diff --git a/pkgs/build-support/substitute/generic-substituter.sh b/pkgs/build-support/substitute/generic-substituter.sh
deleted file mode 100644
index 51db11bfa79e..000000000000
--- a/pkgs/build-support/substitute/generic-substituter.sh
+++ /dev/null
@@ -1,22 +0,0 @@
-source $stdenv/setup
-source $substitute
-
-args=
-
-target=$out
-if test -n "$dir"; then
-    target=$out/$dir/$name
-    ensureDir $out/$dir
-fi
-
-# Select all environment variables that start with a lowercase character.
-for envVar in $(env | sed "s/^[^a-z].*//" | sed "s/^\([^=]*\)=.*/\1/"); do
-    echo "$envVar -> ${!envVar}"
-    args="$args --subst-var $envVar"
-done
-
-substitute $src $target $args
-
-if test -n "$isExecutable"; then
-    chmod +x $target
-fi
diff --git a/pkgs/build-support/substitute/generic-substituter.nix b/pkgs/build-support/substitute/substitute-all.nix
similarity index 68%
rename from pkgs/build-support/substitute/generic-substituter.nix
rename to pkgs/build-support/substitute/substitute-all.nix
index acc349ac816e..6c0f970a392a 100644
--- a/pkgs/build-support/substitute/generic-substituter.nix
+++ b/pkgs/build-support/substitute/substitute-all.nix
@@ -4,7 +4,6 @@ args:
 
 stdenv.mkDerivation ({
   name = if args ? name then args.name else baseNameOf (toString args.src);
-  builder = ./generic-substituter.sh;
-  substitute = ./substitute.sh;
+  builder = ./substitute-all.sh;
   inherit (args) src;
 } // args)
diff --git a/pkgs/build-support/substitute/substitute-all.sh b/pkgs/build-support/substitute/substitute-all.sh
new file mode 100644
index 000000000000..3d3999ad520d
--- /dev/null
+++ b/pkgs/build-support/substitute/substitute-all.sh
@@ -0,0 +1,15 @@
+source $stdenv/setup
+
+args=
+
+target=$out
+if test -n "$dir"; then
+    target=$out/$dir/$name
+    ensureDir $out/$dir
+fi
+
+substituteAll $src $target
+
+if test -n "$isExecutable"; then
+    chmod +x $target
+fi
diff --git a/pkgs/development/libraries/pysqlite/builder.sh b/pkgs/development/libraries/pysqlite/builder.sh
index 08877ee83a3d..aab781eb55cc 100644
--- a/pkgs/development/libraries/pysqlite/builder.sh
+++ b/pkgs/development/libraries/pysqlite/builder.sh
@@ -1,5 +1,5 @@
 source $stdenv/setup
-source $substituter
+source $substitute
 
 configurePhase() {
 	substituteInPlace "setup.cfg" \
diff --git a/pkgs/development/libraries/pysqlite/default.nix b/pkgs/development/libraries/pysqlite/default.nix
index 7c0eee2a206b..2671e7a08c51 100644
--- a/pkgs/development/libraries/pysqlite/default.nix
+++ b/pkgs/development/libraries/pysqlite/default.nix
@@ -1,12 +1,12 @@
-{stdenv, fetchurl, python, sqlite, substituter}:
+{stdenv, fetchurl, python, sqlite, substitute}:
 
 stdenv.mkDerivation {
-	name = "pysqlite-2.2.2";
-	src = fetchurl {
-		url = "http://initd.org/pub/software/pysqlite/releases/2.2/2.2.2/pysqlite-2.2.2.tar.gz";
-		md5 = "3260547d3f11c85613b2de8ed529a4fc";
-	};
-	builder = ./builder.sh;
+  name = "pysqlite-2.2.2";
+  src = fetchurl {
+    url = "http://initd.org/pub/software/pysqlite/releases/2.2/2.2.2/pysqlite-2.2.2.tar.gz";
+    md5 = "3260547d3f11c85613b2de8ed529a4fc";
+  };
+  builder = ./builder.sh;
 
