diff --git a/src/cmd/flux.c b/src/cmd/flux.c
index 1af6c6ac6417..3e19b90ed628 100644
--- a/src/cmd/flux.c
+++ b/src/cmd/flux.c
@@ -87,7 +87,7 @@ static void usage (void)
 );
 }
 
-int setup_lua_env (const char *exedir)
+int setup_lua_env (const char *topdir)
 {
     char *s;
 
@@ -96,9 +96,9 @@ int setup_lua_env (const char *exedir)
      *  paths configurable on installation.
      */
     s = getenv ("LUA_CPATH");
-    setenvf ("LUA_CPATH", 1, "%s/../bindings/lua/.libs/?.so;%s", exedir, s ? s : ";;");
+    setenvf ("LUA_CPATH", 1, "%s/src/bindings/lua/.libs/?.so;%s", topdir, s ? s : ";;");
     s = getenv ("LUA_PATH");
-    setenvf ("LUA_PATH", 1, "%s/../bindings/lua/?.lua;%s", exedir, s ? s : ";;");
+    setenvf ("LUA_PATH", 1, "%s/src/bindings/lua/?.lua;%s", topdir, s ? s : ";;");
     return (0);
 }
 
@@ -108,10 +108,14 @@ int main (int argc, char *argv[])
     bool hopt = false;
     bool vopt = false;
     char *flux_exe_dir = dir_self ();
+    char *flux_top_builddir = getenv ("FLUX_TOP_BUILDDIR");
 
     log_init ("flux");
 
-    setup_lua_env (flux_exe_dir);
+    if (!flux_top_builddir && strcmp (flux_exe_dir, X_BINDIR) != 0)
+        flux_top_builddir = "../..";
+
+    setup_lua_env (flux_top_builddir);
 
     while ((ch = getopt_long (argc, argv, OPTIONS, longopts, NULL)) != -1) {
         switch (ch) {
@@ -149,10 +153,6 @@ int main (int argc, char *argv[])
     argc -= optind;
     argv += optind;
 
-    /* We are executing 'flux' from a path that is not the installed path.
-     * Presume we are in $top_builddir/src/cmd and set up environment
-     * accordingly.
-     */
     if (strcmp (flux_exe_dir, X_BINDIR) != 0) {
         glob_t gl;
         char *modpath;