Hi, When I run that on a fresh checkout of my project (no build/ dir): python setup.py install -O1 --skip-build --root tmp/ I get a nice tmp/usr/lib/python2.4/site-packages/mypackage.egg/ directory (zip_safe set to False in setup()). Then when I run : python setup.py build It creates a build/ directory as expected. Now if I run the first command again, the packages internal to the egg are installed directly in tmp/usr/lib/python2.4/site-packages/ ... Is this a bug or a feature? I reproduce it with 0.6c2 (on Fedora Core 6) and 0.6c3 (on Ubuntu Edgy) versions of setuptools. Philippe