-	inherit stdenv python sqlite substituter;
+  inherit stdenv python sqlite substitute;
 }
diff --git a/pkgs/stdenv/generic/setup-new2.sh b/pkgs/stdenv/generic/setup-new2.sh
new file mode 100644
index 000000000000..3f8577d2d75f
--- /dev/null
+++ b/pkgs/stdenv/generic/setup-new2.sh
@@ -0,0 +1,734 @@
+set -e
+
+test -z $NIX_GCC && NIX_GCC=@gcc@
+
+
+# Set up the initial path.
+PATH=
+for i in $NIX_GCC @initialPath@; do
+    PATH=$PATH${PATH:+:}$i/bin
+done
+
+if test "$NIX_DEBUG" = "1"; then
+    echo "Initial path: $PATH"
+fi
+
+
+# Execute the pre-hook.
+export SHELL=@shell@
+export shell=@shell@
+param1=@param1@
+param2=@param2@
+param3=@param3@
+param4=@param4@
+param5=@param5@
+if test -n "@preHook@"; then
+    source @preHook@
+fi
+
+
+# Check that the pre-hook initialised SHELL.
+if test -z "$SHELL"; then echo "SHELL not set"; exit 1; fi
+
+
+# Hack: run gcc's setup hook.
+envHooks=()
+if test -f $NIX_GCC/nix-support/setup-hook; then
+    source $NIX_GCC/nix-support/setup-hook
+fi
+
+    
+# Ensure that the given directory exists.
+ensureDir() {
+    local dir=$1
+    if ! test -x "$dir"; then mkdir -p "$dir"; fi
+}
+
+
+# Called when some build action fails.  If $succeedOnFailure is set,
+# create the file `$out/nix-support/failed' to signal failure, and
+# exit normally.  Otherwise, exit with failure.
+fail() {
+    exitCode=$?
+    if test "$succeedOnFailure" = 1; then
+        ensureDir "$out/nix-support"
+        touch "$out/nix-support/failed"
+        exit 0
+    else
+        exit $?
+    fi
+}
+
+
+# Allow the caller to augment buildInputs (it's not always possible to
+# do this before the call to setup.sh, since the PATH is empty at that
+# point; here we have a basic Unix environment).
+eval "$addInputsHook"
+
+
+# Recursively find all build inputs.
+findInputs()
+{
+    local pkg=$1
+
+    case $pkgs in
+        *\ $pkg\ *)
+            return 0
+            ;;
+    esac
+    
+    pkgs="$pkgs $pkg "
+
+    if test -f $pkg/nix-support/setup-hook; then
+        source $pkg/nix-support/setup-hook
+    fi
+    
+    if test -f $pkg/nix-support/propagated-build-inputs; then
+        for i in $(cat $pkg/nix-support/propagated-build-inputs); do
+            findInputs $i
+        done
+    fi
+}
+
+pkgs=""
+if test -n "$buildinputs"; then
+    buildInputs="$buildinputs" # compatibility
+fi
+for i in $buildInputs $propagatedBuildInputs; do
+    findInputs $i
+done
+
+
+# Set the relevant environment variables to point to the build inputs
+# found above.
+addToEnv()
+{
+    local pkg=$1
+
+    if test "$ignoreFailedInputs" != "1" -a -e $1/nix-support/failed; then
+        echo "failed input $1" >&2
+        fail
+    fi
+
+    if test -d $1/bin; then
+        export _PATH=$_PATH${_PATH:+:}$1/bin
+    fi
+
+    for i in "${envHooks[@]}"; do
+        $i $pkg
+    done
+}
+
+for i in $pkgs; do
+    addToEnv $i
+done
+
+
+# Add the output as an rpath.
+if test "$NIX_NO_SELF_RPATH" != "1"; then
+    export NIX_LDFLAGS="-rpath $out/lib $NIX_LDFLAGS"
+fi
+
+
+# Strip debug information by default.
+if test -z "$NIX_STRIP_DEBUG"; then
+    export NIX_STRIP_DEBUG=1
+    export NIX_CFLAGS_STRIP="-g0 -Wl,--strip-debug"
+fi
+
+
+# Do we know where the store is?  This is required for purity checking.
+if test -z "$NIX_STORE"; then
+    echo "Error: you have an old version of Nix that does not set the" \
+        "NIX_STORE variable.  Please upgrade." >&2
+    exit 1
+fi
+
+
+# We also need to know the root of the build directory for purity checking.
+if test -z "$NIX_BUILD_TOP"; then
+    echo "Error: you have an old version of Nix that does not set the" \
