diff --git a/Makefile.in b/Makefile.in
index 88f4efea472..d4a063e56e4 100644
--- a/Makefile.in
+++ b/Makefile.in
@@ -196,7 +196,8 @@ libpython$(VERSION).dylib: $(LIBRARY)
 $(SUBDIRS):	Makefiles
 
 Grammar:
-		cd Grammar ; $(MAKE) OPT="$(OPT)" VERSION="$(VERSION)" \
+		P=`pwd`/Parser; cd $(srcdir)/Grammar; $(MAKE) PGENDIR=$$P \
+			OPT="$(OPT)" VERSION="$(VERSION)" \
 			prefix="$(prefix)" exec_prefix="$(exec_prefix)" all
 
 Parser: