diff --git a/Library/Homebrew/build.rb b/Library/Homebrew/build.rb
index 34c257dc84..dd3e024427 100755
--- a/Library/Homebrew/build.rb
+++ b/Library/Homebrew/build.rb
@@ -61,14 +61,18 @@ def install f
   f.recursive_deps.uniq.each do |dep|
     dep = Formula.factory dep
     if dep.keg_only?
-      ENV.prepend 'LDFLAGS', "-L#{dep.lib}"
-      ENV.prepend 'CPPFLAGS', "-I#{dep.include}"
-      ENV.prepend 'PATH', "#{dep.bin}", ':'
+      opt = HOMEBREW_PREFIX/:opt/dep.name
 
-      pcdir = dep.lib/'pkgconfig'
+      raise "#{opt} not present\nReinstall #{dep}." unless opt.directory?
+
+      ENV.prepend 'LDFLAGS', "-L#{opt}/lib"
+      ENV.prepend 'CPPFLAGS', "-I#{opt}/include"
+      ENV.prepend 'PATH', "#{opt}/bin", ':'
+
+      pcdir = opt/'lib/pkgconfig'
       ENV.prepend 'PKG_CONFIG_PATH', pcdir, ':' if pcdir.directory?
 
-      acdir = dep.share/'aclocal'
+      acdir = opt/'share/aclocal'
       ENV.prepend 'ACLOCAL_PATH', acdir, ':' if acdir.directory?
     end
   end
diff --git a/Library/Homebrew/cmd/uninstall.rb b/Library/Homebrew/cmd/uninstall.rb
index cc13a18c82..d719be96a2 100644
--- a/Library/Homebrew/cmd/uninstall.rb
+++ b/Library/Homebrew/cmd/uninstall.rb
@@ -10,6 +10,7 @@ module Homebrew extend self
         puts "Uninstalling #{keg}..."
         keg.unlink
         keg.uninstall
+        rm_opt_link keg.fname
       end
     else
       ARGV.named.each do |name|
@@ -30,10 +31,18 @@ module Homebrew extend self
           end
           rack.rmtree
         end
+
+        rm_opt_link name
       end
     end
   rescue MultipleVersionsInstalledError => e
     ofail e
     puts "Use `brew remove --force #{e.name}` to remove all versions."
   end
+
+  def rm_opt_link name
+    optlink = HOMEBREW_PREFIX/:opt/name
+    optlink.unlink if optlink.symlink?
+  end
+
 end
diff --git a/Library/Homebrew/formula.rb b/Library/Homebrew/formula.rb
index cb6b44eb81..78209feb75 100644
--- a/Library/Homebrew/formula.rb
+++ b/Library/Homebrew/formula.rb
@@ -148,6 +148,8 @@ class Formula
     self.class.build
   end
 
+  def opt_prefix; HOMEBREW_PREFIX/:opt/name end
+
   # Use the @active_spec to detect the download strategy.
   # Can be overriden to force a custom download strategy
   def download_strategy
diff --git a/Library/Homebrew/formula_installer.rb b/Library/Homebrew/formula_installer.rb
index 08ddd192f0..1910348dbd 100644
--- a/Library/Homebrew/formula_installer.rb
+++ b/Library/Homebrew/formula_installer.rb
@@ -172,10 +172,18 @@ class FormulaInstaller
   def finish
     ohai 'Finishing up' if ARGV.verbose?
 
-    unless f.keg_only?
+    if f.keg_only?
+      begin
+        Keg.new(f.prefix).optlink
+      rescue Exception => e
+        onoe "Failed to create: #{f.opt_prefix}"
+        puts "Things that depend on #{f} will probably not build."
+      end
+    else
       link
-      check_PATH
+      check_PATH unless f.keg_only?
     end
+
     fix_install_names
 
     ohai "Summary" if ARGV.verbose? or show_summary_heading
diff --git a/Library/Homebrew/keg.rb b/Library/Homebrew/keg.rb
index d7ad80aee2..3bae926057 100644
--- a/Library/Homebrew/keg.rb
+++ b/Library/Homebrew/keg.rb
@@ -42,7 +42,7 @@ class Keg < Pathname
         Find.prune if src.directory?
       end
     end
-    linked_keg_record.unlink if linked_keg_record.exist?
+    linked_keg_record.unlink if linked_keg_record.symlink?
     n
   end
 
@@ -126,7 +126,25 @@ class Keg < Pathname
 
     linked_keg_record.make_relative_symlink(self) unless mode == :dryrun
 
+    optlink unless mode == :dryrun
+
     return $n + $d
+  rescue Exception
+    opoo "Could not link #{fname}. Unlinking..."
+    unlink
+    raise
+  end
+
+  def optlink
+    from = HOMEBREW_PREFIX/:opt/fname
+    if from.symlink?
+      from.delete
+    elsif from.directory?
+      from.rmdir
+    elsif from.exist?
+      from.delete
+    end
+    from.make_relative_symlink(self)
   end
 
 protected
diff --git a/Library/Homebrew/keg_fix_install_names.rb b/Library/Homebrew/keg_fix_install_names.rb
index 7851fec263..75e1def22e 100644
--- a/Library/Homebrew/keg_fix_install_names.rb
+++ b/Library/Homebrew/keg_fix_install_names.rb
@@ -56,8 +56,13 @@ class Keg
     end
 
     # the shortpath ensures that library upgrades don’t break installed tools
-    shortpath = HOMEBREW_PREFIX + Pathname.new(file).relative_path_from(self)
-    id = if shortpath.exist? then shortpath else file end
+    relative_path = Pathname.new(file).relative_path_from(self)
+    shortpath = HOMEBREW_PREFIX.join(relative_path)
+    id = if shortpath.exist?
+      shortpath
+    else
+      "#{HOMEBREW_PREFIX}/opt/#{fname}/#{relative_path}"
+    end
 
     yield id, install_names
   end