diff --git a/makepanda/installpanda.py b/makepanda/installpanda.py
index 6671b7a9b1..831afa983f 100644
--- a/makepanda/installpanda.py
+++ b/makepanda/installpanda.py
@@ -113,6 +113,9 @@ def InstallPanda(destdir="", prefix="/usr", outputdir="built"):
     oscmd("mkdir -p "+destdir+PPATH)
     oscmd("mkdir -p "+destdir+"/etc/ld.so.conf.d")
     WriteFile(destdir+prefix+"/share/panda3d/direct/__init__.py", "")
+    Configrc = ReadFile(outputdir+"/etc/Config.prc")
+    Configrc.replace("model-path    $THIS_PRC_DIR/..", "model-path    "+destdir+prefix+"/share/panda3d")
+    WriteFile(destdir+"/etc/Config.prc", Configrc)
     oscmd("cp "+outputdir+"/etc/Config.prc      "+destdir+"/etc/Config.prc")
     oscmd("cp "+outputdir+"/etc/Confauto.prc    "+destdir+"/etc/Confauto.prc")
     oscmd("cp -R "+outputdir+"/include          "+destdir+prefix+"/include/panda3d")