diff --git a/srcpkgs/kernel/kernel-headers.template b/srcpkgs/kernel/kernel-headers.template
index 46d0f12faef..ed3e205f95a 100644
--- a/srcpkgs/kernel/kernel-headers.template
+++ b/srcpkgs/kernel/kernel-headers.template
@@ -8,7 +8,7 @@ long_desc="
  external 3rd party binary modules."
 
 do_install() {
-	vmove usr
-	vmove lib/modules/${_kernver}/build lib/modules/${_kernver}
+	vmove usr/src usr
+	vmove usr/lib/modules/${_kernver}/build usr/lib/modules/${_kernver}
 
 }
diff --git a/srcpkgs/kernel/template b/srcpkgs/kernel/template
index b6f5f1f4142..66de5a40f7d 100644
--- a/srcpkgs/kernel/template
+++ b/srcpkgs/kernel/template
@@ -3,7 +3,7 @@
 pkgname=kernel
 _kmajorver=3.4
 version=${_kmajorver}.4
-revision=5
+revision=6
 nostrip=yes
 noverifyrdeps=yes
 preserve=yes
@@ -25,13 +25,13 @@ _kernver="${version}_${revision}"
 
 # These files could be modified when an external module is built.
 mutable_files="
-/lib/modules/${_kernver}/modules.dep
-/lib/modules/${_kernver}/modules.dep.bin
-/lib/modules/${_kernver}/modules.symbols
-/lib/modules/${_kernver}/modules.symbols.bin
-/lib/modules/${_kernver}/modules.alias
-/lib/modules/${_kernver}/modules.alias.bin
-/lib/modules/${_kernver}/modules.devname"
+/usr/lib/modules/${_kernver}/modules.dep
+/usr/lib/modules/${_kernver}/modules.dep.bin
+/usr/lib/modules/${_kernver}/modules.symbols
+/usr/lib/modules/${_kernver}/modules.symbols.bin
+/usr/lib/modules/${_kernver}/modules.alias
+/usr/lib/modules/${_kernver}/modules.alias.bin
+/usr/lib/modules/${_kernver}/modules.devname"
 
 do_configure() {
 	# If there's a file called <arch>-dotconfig, use it to
@@ -71,6 +71,9 @@ do_install() {
 		arch=x86_64
 	fi
 
+	# Run depmod after compressing modules.
+	sed -i '2iexit 0' scripts/depmod.sh
+
 	# Install kernel, firmware and modules
 	make INSTALL_MOD_PATH=${DESTDIR} modules_install
 
@@ -81,9 +84,14 @@ do_install() {
 		${DESTDIR}/boot/vmlinuz-${_kernver}
 	install -Dm644 System.map \
 		${DESTDIR}/boot/System.map-${_kernver}
-	cd ${DESTDIR}/lib/modules/${_kernver} && \
+
+	# Switch to /usr.
+	vmkdir usr
+	vmove lib usr
+
+	cd ${DESTDIR}/usr/lib/modules/${_kernver} && \
 		rm -f source build && \
-		ln -sf ../../../usr/src/kernel-headers-${_kernver} build
+		ln -sf ../../../src/kernel-headers-${_kernver} build
 
 	cd ${wrksrc}
 	# Install required headers to build external modules
@@ -205,6 +213,7 @@ do_install() {
 	# Compress all modules with xz to save a few MBs.
 	msg_normal "$pkgver: compressing kernel modules with xz, please wait...\n"
 	find ${DESTDIR} -name '*.ko' -exec xz -9 {} \;
+
 	# ... and run depmod again.
 	depmod -b ${DESTDIR} ${_kernver}
 }