+        "NIX_BUILD_TOP variable.  Please upgrade." >&2
+    exit 1
+fi
+
+
+# Set the TZ (timezone) environment variable, otherwise commands like
+# `date' will complain (e.g., `Tue Mar 9 10:01:47 Local time zone must
+# be set--see zic manual page 2004').
+export TZ=UTC
+
+
+# Execute the post-hook.
+if test -n "@postHook@"; then
+    source @postHook@
+fi
+
+PATH=$_PATH${_PATH:+:}$PATH
+if test "$NIX_DEBUG" = "1"; then
+    echo "Final path: $PATH"
+fi
+
+
+######################################################################
+# Textual substitution functions.
+
+
+substitute() {
+    local input="$1"
+    local output="$2"
+
+    local params=("$@")
+
+    local sedArgs=()
+
+    local n p pattern replacement varName
+    
+    for ((n = 2; n < ${#params[*]}; n += 1)); do
+        p=${params[$n]}
+
+        if test "$p" = "--replace"; then
+            pattern=${params[$((n + 1))]}
+            replacement=${params[$((n + 2))]}
+            n=$((n + 2))
+            sedArgs=("${sedArgs[@]}" "-e" "s^$pattern^$replacement^g")
+        fi
+
+        if test "$p" = "--subst-var"; then
+            varName=${params[$((n + 1))]}
+            n=$((n + 1))
+            sedArgs=("${sedArgs[@]}" "-e" "s^@${varName}@^${!varName}^g")
+        fi
+
+        if test "$p" = "--subst-var-by"; then
+            varName=${params[$((n + 1))]}
+            replacement=${params[$((n + 2))]}
+            n=$((n + 2))
+            sedArgs=("${sedArgs[@]}" "-e" "s^@${varName}@^$replacement^g")
+        fi
+
+    done
+
+    sed "${sedArgs[@]}" < "$input" > "$output".tmp
+    if test -x "$output"; then
+        chmod +x "$output".tmp
+    fi
+    mv -f "$output".tmp "$output"
+}
+
+
+substituteInPlace() {
+    local fileName="$1"
+    shift
+    substitute "$fileName" "$fileName" "$@"
+}
+
+
+substituteAll() {
+    local input="$1"
+    local output="$2"
+    
+    # Select all environment variables that start with a lowercase character.
+    for envVar in $(env | sed "s/^[^a-z].*//" | sed "s/^\([^=]*\)=.*/\1/"); do
+        echo "$envVar -> ${!envVar}"
+        args="$args --subst-var $envVar"
+    done
+
+    substitute "$input" "$output" $args
+}  
+
+
+######################################################################
+# What follows is the generic builder.
+
+
+nestingLevel=0
+
+startNest() {
+    nestingLevel=$(($nestingLevel + 1))
+    echo -en "\e[$1p"
+}
+
+stopNest() {
+    nestingLevel=$(($nestingLevel - 1))
+    echo -en "\e[q"
+}
+
+header() {
+    startNest "$2"
+    echo "$1"
+}
+
+# Make sure that even when we exit abnormally, the original nesting
+# level is properly restored.
+closeNest() {
+    while test $nestingLevel -gt 0; do
+        stopNest
+    done
+}
+
+trap "closeNest" EXIT
+
+
+# This function is useful for debugging broken Nix builds.  It dumps
+# all environment variables to a file `env-vars' in the build
+# directory.  If the build fails and the `-K' option is used, you can
+# then go to the build directory and source in `env-vars' to reproduce
+# the environment used for building.
+dumpVars() {
+    if test "$noDumpEnvVars" != "1"; then
+        export > $NIX_BUILD_TOP/env-vars
+    fi
+}
+
+
+# Redirect stdout/stderr to a named pipe connected to a `tee' process
+# that writes the specified file (and also to our original stdout).
+# The original stdout is saved in descriptor 3.
+startLog() {
+    local logFile=${logNr}_$1
+    logNr=$((logNr + 1))
+    if test "$logPhases" = 1; then
+        ensureDir $logDir
+
+        exec 3>&1
+
+        if test "$dontLogThroughTee" != 1; then
