diff --git a/package/dnsmasq/Makefile b/package/dnsmasq/Makefile
index d3ce64736..6efaf370a 100644
--- a/package/dnsmasq/Makefile
+++ b/package/dnsmasq/Makefile
@@ -24,12 +24,24 @@ coupled DNS and DHCP service to a LAN.
 URL:=http://www.thekelleys.org.uk/dnsmasq/
 endef
 
+define Package/dnsmasq/conffiles
+/etc/dnsmasq.conf
+endef
+
+define Build/Compile
+	$(MAKE) -C $(PKG_BUILD_DIR) \
+		CC="$(TARGET_CC)" CFLAGS="$(TARGET_CFLAGS)" \
+		BINDIR="/usr/sbin" MANDIR="/usr/man" \
+		all
+endef
+
 define Package/dnsmasq/install
-	install -m0755 -d $(1)/usr/sbin
-	install -m0755 -d $(1)/etc/init.d/
-	install -m0755 $(PKG_BUILD_DIR)/src/dnsmasq $(1)/usr/sbin/
+	install -m0755 -d $(1)/etc
 	install -m0644 ./files/dnsmasq.conf $(1)/etc/dnsmasq.conf
+	install -m0755 -d $(1)/etc/init.d
 	install -m0755 ./files/dnsmasq.init $(1)/etc/init.d/S50dnsmasq
+	install -m0755 -d $(1)/usr/sbin
+	install -m0755 $(PKG_BUILD_DIR)/src/dnsmasq $(1)/usr/sbin/
 endef
 
 $(eval $(call BuildPackage,dnsmasq))