],
                [test "x${enable_python_bindings}" = "xyes"])
 
+# Produce cython conditional, so that we can distribute generated C
+# source
+AM_CONDITIONAL([HAVE_CYTHON], [test "x${CYTHON}" != "x"])
+
 # failmalloc tests
 AM_CONDITIONAL([ENABLE_FAILMALLOC], [ test "x${enable_failmalloc}" = "xyes" ])
 
@@ -406,6 +410,7 @@ AC_CONFIG_FILES([
   src/Makefile
   examples/Makefile
   python/Makefile
+  python/setup.py
   doc/Makefile
   doc/conf.py
   doc/index.rst
diff --git a/python/Makefile.am b/python/Makefile.am
index 56a1328f..6c32e3c6 100644
--- a/python/Makefile.am
+++ b/python/Makefile.am
@@ -21,27 +21,30 @@
 # OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION
 # WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
 
-EXTRA_DIST = cnghttp2.pxd setup.py
+EXTRA_DIST = cnghttp2.pxd nghttp2.pyx setup.py
+
+# Generate nghttp2.c only if we have cython installed
+if HAVE_CYTHON
+
+EXTRA_DIST += nghttp2.c
+
+endif # HAVE_CYTHON
 
 if ENABLE_PYTHON_BINDINGS
 
-distclean-local:
-	-rm -f nghttp2.c
+all-local: nghttp2.c
+	$(PYTHON) setup.py  build
+
+install-exec-local:
+	$(PYTHON) setup.py install --prefix=$(DESTDIR)$(prefix)
+
+uninstall-local:
+	rm -rf $(DESTDIR)$(libdir)/python*/site-packages/*nghttp2*
+
+clean-local:
+	$(PYTHON) setup.py clean --all
 
 .pyx.c:
 	$(CYTHON) -o $@ $<
 
-pyexec_LTLIBRARIES = nghttp2.la
-nghttp2_la_SOURCES = nghttp2.pyx
-nghttp2_la_CPPFLAGS = \
-	$(PYTHON_CPPFLAGS) \
-	-fno-strict-aliasing \
-	-I$(top_srcdir)/lib/includes \
-	-I$(top_builddir)/lib/includes \
-	-I$(top_srcdir)/lib
-nghttp2_la_LDFLAGS = \
-	$(PYTHON_LDFLAGS) \
-	-avoid-version -module
-nghttp2_la_LIBADD = $(top_builddir)/lib/libnghttp2.la
-
 endif # ENABLE_PYTHON_BINDINGS
diff --git a/python/setup.py b/python/setup.py.in
similarity index 85%
rename from python/setup.py
rename to python/setup.py.in
index 8370282e..75b43cd3 100644
--- a/python/setup.py
+++ b/python/setup.py.in
@@ -32,6 +32,10 @@ setup(
     keywords = [],
     ext_modules = [Extension("nghttp2",
                              ["nghttp2.c"],
+                             include_dirs=['@top_srcdir@/lib',
+                                           '@top_srcdir@/lib/includes',
+                                           '@top_builddir@/lib/includes'],
+                             library_dirs=['@top_builddir@/lib/.libs'],
                              libraries=['nghttp2'])],
     long_description='TBD'
     )