diff --git a/ApplicationCode/CMakeLists.txt b/ApplicationCode/CMakeLists.txt
index 08b69aa413..9fb9233659 100644
--- a/ApplicationCode/CMakeLists.txt
+++ b/ApplicationCode/CMakeLists.txt
@@ -262,7 +262,8 @@ endif(MSVC)
 #############################################################################
 
 if (${CMAKE_SYSTEM_NAME} MATCHES "Linux")
-    set_target_properties(ResInsight PROPERTIES INSTALL_RPATH "${RESINSIGHT_FINAL_INSTALL_PATH};.")
+  # tell binary to first attempt to load libraries from its own directory
+  set_target_properties (ResInsight PROPERTIES INSTALL_RPATH "\$ORIGIN")
 
     # Find Qt libraries and sym links
     file (GLOB RESINSIGHT_FILES
@@ -275,6 +276,9 @@ if (${CMAKE_SYSTEM_NAME} MATCHES "Linux")
 endif()
 
 if (${CMAKE_SYSTEM_NAME} MATCHES "Windows")
+  # put a .exe.local file in the target directory to pick up DLLs from there
+  install (CODE "exec_program (${CMAKE_COMMAND} ARGS -E touch \$ENV{DESTDIR}${CMAKE_INSTALL_PREFIX}${RESINSIGHT_FINAL_NAME}/ResInsight${CMAKE_EXECUTABLE_SUFFIX}.local)")
+
     set (RESINSIGHT_FILES
             ${QT_BINARY_DIR}/QtCore4.dll
             ${QT_BINARY_DIR}/QtGui4.dll
diff --git a/CMakeLists.txt b/CMakeLists.txt
index 1770942634..4a8ca92a40 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -114,10 +114,8 @@ if (NOT "${RESINSIGHT_PLATFORM}" STREQUAL "")
     set (RESINSIGHT_FINAL_NAME "${RESINSIGHT_FINAL_NAME}-${RESINSIGHT_PLATFORM}")
 endif()
 
-set (RESINSIGHT_FINAL_INSTALL_PATH "/usr/${RESINSIGHT_FINAL_NAME}")
-
 set (CMAKE_INSTALL_PREFIX ${CMAKE_BINARY_DIR}/Install/)
-#set (CMAKE_INSTALL_PREFIX ${RESINSIGHT_FINAL_INSTALL_PATH})
+#set (CMAKE_INSTALL_PREFIX /usr/${RESINSIGHT_FINAL_NAME})
 
 ################################################################################
 # Application 
diff --git a/OctavePlugin/CMakeLists.txt b/OctavePlugin/CMakeLists.txt
index 507f3bfa75..45fbe8b316 100644
--- a/OctavePlugin/CMakeLists.txt
+++ b/OctavePlugin/CMakeLists.txt
@@ -8,7 +8,8 @@ set(CPP_SOURCES
 )
 
 if (${CMAKE_SYSTEM_NAME} MATCHES "Linux")
-    set(RPATH_COMMAND "-Wl,-rpath=${RESINSIGHT_FINAL_INSTALL_PATH} -Wl,-rpath=.")
+  # since the compiler passes the option to the linker, double quoting is necessary
+  set (RPATH_COMMAND "-Wl,-rpath,'\\$$ORIGIN'")
 endif()
 
 if (${CMAKE_SYSTEM_NAME} MATCHES "Windows")