diff --git a/CHANGELOG.md b/CHANGELOG.md
index 83beca535..8cb2b943d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -112,7 +112,7 @@ changes.
 - Protocol: don't send invalid onion errors if peer says onion was bad.
 - Protocol: don't crash when peer sends a 0-block-expiry HTLC.
 - pylightning: handle multiple simultanous RPC replies reliably.
-
+- build: we use `--prefix` as handed to `./configure`
 
 ### Security
 
diff --git a/Makefile b/Makefile
index e7be04557..9bd1c650a 100644
--- a/Makefile
+++ b/Makefile
@@ -436,13 +436,12 @@ unittest/%: %
 	$(VG) $(VG_TEST_ARGS) $* > /dev/null
 
 # Installation directories
-prefix = /usr/local
-exec_prefix = $(prefix)
+exec_prefix = $(PREFIX)
 bindir = $(exec_prefix)/bin
 libexecdir = $(exec_prefix)/libexec
 pkglibexecdir = $(libexecdir)/$(PKGNAME)
 plugindir = $(pkglibexecdir)/plugins
-datadir = $(prefix)/share
+datadir = $(PREFIX)/share
 docdir = $(datadir)/doc/$(PKGNAME)
 mandir = $(datadir)/man
 man1dir = $(mandir)/man1