+            # This required named pipes (fifos).
+            logFifo=$NIX_BUILD_TOP/log_fifo
+            test -p $logFifo || mkfifo $logFifo
+            startLogWrite "$logDir/$logFile" "$logFifo"
+            exec > $logFifo 2>&1
+        else
+            exec > $logDir/$logFile 2>&1
+        fi
+    fi
+}
+
+# Factored into a separate function so that it can be overriden.
+startLogWrite() {
+    tee "$1" < "$2" &
+    logWriterPid=$!
+}
+
+
+if test -z "$logDir"; then
+    logDir=$out/log
+fi
+
+logNr=0
+
+# Restore the original stdout/stderr.
+stopLog() {
+    if test "$logPhases" = 1; then
+        exec >&3 2>&1
+
+        # Wait until the tee process has died.  Otherwise output from
+        # different phases may be mixed up.
+        if test -n "$logWriterPid"; then
+            wait $logWriterPid
+            logWriterPid=
+            rm $logFifo
+        fi
+    fi
+}
+
+
+# Utility function: return the base name of the given path, with the
+# prefix `HASH-' removed, if present.
+stripHash() {
+    strippedName=$(basename $1);
+    if echo "$strippedName" | grep -q '^[a-z0-9]\{32\}-'; then
+        strippedName=$(echo "$strippedName" | cut -c34-)
+    fi
+}
+
+
+unpackFile() {
+    local file=$1
+    local cmd
+
+    header "unpacking source archive $file" 3
+
+    case $file in
+        *.tar)
+            tar xvf $file || fail
+            ;;
+        *.tar.gz | *.tgz | *.tar.Z)
+            gunzip < $file | tar xvf - || fail
+            ;;
+        *.tar.bz2 | *.tbz2)
+            bunzip2 < $file | tar xvf - || fail
+            ;;
+        *.zip)
+            unzip $file || fail
+            ;;
+        *)
+            if test -d "$file"; then
+                stripHash $file
+                cp -prvd $file $strippedName || fail
+            else
+                if test -n "$findUnpacker"; then
+                    $findUnpacker $1;
+                fi
+                if test -z "$unpackCmd"; then
+                    echo "source archive $file has unknown type"
+                    exit 1
+                fi
+                $unpackCmd || fail
+            fi
+            ;;
+    esac
+
+    stopNest
+}
+
+
+unpackW() {
+    if test -n "$unpackPhase"; then
+        eval "$unpackPhase"
+        return
+    fi
+
+    if test -z "$srcs"; then
+        if test -z "$src"; then
+            echo 'variable $src or $srcs should point to the source'
+            exit 1
+        fi
+        srcs="$src"
+    fi
+
+    # To determine the source directory created by unpacking the
+    # source archives, we record the contents of the current
+    # directory, then look below which directory got added.  Yeah,
+    # it's rather hacky.
+    local dirsBefore=""
+    for i in *; do
+        if test -d "$i"; then
+            dirsBefore="$dirsBefore $i "
+        fi
+    done
+
+    # Unpack all source archives.
+    for i in $srcs; do
+        unpackFile $i
+    done
+
+    # Find the source directory.
+    if test -n "$setSourceRoot"; then
+        eval "$setSourceRoot"
+    else
+        sourceRoot=
+        for i in *; do
+            if test -d "$i"; then
+                case $dirsBefore in
+                    *\ $i\ *)
+                        ;;
+                    *)
+                        if test -n "$sourceRoot"; then
+                            echo "unpacker produced multiple directories"
+                            exit 1
+                        fi
+                        sourceRoot=$i
+                        ;;
+                esac
+            fi
+        done
+    fi
+
+    if test -z "$sourceRoot"; then
