diff --git a/build_library/catalyst_toolchains.sh b/build_library/catalyst_toolchains.sh
index 07428f7350..2ab4c46dae 100644
--- a/build_library/catalyst_toolchains.sh
+++ b/build_library/catalyst_toolchains.sh
@@ -19,17 +19,22 @@ configure_target_root() {
     CBUILD="$(portageq envvar CBUILD)" \
         CHOST="${cross_chost}" \
         ROOT="/build/${board}" \
-        SYSROOT="/usr/${cross_chost}" \
+        SYSROOT="/build/${board}" \
         _configure_sysroot "${profile}"
 }
 
 build_target_toolchain() {
     local board="$1"
     local ROOT="/build/${board}"
+    local SYSROOT="/usr/$(get_board_chost "${board}")"
+
+    mkdir -p "${ROOT}/usr"
+    cp -at "${ROOT}" "${SYSROOT}"/lib*
+    cp -at "${ROOT}"/usr "${SYSROOT}"/usr/include "${SYSROOT}"/usr/lib*
 
     # --root is required because run_merge overrides ROOT=
     PORTAGE_CONFIGROOT="$ROOT" \
-        run_merge -u --root="$ROOT" "${TOOLCHAIN_PKGS[@]}"
+        run_merge -u --root="$ROOT" --sysroot="$ROOT" "${TOOLCHAIN_PKGS[@]}"
 }
 
 configure_crossdev_overlay / /tmp/crossdev
diff --git a/build_library/toolchain_util.sh b/build_library/toolchain_util.sh
index d8649a12d1..53f829a4b4 100644
--- a/build_library/toolchain_util.sh
+++ b/build_library/toolchain_util.sh
@@ -257,7 +257,7 @@ _configure_sysroot() {
     $sudo eselect profile set --force "$profile"
 
     $sudo tee "${ROOT}/etc/portage/make.conf" >/dev/null <<EOF
-$(portageq envvar -v CHOST CBUILD ROOT SYSROOT \
+$(portageq envvar -v CHOST CBUILD ROOT \
     PORTDIR PORTDIR_OVERLAY DISTDIR PKGDIR)
 HOSTCC=\${CBUILD}-gcc
 PKG_CONFIG_PATH="\${SYSROOT}/usr/lib/pkgconfig/"
@@ -372,7 +372,7 @@ install_cross_libs() {
     done | $sudo tee "${package_provided}/cross-${cross_chost}" >/dev/null
 
     # OK, clear as mud? Install those dependencies now!
-    PORTAGE_CONFIGROOT="$ROOT" ROOT="$ROOT" $sudo emerge "$@" -u $cross_deps
+    PORTAGE_CONFIGROOT="$ROOT" $sudo emerge --root="$ROOT" --sysroot="$ROOT" "$@" -u $cross_deps
 }
 
 # Get the latest GCC profile for a given CHOST
diff --git a/build_library/vm_image_util.sh b/build_library/vm_image_util.sh
index 7fd5408124..2732ac2391 100644
--- a/build_library/vm_image_util.sh
+++ b/build_library/vm_image_util.sh
@@ -464,7 +464,7 @@ install_oem_package() {
     # build anything else from source here. emerge doesn't have a way to
     # enforce this in a single command.
     info "Building ${oem_pkg}"
-    USE="${oem_use}" emerge-${BOARD} --root="${oem_tmp}" \
+    USE="${oem_use}" emerge-${BOARD} \
         --nodeps --buildpkgonly --usepkg n \
         --quiet "${oem_pkg}"
 
@@ -474,7 +474,8 @@ install_oem_package() {
     fi
 
     info "Installing ${oem_pkg} to OEM partition"
-    USE="${oem_use}" emerge-${BOARD} --root="${oem_tmp}" \
+    USE="${oem_use}" emerge-${BOARD} \
+        --root="${oem_tmp}" --sysroot="${oem_tmp}" \
         --root-deps=rdeps --usepkgonly ${getbinpkg} \
         --quiet --jobs=2 "${oem_pkg}"
     sudo rsync -a "${oem_tmp}/usr/share/oem/" "${VM_TMP_ROOT}/usr/share/oem/"
diff --git a/build_torcx_store b/build_torcx_store
index b17a027775..3e1d59a9ec 100755
--- a/build_torcx_store
+++ b/build_torcx_store
@@ -79,12 +79,25 @@ function torcx_build() (
         [ -s "${tmproot}/etc/portage/bashrc" ] &&
         . "${tmproot}/etc/portage/bashrc"
 
+        # Build binary packages using dev files in the board root.
+        emerge-${BOARD} \
+            --buildpkg \
+            --buildpkgonly \
+            --nodeps \
+            --oneshot \
+            --quiet \
+            --root-deps=rdeps \
+            "${pkg}"
+
+        # Install the binary packages in the temporary torcx image root.
         emerge-${BOARD} \
             --nodeps \
             --oneshot \
+            --quiet \
             --root="${tmproot}" \
             --root-deps=rdeps \
-            --quiet \
+            --sysroot="${tmproot}" \
+            --usepkgonly \
             "${pkg}"
 )
 
diff --git a/setup_board b/setup_board
index ec6129a8fe..6e16283f8a 100755
--- a/setup_board
+++ b/setup_board
@@ -305,19 +305,28 @@ if [[ ${FLAGS_regen_configs} -eq ${FLAGS_FALSE} ]]; then
       EMERGE_FLAGS+=" --usepkg"
     fi
     EMERGE_FLAGS+=" --getbinpkg"
-    EMERGE_TOOLCHAIN_FLAGS+=" --usepkgonly --getbinpkg --rebuilt-binaries n"
-  else
-    # When binary packages are disabled we need to make sure the cross
-    # sysroot includes any build dependencies for the toolchain.
-    info "Installing toolchain build dependencies"
-    install_cross_libs "${BOARD_CHOST}" ${EMERGE_FLAGS} --buildpkg=n
   fi
 
   info "Installing baselayout"
   "${EMERGE_WRAPPER}" ${EMERGE_FLAGS} --nodeps sys-apps/baselayout
 
+  if [[ "${FLAGS_usepkg}" -ne "${FLAGS_TRUE}" ||
+        "${FLAGS_getbinpkg}" -ne "${FLAGS_TRUE}" ]]
+  then
+    # When binary packages are disabled we need to make sure the cross
+    # sysroot includes any build dependencies for the toolchain.
+    info "Installing toolchain build dependencies"
+    install_cross_libs "${BOARD_CHOST}" ${EMERGE_FLAGS} --buildpkg=n
+
+    info "Building toolchain"
+    "${EMERGE_WRAPPER}" --buildpkg --buildpkgonly \
+        --root="/usr/${BOARD_CHOST}" --sysroot="/usr/${BOARD_CHOST}" \
+	${EMERGE_TOOLCHAIN_FLAGS} "${TOOLCHAIN_PKGS[@]}"
+  fi
+
   info "Installing toolchain"
-  SYSROOT="/usr/${BOARD_CHOST}" "${EMERGE_WRAPPER}" \
+  "${EMERGE_WRAPPER}" \
+      --usepkgonly --getbinpkg --rebuilt-binaries n \
       ${EMERGE_TOOLCHAIN_FLAGS} "${TOOLCHAIN_PKGS[@]}"
 fi