diff --git a/lib/bundler/installer.rb b/lib/bundler/installer.rb
index 02c3f4240e8..dbc47c8b6cc 100644
--- a/lib/bundler/installer.rb
+++ b/lib/bundler/installer.rb
@@ -21,7 +21,9 @@ def run(options)
           Bundler.ui.debug "  * Not in requested group; skipping."
           next
         end
+
         spec.source.install(spec)
+
         Bundler.ui.info ""
       end
 
diff --git a/lib/bundler/source.rb b/lib/bundler/source.rb
index 258a218961b..299a9c607fd 100644
--- a/lib/bundler/source.rb
+++ b/lib/bundler/source.rb
@@ -118,8 +118,11 @@ def install(spec)
 
         Bundler.ui.debug "  * Installing from pack"
         installer = Gem::Installer.new "#{@path}/#{spec.full_name}.gem",
-          :install_dir => Gem.dir,
-          :ignore_dependencies => true
+          :install_dir         => Gem.dir,
+          :ignore_dependencies => true,
+          :wrappers            => true,
+          :env_shebang         => true,
+          :bin_dir             => "#{Gem.dir}/bin"
 
         installer.install
       end
@@ -176,10 +179,29 @@ def local_specs
 
       def install(spec)
         Bundler.ui.debug "  * Using path #{path}"
+        generate_bin(spec)
       end
 
       alias specs local_specs
 
+    private
+
+      def generate_bin(spec)
+        # HAX -- Generate the bin
+        bin_dir = "#{Gem.dir}/bin"
+        gem_dir = spec.full_gem_path
+        installer = Gem::Installer.allocate
+        installer.instance_eval do
+          @spec     = spec
+          @bin_dir  = bin_dir
+          @gem_dir  = gem_dir
+          @wrappers = true
+          @env_shebang = false
+          @format_executable = false
+        end
+        installer.generate_bin
+      end
+
     end
 
     class Git < Path
@@ -241,6 +263,7 @@ def install(spec)
           checkout
           @installed = true
         end
+        generate_bin(spec)
       end
 
       def lock
diff --git a/spec/install/git_spec.rb b/spec/install/git_spec.rb
index 580e3894076..07b041108d3 100644
--- a/spec/install/git_spec.rb
+++ b/spec/install/git_spec.rb
@@ -3,9 +3,9 @@
 describe "gemfile install with git sources" do
   describe "when floating on master" do
     before :each do
-      in_app_root
-
-      build_git "foo"
+      build_git "foo" do |s|
+        s.executables = "foobar"
+      end
 
       install_gemfile <<-G
         git "#{lib_path('foo-1.0')}"
@@ -43,6 +43,11 @@
         out.should == "WIN"
       end
     end
+
+    it "setups executables" do
+      bundle "exec foobar"
+      out.should == "1.0"
+    end
   end
 
   describe "when specifying a revision" do
diff --git a/spec/install/path_spec.rb b/spec/install/path_spec.rb
index 3d02348d3b9..b8fbd628e68 100644
--- a/spec/install/path_spec.rb
+++ b/spec/install/path_spec.rb
@@ -60,6 +60,20 @@
     should_be_installed "foo 1.0"
   end
 
+  it "setups up executables" do
+    build_lib "foo" do |s|
+      s.executables = "foobar"
+    end
+
+    install_gemfile <<-G
+      path "#{lib_path('foo-1.0')}"
+      gem 'foo'
+    G
+
+    bundle "exec foobar"
+    out.should == "1.0"
+  end
+
   describe "when locked" do
     it "keeps source pinning" do
       build_lib "foo", "1.0", :path => lib_path('foo')