+        echo "unpacker appears to have produced no directories"
+        exit 1
+    fi
+
+    echo "source root is $sourceRoot"
+
+    # By default, add write permission to the sources.  This is often
+    # necessary when sources have been copied from other store
+    # locations.
+    if test "dontMakeSourcesWritable" != 1; then
+        chmod -R +w $sourceRoot
+    fi
+
+    eval "$postUnpack"
+}
+
+
+unpackPhase() {
+    header "unpacking sources"
+    startLog "unpack"
+    unpackW
+    stopLog
+    stopNest
+}
+
+
+patchW() {
+    if test -n "$patchPhase"; then
+        eval "$patchPhase"
+        return
+    fi
+
+    for i in $patches; do
+        header "applying patch $i" 3
+        local uncompress=cat
+        case $i in
+            *.gz)
+                uncompress=gunzip
+                ;;
+            *.bz2)
+                uncompress=bunzip2
+                ;;
+        esac
+        $uncompress < $i | patch -p1 || fail
+        stopNest
+    done
+}
+
+
+patchPhase() {
+    if test -z "$patchPhase" -a -z "$patches"; then return; fi
+    header "patching sources"
+    startLog "patch"
+    patchW
+    stopLog
+    stopNest
+}
+
+
+fixLibtool() {
+    sed 's^eval sys_lib_.*search_path=.*^^' < $1 > $1.tmp
+    mv $1.tmp $1
+}
+
+
+configureW() {
+    if test -n "$configurePhase"; then
+        eval "$configurePhase"
+        return
+    fi
+
+    eval "$preConfigure"
+
+    if test -z "$prefix"; then
+        prefix="$out";
+    fi
+
+    if test "$useTempPrefix" = "1"; then
+        prefix="$NIX_BUILD_TOP/tmp_prefix";
+    fi
+
+    if test -z "$configureScript"; then
+        configureScript=./configure
+        if ! test -x $configureScript; then
+            echo "no configure script, doing nothing"
+            return
+        fi
+    fi
+
+    if test -z "$dontFixLibtool"; then
+        for i in $(find . -name "ltmain.sh"); do
+            echo "fixing libtool script $i"
+            fixLibtool $i
+        done
+    fi
+
+    if test -z "$dontAddPrefix"; then
+        configureFlags="--prefix=$prefix $configureFlags"
+    fi
+
+    echo "configure flags: $configureFlags ${configureFlagsArray[@]}"
+    $configureScript $configureFlags"${configureFlagsArray[@]}" || fail
+
+    eval "$postConfigure"
+}
+
+
+configurePhase() {
+    header "configuring"
+    startLog "configure"
+    configureW
+    stopLog
+    stopNest
+}
+
+
+buildW() {
+    if test -n "$buildPhase"; then
+        eval "$buildPhase"
+        return
+    fi
+
+    eval "$preBuild"
+    
+    echo "make flags: $makeFlags ${makeFlagsArray[@]}"
+    make $makeFlags "${makeFlagsArray[@]}" || fail
+
+    eval "$postBuild"
+}
+
+
+buildPhase() {
+    if test "$dontBuild" = 1; then
+        return
+    fi
+    header "building"
+    startLog "build"
+    buildW
+    stopLog
+    stopNest
+}
+
+
+checkW() {
+    if test -n "$checkPhase"; then
+        eval "$checkPhase"
+        return
+    fi
+
+    if test -z "$checkTarget"; then
+        checkTarget="check"
+    fi
+
+    echo "check flags: $checkFlags ${checkFlagsArray[@]}"
+    make $checkFlags "${checkFlagsArray[@]}" $checkTarget || fail
+}
+
+
+checkPhase() {
+    if test "$doCheck" != 1; then
+        return
+    fi
+    header "checking"
+    startLog "check"
+    checkW
+    stopLog
+    stopNest
+}
+
+
+patchELF() {
+    # Patch all ELF executables and shared libraries.
+    header "patching ELF executables and libraries"
+    find "$prefix" \( \
+        \( -type f -a -name "*.so*" \) -o \
+        \( -type f -a -perm +0100 \) \
+        \) -print -exec patchelf --shrink-rpath {} \;
