diff --git a/Makefile.am b/Makefile.am
index f95c4506..0cf30e63 100644
--- a/Makefile.am
+++ b/Makefile.am
@@ -1,7 +1,3 @@
-if ENABLE_XWAYLAND
-xwayland_subdir = xwayland
-endif
-
 bin_PROGRAMS =
 moduledir = $(libdir)/weston
 module_LTLIBRARIES =
@@ -10,7 +6,6 @@ BUILT_SOURCES =
 SUBDIRS =					\
 	shared					\
 	src					\
-	$(xwayland_subdir)			\
 	clients					\
 	protocol				\
 	tests					\
@@ -93,5 +88,45 @@ BUILT_SOURCES +=					\
 	desktop-shell/xdg-shell-server-protocol.h
 endif
 
+
+if ENABLE_XWAYLAND
+
+module_LTLIBRARIES += xwayland.la
+
+xwayland_la_CPPFLAGS =				\
+	-I$(top_srcdir)/shared			\
+	-I$(top_srcdir)/src			\
+	-I$(top_builddir)/src			\
+	-I$(top_builddir)/xwayland		\
+	-DDATADIR='"$(datadir)"'		\
+	-DMODULEDIR='"$(moduledir)"'		\
+	-DLIBEXECDIR='"$(libexecdir)"'		\
+	-DXSERVER_PATH='"@XSERVER_PATH@"'
+
+xwayland_la_LDFLAGS = -module -avoid-version
+xwayland_la_LIBADD =			\
+	$(XWAYLAND_LIBS)		\
+	$(top_builddir)/shared/libshared-cairo.la
+xwayland_la_CFLAGS =				\
+	$(GCC_CFLAGS)				\
+	$(COMPOSITOR_CFLAGS)			\
+	$(PIXMAN_CFLAGS)			\
+	$(CAIRO_CFLAGS)
+xwayland_la_SOURCES =				\
+	xwayland/xwayland.h			\
+	xwayland/window-manager.c		\
+	xwayland/selection.c			\
+	xwayland/dnd.c				\
+	xwayland/launcher.c			\
+	xwayland/xserver-protocol.c		\
+	xwayland/xserver-server-protocol.h	\
+	xwayland/hash.c				\
+	xwayland/hash.h
+
+BUILT_SOURCES +=				\
+	xwayland/xserver-protocol.c		\
+	xwayland/xserver-server-protocol.h
+endif
+
 wayland_protocoldir = $(top_srcdir)/protocol
 include $(top_srcdir)/wayland-scanner.mk
diff --git a/configure.ac b/configure.ac
index f8b1a4f7..57b8519e 100644
--- a/configure.ac
+++ b/configure.ac
@@ -487,7 +487,6 @@ AM_CONDITIONAL([HAVE_XMLLINT], [test "x$XMLLINT" != "x" -a "x$dtddir" != "x"])
 AC_CONFIG_FILES([Makefile
 		 shared/Makefile
 		 src/Makefile
-		 xwayland/Makefile
 		 src/version.h
 		 src/weston.pc
 		 clients/Makefile
diff --git a/xwayland/Makefile.am b/xwayland/Makefile.am
deleted file mode 100644
index 434234aa..00000000
--- a/xwayland/Makefile.am
+++ /dev/null
@@ -1,42 +0,0 @@
-AM_CPPFLAGS =					\
-	-I$(top_srcdir)/shared			\
-	-I$(top_srcdir)/src			\
-	-I$(top_builddir)/src			\
-	-I$(top_builddir)/xwayland		\
-	-DDATADIR='"$(datadir)"'		\
-	-DMODULEDIR='"$(moduledir)"'		\
-	-DLIBEXECDIR='"$(libexecdir)"'		\
-	-DXSERVER_PATH='"@XSERVER_PATH@"'
-
-moduledir = @libdir@/weston
-module_LTLIBRARIES = xwayland.la
-
-xwayland = xwayland.la
-xwayland_la_LDFLAGS = -module -avoid-version
-xwayland_la_LIBADD =			\
-	$(XWAYLAND_LIBS)		\
-	$(top_builddir)/shared/libshared-cairo.la
-xwayland_la_CFLAGS =				\
-	$(GCC_CFLAGS)				\
-	$(COMPOSITOR_CFLAGS)			\
-	$(PIXMAN_CFLAGS)			\
-	$(CAIRO_CFLAGS)
-xwayland_la_SOURCES =				\
-	xwayland.h				\
-	window-manager.c			\
-	selection.c				\
-	dnd.c					\
-	launcher.c				\
-	xserver-protocol.c			\
-	xserver-server-protocol.h		\
-	hash.c					\
-	hash.h
-
-BUILT_SOURCES =					\
-	xserver-protocol.c			\
-	xserver-server-protocol.h
-
-CLEANFILES = $(BUILT_SOURCES)
-
-wayland_protocoldir = $(top_srcdir)/protocol
-include $(top_srcdir)/wayland-scanner.mk