diff --git a/bin/calyptos b/bin/calyptos
index c7d33a9..510e8b0 100755
--- a/bin/calyptos
+++ b/bin/calyptos
@@ -7,24 +7,46 @@ import os
 import shutil
 
 dot_dir = os.path.expanduser('~/.calyptos')
-default_cfgfile = os.path.join(dot_dir + "/" + "config.yml")
+# by default we look in users home dir first
+default_cfgfile = os.path.join(dot_dir, "config.yml")
+cfglist = []
+cfglist.append(default_cfgfile)
+cfglist.append('/usr/share/calyptos/config.yml')
 
 def locate_cfgfile():
-    if not os.path.isfile(default_cfgfile):
-        if not os.path.exists(dot_dir):
-            try:
-                os.makedirs(dot_dir)
-            except OSError as e:
-                print('Error: cannot create directory ~/.calyptos: %s' % e)
-        try:
-            shutil.copy('/usr/share/calyptos/etc/config.yml', default_cfgfile)
-        except shutil.Error as e:
-            print('Error: %s' % e)
-        except IOError as e:
-            print('Error: %s' % e.strerror)
+    # if we find that the config file is in /usr/share
+    # but the rpm is not installed, we copy it to ~/.calyptos
+    # because that means calyptos was installed by setup.py
+    for item in cfglist:
+        if os.path.isfile(item):
+            if item != default_cfgfile:
+                import rpm # I think this is required by other parts of python so I'm safe using it
+                ts = rpm.TransactionSet()
+                mi = ts.dbMatch("name","calyptos")
+                if (len(mi) == 0):
+                    if not os.path.isfile(default_cfgfile):
+                        if not os.path.exists(dot_dir):
+                            try:
+                                os.makedirs(dot_dir)
+                            except OSError as e:
+                                print('Error: cannot create directory ~/.calyptos: %s' % e)
+                        try:
+                            # if this copy works, return default_cfgfile
+                            # because it will be used going forward
+                            shutil.copy('/usr/share/calyptos/config.yml', default_cfgfile)
+                            return default_cfgfile
+                        except shutil.Error as e:
+                            print('Error: %s' % e)
+                        except IOError as e:
+                            print('Error: %s' % e.strerror)
+            # this is not in an else: block because its a
+            # last resort for the case where import rpm
+            # doesn't succeed above, because we still need
+            # to return a valid config file name
+            return item
 
 if __name__ == '__main__':
-    locate_cfgfile()
+    cfgfile = locate_cfgfile()
     parser = argparse.ArgumentParser()
     default_repo = 'https://github.com/eucalyptus/eucalyptus-cookbook'
     parser.add_argument('operation', choices=['validate',
@@ -33,7 +55,7 @@ if __name__ == '__main__':
                                               'provision',
                                               'debug',
                                               'uninstall'])
-    parser.add_argument('-c', '--config', default=default_cfgfile)
+    parser.add_argument('-c', '--config', default=cfgfile)
     parser.add_argument('-e', '--environment', default='etc/environment.yml')
     parser.add_argument('-p', '--password', default='foobar')
     parser.add_argument('-b', '--branch', default='euca-4.2')
diff --git a/calyptos.spec b/calyptos.spec
index 12853e7..7593b03 100644
--- a/calyptos.spec
+++ b/calyptos.spec
@@ -89,5 +89,5 @@ rm -rf $RPM_BUILD_ROOT
 /usr/bin/calyptos
 %{python_sitelib}/calyptos/*
 %{python_sitelib}/*.egg-info
-/usr/share/calyptos/etc/*
+/usr/share/calyptos/config.yml
 /usr/share/calyptos/examples/*
diff --git a/setup.py b/setup.py
index 762249c..29a4335 100644
--- a/setup.py
+++ b/setup.py
@@ -140,6 +140,6 @@ def make_release_tree(self, base_dir, files):
         'build_py': build_py_with_git_version,
         'sdist': sdist_with_git_version
     },
-    data_files=[('/usr/share/calyptos/etc', ['etc/config.yml']),
+    data_files=[('/usr/share/calyptos', ['etc/config.yml']),
                 ('/usr/share/calyptos/examples/', example_items)],
 )