diff --git a/ChangeLog b/ChangeLog
index b6105397..723c68cb 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,5 +1,9 @@
 1999-01-20  Alexandre Oliva  <oliva@dcc.unicamp.br>
 
+	* ltmain.in (compile): when compiling both PIC and non-PIC, write
+ 	the PIC object to .libs/.lo and only rename it to .lo after
+ 	compiling the .o, to avoid fooling make dependencies
+
 	* mdemo/main.c (LTDL_PREOPENED_SYMBOLS): remove
 
 1999-01-20  Gary V. Vaughan  <gvaughan@oranda.demon.co.uk>
diff --git a/ltmain.in b/ltmain.in
index ab1cf752..46e0e059 100644
--- a/ltmain.in
+++ b/ltmain.in
@@ -372,9 +372,9 @@ if test -z "$show_help"; then
 
     # Delete any leftover library objects.
     if test "$build_old_libs" = yes; then
-      removelist="$obj $libobj $lockfile"
+      removelist="$obj $libobj"
     else
-      removelist="$libobj $lockfile"
+      removelist="$libobj"
     fi
 
     $run $rm $removelist
@@ -429,12 +429,34 @@ compiler."
 
       # All platforms use -DPIC, to notify preprocessed assembler code.
       command="$base_compile$pic_flag -DPIC $srcfile"
+      if test "$build_old_libs" = yes; then
+        lo_libobj="$libobj"
+	dir=`$echo "X$libobj" | $Xsed -e 's%/[^/]*$%%'`
+	if test "X$dir" = "X$libobj"; then
+	  dir="$objdir"
+	else
+	  dir="$dir/$objdir"
+	fi
+        libobj="$dir/"`$echo "X$libobj" | $Xsed -e 's%^.*/%%'`
+
+	if test -d "$dir"; then
+	  $show "$rm $libobj"
+	  $run $rm $libobj
+	else
+	  $show "$mkdir $dir"
+	  $run $mkdir $dir
+	  status=$?
+	  if test $status -ne 0 && test ! -d $dir; then
+	    exit $status
+	  fi
+	fi
+      fi
       if test "$compiler_o_lo" = yes; then
-	command="$command -o $libobj"
 	output_obj="$libobj"
+	command="$command -o $output_obj"
       elif test "$compiler_c_o" = yes; then
-	command="$command -o $obj"
 	output_obj="$obj"
+	command="$command -o $output_obj"
       fi
 
       $show "$command"
@@ -465,7 +487,7 @@ compiler."
       fi
 
       # Just move the object if needed, then go on to compile the next one
-      if test "$compiler_o_lo" = no && test x"$output_obj" != x"$libobj"; then
+      if test x"$output_obj" != x"$libobj"; then
 	$show "$mv $output_obj $libobj"
 	if $run $mv $output_obj $libobj; then :
 	else
@@ -476,11 +498,24 @@ compiler."
       fi
 
       # If we have no pic_flag, then copy the object into place and finish.
-      if test -z "$pic_flag"; then
-	$show $rm $obj
-	$run $rm $obj
-	$show "$LN_S $libobj $obj"
-	if $run $LN_S $libobj $obj; then
+      if test -z "$pic_flag" && test "$build_old_libs" = yes; then
+	# Rename the .lo from within objdir to obj
+        if test -f $obj; then
+	  $show $rm $obj
+	  $run $rm $obj
+	fi
+
+	$show "$mv $libobj $obj"
+	if $run $mv $libobj $obj; then :
+	else
+	  error=$?
+	  $run $rm $removelist
+	  exit $error
+	fi
+
+	# Now arrange that obj and lo_libobj become the same file
+	$show "$LN_S $obj $lo_libobj"
+	if $run $LN_S $obj $lo_libobj; then
 	  exit 0
 	else
 	  error=$?
@@ -531,7 +566,7 @@ compiler."
       fi
 
       # Just move the object if needed
-      if test "$compiler_c_o" = no && test x"$output_obj" != x"$obj"; then
+      if test x"$output_obj" != x"$obj"; then
 	$show "$mv $output_obj $obj"
 	if $run $mv $output_obj $obj; then :
 	else
@@ -540,6 +575,22 @@ compiler."
 	  exit $error
 	fi
       fi
+
+      # Create an invalid libtool object if no PIC, so that we do not
+      # accidentally link it into a program.
+      if test "$build_libtool_libs" != yes; then
+        $show "echo timestamp > $libobj"
+        $run eval "echo timestamp > \$libobj" || exit $?
+      else
+	# Move the .lo from within objdir
+	$show "$mv $libobj $lo_libobj"
+	if $run $mv $libobj $lo_libobj; then :
+	else
+	  error=$?
+	  $run $rm $removelist
+	  exit $error
+	fi
+      fi
     fi
 
     # Unlock the critical section if it was locked
@@ -547,13 +598,6 @@ compiler."
       $rm "$lockfile"
     fi
 
-    # Create an invalid libtool object if no PIC, so that we do not
-    # accidentally link it into a program.
-    if test "$build_libtool_libs" != yes; then
-      $show "echo timestamp > $libobj"
-      $run eval "echo timestamp > \$libobj" || exit $?
-    fi
-
     exit 0
     ;;