diff --git a/guix/build-system/python.scm b/guix/build-system/python.scm
index 17173f121..a05fd5a79 100644
--- a/guix/build-system/python.scm
+++ b/guix/build-system/python.scm
@@ -153,7 +153,7 @@ pre-defined variants."
                 #:rest arguments)
   "Return a bag for NAME."
   (define private-keywords
-    '(#:source #:target #:python #:inputs #:native-inputs))
+    '(#:source #:target #:python #:inputs))
 
   (and (not target)                               ;XXX: no cross-compilation
        (bag
@@ -174,6 +174,9 @@ pre-defined variants."
 
 (define* (python-build store name inputs
                        #:key
+                       (native-inputs '())
+                       ;; TODO: Something like this:
+                       ;; (disallowed-references native-inputs)
                        (tests? #t)
                        (test-target "test")
                        (use-setuptools? #t)
@@ -189,17 +192,24 @@ pre-defined variants."
                                   (guix build utils))))
   "Build SOURCE using PYTHON, and with INPUTS.  This assumes that SOURCE
 provides a 'setup.py' file as its build system."
+  (define canonicalize-reference
+    (match-lambda
+      (((? derivation? source))
+       (derivation->output-path source))
+      (((? package? package))
+       (derivation->output-path
+        (package-derivation store package system)))
+      ((source)
+       source)
+      (source
+       source)))
+
   (define builder
     `(begin
        (use-modules ,@modules)
        (python-build #:name ,name
-                     #:source ,(match (assoc-ref inputs "source")
-                                 (((? derivation? source))
-                                  (derivation->output-path source))
-                                 ((source)
-                                  source)
-                                 (source
-                                  source))
+                     #:source ,(canonicalize-reference
+                                (assoc-ref inputs "source"))
                      #:configure-flags ,configure-flags
                      #:system ,system
                      #:test-target ,test-target
@@ -209,7 +219,17 @@ provides a 'setup.py' file as its build system."
                      #:outputs %outputs
                      #:search-paths ',(map search-path-specification->sexp
                                            search-paths)
-                     #:inputs %build-inputs)))
+                     #:inputs %build-inputs
+
+                     ;; We call them "native inputs" but there's no
+                     ;; cross-compilation here, so that really means
+                     ;; "build-time-only" inputs, things should not be
+                     ;; run-time dependencies.
+                     #:native-inputs ',(map (match-lambda
+                                              ((name . rest)
+                                               `(,name
+                                                 . ,(canonicalize-reference rest))))
+                                            native-inputs))))
 
   (define guile-for-build
     (match guile
@@ -222,6 +242,8 @@ provides a 'setup.py' file as its build system."
 
   (build-expression->derivation store name builder
                                 #:inputs inputs
+                                ;; TODO:
+                                ;; #:disallowed-references disallowed-references
                                 #:system system
                                 #:modules imported-modules
                                 #:outputs outputs
diff --git a/guix/build/python-build-system.scm b/guix/build/python-build-system.scm
index dd07986b9..1ca26104b 100644
--- a/guix/build/python-build-system.scm
+++ b/guix/build/python-build-system.scm
@@ -1,5 +1,5 @@
 ;;; GNU Guix --- Functional package management for GNU
-;;; Copyright © 2013, 2015, 2016 Ludovic Courtès <ludo@gnu.org>
+;;; Copyright © 2013, 2015, 2016, 2017 Ludovic Courtès <ludo@gnu.org>
 ;;; Copyright © 2013 Andreas Enge <andreas@enge.fr>
 ;;; Copyright © 2013 Nikita Karetnikov <nikita@karetnikov.org>
 ;;; Copyright © 2015 Mark H Weaver <mhw@netris.org>
@@ -184,7 +184,7 @@ when running checks after installing the package."
                          configure-flags)))
     (call-setuppy "install" params use-setuptools?)))
 
-(define* (wrap #:key inputs outputs #:allow-other-keys)
+(define* (wrap #:key native-inputs inputs outputs #:allow-other-keys)
   (define (list-of-files dir)
     (map (cut string-append dir "/" <>)
          (or (scandir dir (lambda (f)
@@ -199,14 +199,27 @@ when running checks after installing the package."
                         (string-append dir "/sbin"))))
                 outputs))
 
+  (define build-time-inputs
+    ;; Built-time-only dependencies.
+    (match native-inputs
+      (((names . directories) ...)
+       directories)))
+
+  (define (build-time-dependency? item)
+    (any (cut string-prefix? <> item)
+         build-time-inputs))
+
+  ;; Wrap binaries such that PYTHONPATH is set appropriately, but remove
+  ;; build-time-only dependencies (aka. #:native-inputs) from the search path.
   (let* ((out  (assoc-ref outputs "out"))
          (python (assoc-ref inputs "python"))
+         (path (search-path-as-string->list
+                (or (getenv "PYTHONPATH") "")))
          (var `("PYTHONPATH" prefix
                 ,(cons (string-append out "/lib/python"
                                       (get-python-version python)
                                       "/site-packages")
-                       (search-path-as-string->list
-                        (or (getenv "PYTHONPATH") ""))))))
+                       (remove build-time-dependency? path)))))
     (for-each (lambda (dir)
                 (let ((files (list-of-files dir)))
                   (for-each (cut wrap-program <> var)