diff --git a/build-appdirs.sh b/build-appdirs.sh
index fac16faf1..a1201e6c8 100644
--- a/build-appdirs.sh
+++ b/build-appdirs.sh
@@ -12,12 +12,12 @@ mkdir -p appdirs/
 APPIMAGETOOL_APPDIR=appdirs/appimagetool.AppDir
 
 rm -rf "$APPIMAGETOOL_APPDIR" || true
-mkdir -p "$APPIMAGETOOL_APPDIR"/usr/bin
+mkdir -p "$APPIMAGETOOL_APPDIR"/usr/{bin,lib/appimagekit}
 cp -f install_prefix/usr/bin/appimagetool "$APPIMAGETOOL_APPDIR"/usr/bin
 
 cp ../resources/AppRun "$APPIMAGETOOL_APPDIR"
 cp install_prefix/usr/bin/appimagetool "$APPIMAGETOOL_APPDIR"/usr/bin/
-cp install_prefix/usr/bin/mksquashfs "$APPIMAGETOOL_APPDIR"/usr/bin/
+cp install_prefix/usr/lib/appimagekit/mksquashfs "$APPIMAGETOOL_APPDIR"/usr/lib/appimagekit/
 cp $(which desktop-file-validate) "$APPIMAGETOOL_APPDIR"/usr/bin/
 cp $(which zsyncmake) "$APPIMAGETOOL_APPDIR"/usr/bin/
 
diff --git a/build.sh b/build.sh
index 1efb8f701..4c74d22b7 100755
--- a/build.sh
+++ b/build.sh
@@ -93,4 +93,4 @@ bash -ex "$HERE/build-appdirs.sh"
 ls -lh
 
 mkdir -p out
-cp -r install_prefix/usr/bin/* appdirs/*.AppDir out/
+cp -r install_prefix/usr/{bin,lib/appimagekit}/* appdirs/*.AppDir out/
diff --git a/src/CMakeLists.txt b/src/CMakeLists.txt
index 706b205f0..3262838cf 100644
--- a/src/CMakeLists.txt
+++ b/src/CMakeLists.txt
@@ -23,6 +23,10 @@ add_custom_command(OUTPUT data.o
 add_custom_target(runtime DEPENDS ${CMAKE_CURRENT_BINARY_DIR}/runtime)
 
 
+# allow setting different path for mksquashfs after installation
+set(AUXILIARY_FILES_DESTINATION "lib/appimagekit" CACHE STRING "Target install directory for mksquashfs")
+
+
 add_library(libappimage SHARED
     ${PROJECT_SOURCE_DIR}/include/appimage/appimage.h
     shared.c
@@ -147,6 +151,13 @@ target_compile_definitions(appimagetool
     PRIVATE -DENABLE_BINRELOC
 )
 
+if(AUXILIARY_FILES_DESTINATION)
+    message(STATUS "Installing auxiliary files in path: ${AUXILIARY_FILES_DESTINATION}")
+    target_compile_definitions(appimagetool
+        PRIVATE -DAUXILIARY_FILES_DESTINATION="${AUXILIARY_FILES_DESTINATION}"
+    )
+endif()
+
 add_dependencies(appimagetool mksquashfs squashfuse)
 
 add_sanitizers(appimagetool)
@@ -210,11 +221,19 @@ add_sanitizers(digest)
 
 
 # install binaries
-install(
-    PROGRAMS ${mksquashfs_INSTALL_DIR}/mksquashfs ${CMAKE_CURRENT_BINARY_DIR}/runtime
-    DESTINATION bin
-    COMPONENT applications
-)
+if(AUXILIARY_FILES_DESTINATION)
+    install(
+        PROGRAMS ${mksquashfs_INSTALL_DIR}/mksquashfs ${CMAKE_CURRENT_BINARY_DIR}/runtime
+        DESTINATION ${AUXILIARY_FILES_DESTINATION}
+        COMPONENT applications
+    )
+else()
+    install(
+        PROGRAMS ${mksquashfs_INSTALL_DIR}/mksquashfs ${CMAKE_CURRENT_BINARY_DIR}/runtime
+        DESTINATION bin
+        COMPONENT applications
+    )
+endif()
 
 install(
     TARGETS AppRun appimaged appimagetool digest validate
diff --git a/src/appimagetool.c b/src/appimagetool.c
index c55e775e0..c239b56ba 100644
--- a/src/appimagetool.c
+++ b/src/appimagetool.c
@@ -87,6 +87,7 @@ gchar *sqfs_comp = "gzip";
 gchar *exclude_file = NULL;
 gchar *runtime_file = NULL;
 gchar *sign_args = NULL;
+gchar *pathToMksquashfs = NULL;
 
 // #####################################################################
 
@@ -142,7 +143,11 @@ int sfs_mksquashfs(char *source, char *destination, int offset) {
         bool use_xz = strcmp(sqfs_comp, "xz") >= 0;
 
         int i = 0;
+#ifndef AUXILIARY_FILES_DESTINATION
         args[i++] = "mksquashfs";
+#else
+        args[i++] = pathToMksquashfs;
+#endif
         args[i++] = source;
         args[i++] = destination;
         args[i++] = "-offset";
@@ -191,7 +196,11 @@ int sfs_mksquashfs(char *source, char *destination, int offset) {
 
         args[i++] = 0;
 
+#ifndef AUXILIARY_FILES_DESTINATION
         execvp("mksquashfs", args);
+#else
+        execvp(pathToMksquashfs, args);
+#endif
 
         perror("execlp");   // exec*() returns only on error
         return -1; // exec never returns
@@ -493,8 +502,27 @@ main (int argc, char *argv[])
     /* Check for dependencies here. Better fail early if they are not present. */
     if(! g_find_program_in_path ("file"))
         die("file command is missing but required, please install it");
+#ifndef AUXILIARY_FILES_DESTINATION
     if(! g_find_program_in_path ("mksquashfs"))
         die("mksquashfs command is missing but required, please install it");
+#else
+    {
+        // build path relative to appimagetool binary
+        char *appimagetoolDirectory = dirname(realpath("/proc/self/exe", NULL));
+        if (!appimagetoolDirectory) {
+            g_print("Could not access /proc/self/exe\n");
+            exit(1);
+        }
+
+        pathToMksquashfs = g_build_filename(appimagetoolDirectory, "..", AUXILIARY_FILES_DESTINATION, "mksquashfs", NULL);
+
+        if (!g_file_test(pathToMksquashfs, G_FILE_TEST_EXISTS | G_FILE_TEST_IS_EXECUTABLE)) {
+            g_printf("No such file or directory: %s\n", pathToMksquashfs);
+            g_free(pathToMksquashfs);
+            exit(1);
+        }
+    }
+#endif
     if(! g_find_program_in_path ("desktop-file-validate"))
         die("desktop-file-validate command is missing, please install it");
     if(! g_find_program_in_path ("zsyncmake"))
diff --git a/travis/travis-build.sh b/travis/travis-build.sh
index 65177c7fb..6fb1f8240 100644
--- a/travis/travis-build.sh
+++ b/travis/travis-build.sh
@@ -71,7 +71,8 @@ sudo chown -R travis.travis .
 (cd out ; equivs-build ../../appimaged.ctl)
 
 # remove binaries from output directory
-rm -r out/{appimaged,appimagetool,validate,digest,mksquashfs}
+ls -al out/
+rm -r out/{appimaged,appimagetool,validate,digest,mksquashfs,*.AppDir}
 
 # inspect runtime
 xxd out/runtime | head -n 1