+    stopNest
+}
+
+
+installW() {
+    if test -n "$installPhase"; then
+        eval "$installPhase"
+        return
+    fi
+
+    eval "$preInstall"
+
+    ensureDir "$prefix"
+    
+    if test -z "$dontMakeInstall"; then
+        echo "install flags: $installFlags ${installFlagsArray[@]}"
+        make install $installFlags "${installFlagsArray[@]}" || fail
+    fi
+
+    if test -z "$dontStrip" -a "$NIX_STRIP_DEBUG" = 1; then
+        find "$prefix" -name "*.a" -exec echo stripping {} \; \
+            -exec strip -S {} \; || fail
+    fi
+
+    if test "$havePatchELF" = 1 -a -z "$dontPatchELF"; then
+        patchELF "$prefix"
+    fi
+
+    if test -n "$propagatedBuildInputs"; then
+        ensureDir "$out/nix-support"
+        echo "$propagatedBuildInputs" > "$out/nix-support/propagated-build-inputs"
+    fi
+
+    eval "$postInstall"
+}
+
+
+installPhase() {
+    if test "$dontInstall" = 1; then
+        return
+    fi
+    header "installing"
+    startLog "install"
+    installW
+    stopLog
+    stopNest
+}
+
+
+distW() {
+    if test -n "$distPhase"; then
+        eval "$distPhase"
+        return
+    fi
+
+    eval "$preDist"
+    
+    if test -z "$distTarget"; then
+        distTarget="dist"
+    fi
+
+    echo "dist flags: $distFlags ${distFlagsArray[@]}"
+    make $distFlags "${distFlagsArray[@]}" $distTarget || fail
+
+    if test "$dontCopyDist" != 1; then
+        ensureDir "$out/tarballs"
+
+        if test -z "$tarballs"; then
+            tarballs="*.tar.gz"
+        fi
+
+        # Note: don't quote $tarballs, since we explicitly permit
+        # wildcards in there.
+        cp -pvd $tarballs $out/tarballs
+    fi
+
+    eval "$postDist"
+}
+
+
+distPhase() {
+    if test "$doDist" != 1; then
+        return
+    fi
+    header "creating distribution"
+    startLog "dist"
+    distW
+    stopLog
+    stopNest
+}
+
+
+genericBuild() {
+    header "building $out"
+
+    if test -n "$buildCommand"; then
+        eval "$buildCommand"
+        return
+    fi
+
+    unpackPhase
+    cd $sourceRoot
+
+    if test -z "$phases"; then
+        phases="patchPhase configurePhase buildPhase checkPhase \
+            installPhase distPhase";
+    fi
+
+    for i in $phases; do
+        dumpVars
+        eval "$i"
+    done
+    
+    stopNest
+}
+
+
+dumpVars
diff --git a/pkgs/top-level/all-packages.nix b/pkgs/top-level/all-packages.nix
index 57a5d864a5d8..08222caf6cd0 100644
--- a/pkgs/top-level/all-packages.nix
+++ b/pkgs/top-level/all-packages.nix
@@ -160,6 +160,8 @@ rec {
 
   stdenv = if bootStdenv == null then defaultStdenv else bootStdenv;
 
+  stdenvNew = overrideSetup stdenv ../stdenv/generic/setup-new2.sh;
+
 
   ### BUILD SUPPORT
 
@@ -190,10 +192,15 @@ rec {
 
   makeWrapper = ../build-support/make-wrapper/make-wrapper.sh;
 
-  substituter = ../build-support/substitute/substitute.sh;
+  runCommand = name: env: buildCommand: stdenvNew.mkDerivation ({
+    inherit name buildCommand;
+  } // env);
 
-  genericSubstituter = import ../build-support/substitute/generic-substituter.nix {
-    inherit stdenv;
+  # !!! obsolete
+  substitute = ../build-support/substitute/substitute.sh;
+
+  substituteAll = import ../build-support/substitute/substitute-all.nix {
+    stdenv = stdenvNew;
   };
 
   nukeReferences = import ../build-support/nuke-references/default.nix {
@@ -2926,7 +2933,7 @@ rec {
     };
 
     pysqlite = import ../development/libraries/pysqlite {
-      inherit stdenv fetchurl python substituter sqlite;
+      inherit stdenv fetchurl python substitute sqlite;
     };
   };