diff --git a/.gitignore b/.gitignore
index 93b0dca40a..9fc0ac269c 100644
--- a/.gitignore
+++ b/.gitignore
@@ -64,6 +64,7 @@
 /libavcodec/*_tables.h
 /libavutil/avconfig.h
 /libavutil/ffversion.h
+/src
 /tests/audiogen
 /tests/base64
 /tests/checkasm/checkasm
diff --git a/Makefile b/Makefile
index f3bd5f682d..e484249065 100644
--- a/Makefile
+++ b/Makefile
@@ -181,7 +181,7 @@ clean::
 
 distclean::
 	$(RM) $(DISTCLEANSUFFIXES)
-	$(RM) config.* .config libavutil/avconfig.h .version avversion.h version.h libavutil/ffversion.h libavcodec/codec_names.h
+	$(RM) config.* .config libavutil/avconfig.h .version avversion.h version.h libavutil/ffversion.h libavcodec/codec_names.h src
 	$(RM) -rf doc/examples/pc-uninstalled
 
 config:
diff --git a/common.mak b/common.mak
index 3812149ef5..03b51c5968 100644
--- a/common.mak
+++ b/common.mak
@@ -32,7 +32,7 @@ endif
 ALLFFLIBS = avcodec avdevice avfilter avformat avresample avutil postproc swscale swresample
 
 # NASM requires -I path terminated with /
-IFLAGS     := -I$(DST_PATH)/ -I$(SRC_PATH)/
+IFLAGS     := -I. -I$(SRC_LINK)/
 CPPFLAGS   := $(IFLAGS) $(CPPFLAGS)
 CFLAGS     += $(ECFLAGS)
 CCFLAGS     = $(CPPFLAGS) $(CFLAGS)
@@ -43,12 +43,11 @@ CXXFLAGS   += $(CPPFLAGS) $(CFLAGS)
 YASMFLAGS  += $(IFLAGS:%=%/) -Pconfig.asm
 
 HOSTCCFLAGS = $(IFLAGS) $(HOSTCPPFLAGS) $(HOSTCFLAGS)
-LDFLAGS    := $(ALLFFLIBS:%=$(LD_PATH)$(DST_PATH)/lib%) $(LDFLAGS)
+LDFLAGS    := $(ALLFFLIBS:%=$(LD_PATH)lib%) $(LDFLAGS)
 
 define COMPILE
        $(call $(1)DEP,$(1))
-       $(Q)cd $(SRC_PATH); if [ -n "$(findstring $(SRC_PATH),$<)" ]; then dest=$(subst $(SRC_PATH)/,,$<); else dest=$(DST_PATH)/$<; fi; \
-       $(subst @,,$($(1))) $($(1)FLAGS) $($(1)_DEPFLAGS:$(@:.o=.d)=$(DST_PATH)/$(@:.o=.d)) $($(1)_C) $($(1)_O:$@=$(DST_PATH)/$@) $$dest
+       $($(1)) $($(1)FLAGS) $($(1)_DEPFLAGS) $($(1)_C) $($(1)_O) $(patsubst $(SRC_PATH)/%,$(SRC_LINK)/%,$<)
 endef
 
 COMPILE_C = $(call COMPILE,CC)
diff --git a/configure b/configure
index 0685133975..57b526fce9 100755
--- a/configure
+++ b/configure
@@ -4696,6 +4696,26 @@ case $target_os in
         ;;
 esac
 
+# test if creating links works
+link_dest=$(mktemp -u $TMPDIR/dest_XXXXXXXX)
+link_name=$(mktemp -u $TMPDIR/name_XXXXXXXX)
+mkdir "$link_dest"
+$ln_s "$link_dest" "$link_name"
+touch "$link_dest/test_file"
+if [ -e "$link_name/test_file" ]; then
+    # create link to source path
+    [ -e src ] && rm src
+    $ln_s "$source_path" src
+    source_link=src
+else
+    # creating directory links doesn't work
+    # fall back to using the full source path
+    source_link="$source_path"
+fi
+# cleanup
+rm -r "$link_dest"
+rm -r "$link_name"
+
 # determine libc flavour
 
 probe_libc(){
@@ -6229,12 +6249,6 @@ enabled stripping || strip="echo skipping strip"
 
 config_files="$TMPH config.mak doc/config.texi"
 
-if enabled msvc; then
-    dst_path=$(pwd -W)
-else
-    dst_path=$(pwd)
-fi
-
 cat > config.mak <<EOF
 # Automatically generated by configure - do not modify!
 ifndef FFMPEG_CONFIG_MAK
@@ -6250,10 +6264,10 @@ DOCDIR=\$(DESTDIR)$docdir
 MANDIR=\$(DESTDIR)$mandir
 PKGCONFIGDIR=\$(DESTDIR)$pkgconfigdir
 SRC_PATH=$source_path
+SRC_LINK=$source_link
 ifndef MAIN_MAKEFILE
 SRC_PATH:=\$(SRC_PATH:.%=..%)
 endif
-DST_PATH=$dst_path
 CC_IDENT=$cc_ident
 ARCH=$arch
 INTRINSICS=$intrinsics
diff --git a/library.mak b/library.mak
index 0b23a28f5b..3e1082c572 100644
--- a/library.mak
+++ b/library.mak
@@ -28,7 +28,7 @@ $(SUBDIR)x86/%$(DEFAULT_YASMD).asm: $(SUBDIR)x86/%.asm
 
 $(SUBDIR)x86/%.o: $(SUBDIR)x86/%$(YASMD).asm
 	$(DEPYASM) $(YASMFLAGS) -I $(<D)/ -M -o $@ $< > $(@:.o=.d)
-	$(Q)cd $(SRC_PATH); $(subst @,,$(YASM)) $(YASMFLAGS) -I $(<D)/ -o $(DST_PATH)/$@ $(subst $(SRC_PATH)/,,$<)
+	$(YASM) $(YASMFLAGS) -I $(<D)/ -o $@ $(patsubst $(SRC_PATH)/%,$(SRC_LINK)/%,$<)
 	-$(if $(ASMSTRIPFLAGS), $(STRIP) $(ASMSTRIPFLAGS) $@)
 
 LIBOBJS := $(OBJS) $(SUBDIR)%.h.o $(TESTOBJS)