diff --git a/Makefile b/Makefile
index 55c10b7d..f01df32f 100644
--- a/Makefile
+++ b/Makefile
@@ -2,7 +2,7 @@
 # This simple Makefile uses rebar to compile/clean if it
 # exists, else does it explicitly.
 
-EBINDIR = ebin
+BINDIR = ebin
 SRCDIR = src
 INCDIR = include
 DOCDIR = doc
@@ -11,7 +11,7 @@ EMACSDIR = emacs
 VPATH = $(SRCDIR)
 
 ERLCFLAGS = -W0 +debug_info
-ERLC = erlc -I $(INCDIR) -o $(EBINDIR) $(ERLCFLAGS)
+ERLC = erlc
 
 ## The .erl and .beam files
 SRCS = $(notdir $(wildcard $(SRCDIR)/*.erl))
@@ -20,18 +20,35 @@ EBINS = $(SRCS:.erl=.beam)
 ## Where we install LFE, in the ERL_LIBS directory.
 INSTALLDIR = $(ERL_LIBS)/lfe
 
+.SUFFIXES: .erl .beam
+
+$(BINDIR)/%.beam: %.erl
+	$(ERLC) -I $(INCDIR) -o $(BINDIR) $(ERLCFLAGS) $<
+
+$(SRCDIR)/%.erl: %.xrl
+	$(ERLC) -o $(SRCDIR) $<
+
+$(SRCDIR)/%.erl: %.yrl
+	$(ERLC) -o $(SRCDIR) $<
+
 all: compile docs
 
+.PHONY: compile erlc_compile install docs clean
+
+## Compile using rebar if it exists else using make
 compile:
 	if which -s rebar; \
 	then rebar compile; \
-	else $(ERLC) $(addprefix $(SRCDIR)/, $(SRCS)); \
+	else $(MAKE) $(MFLAGS) erlc_compile; \
 	fi
 
+## Compile using erlc
+erlc_compile: $(addprefix $(BINDIR)/, $(EBINS))
+
 install:
 	if [ "$$ERL_LIBS" != "" ]; \
-	then mkdir -p $(INSTALLDIR)/$(EBINDIR) ; \
-	     cp -pPR $(EBINDIR) $(INSTALLDIR); \
+	then mkdir -p $(INSTALLDIR)/$(BINDIR) ; \
+	     cp -pPR $(BINDIR) $(INSTALLDIR); \
 	     cp -pPR $(EMACSDIR) $(INSTALLDIR); \
 	     cp -pPR $(INCDIR) $(INSTALLDIR); \
 	else exit 1; \
@@ -42,6 +59,6 @@ docs:
 clean:
 	if which -s rebar; \
 	then rebar clean; \
-	else rm -rf $(EBINDIR)/*.beam; \
+	else rm -rf $(BINDIR)/*.beam; \
 	fi
 	rm -rf erl_crash.dump