diff --git a/ChangeLog b/ChangeLog
index 5c5854bfa9..47a6cfa8d2 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,11 @@
+2003-01-28  Derek Atkins  <derek@ihtfp.com>
+
+	* configure.in -- fix the PG test to deal properly with non-standard
+	  locations.  In particular, AC_CHECK_HEADERS() uses CPPFLAGS, not
+	  CFLAGS.
+	* src/backend/postgres/Makefile.am: use PGSQL_CFLAGS and PGSQL_LIBS
+	* src/backend/postgres/test/Makefile.am: use PGSQL_CFLAGS
+
 2003-01-28  Christian Stimming  <stimming@tuhh.de>
 
 	* po/it.po: Updated Italian translation by Lorenzo Cappelletti
diff --git a/configure.in b/configure.in
index 7e471d2da2..cf4dbe01f5 100644
--- a/configure.in
+++ b/configure.in
@@ -390,9 +390,11 @@ AC_ARG_ENABLE( sql,
 
       PGSQL_CFLAGS=`${PG_CONFIG} --includedir`
       if test "x$PGSQL_CFLAGS" != x; then
-         CFLAGS="${CFLAGS} -I${PGSQL_CFLAGS}"
+	PGSQL_CFLAGS="-I${PGSQL_CFLAGS}"
       fi
 
+      saved_CPPFLAGS="${CPPFLAGS}"
+      CPPFLAGS="${CPPFLAGS} ${PGSQL_CFLAGS}"
       AC_CHECK_HEADERS(pgsql/libpq-fe.h postgresql/libpq-fe.h libpq-fe.h)
       if test "x$ac_cv_header_pgsql_libpq_fe_h$ac_cv_header_postgresql_libpq_fe_h$ac_cv_header_libpq_fe_h" = xnonono; then
          AC_MSG_ERROR([Cannot find PostgreSQL headers; won't build sql backend]) 
@@ -414,16 +416,15 @@ AC_ARG_ENABLE( sql,
           done
 	fi
         
-	AS_SCRUB_INCLUDE(CFLAGS)
-
-        saved_LIBS="$LIBS"
+	AS_SCRUB_INCLUDE(PGSQL_CFLAGS)
 
         PGSQL_LIBS=`${PG_CONFIG} --libdir`
         if test "x$PGSQL_LIBS" != x; then
-           LIBS="-L${PGSQL_LIBS} -lpq $LIBS"
-        else
-           LIBS="-lpq $LIBS"
+	  PGSQL_LIBS="-L${PGSQL_LIBS}"
         fi
+
+        saved_LIBS="$LIBS"
+ 	LIBS="${PGSQL_LIBS} -lpq $LIBS"
         AC_MSG_CHECKING(for libpq)
         AC_TRY_LINK(
           [
@@ -442,10 +443,13 @@ AC_ARG_ENABLE( sql,
         )
         LIBS="$saved_LIBS"
       fi
+      CPPFLAGS="$saved_CPPFLAGS"
     fi
   ]
 )
 
+AC_SUBST(PGSQL_CFLAGS)
+AC_SUBST(PGSQL_LIBS)
 AC_SUBST(SQL_DIR)
 
 
diff --git a/src/backend/postgres/Makefile.am b/src/backend/postgres/Makefile.am
index e6524b947d..d65f8c7f43 100644
--- a/src/backend/postgres/Makefile.am
+++ b/src/backend/postgres/Makefile.am
@@ -4,7 +4,7 @@ pkglib_LTLIBRARIES = libgncmod-backend-postgres.la
 
 libgncmod_backend_postgres_la_LDFLAGS = -module 
 
-libgncmod_backend_postgres_la_LIBADD  =  -lpq  \
+libgncmod_backend_postgres_la_LIBADD  =  ${PGSQL_LIBS} -lpq  \
   ${top_builddir}/src/engine/libgncmod-engine.la \
   ${GLIB_LIBS}
 
@@ -96,6 +96,7 @@ AM_CFLAGS = \
 	-I../.. -I${srcdir}/../.. \
 	-I../../engine -I${srcdir}/../../engine \
 	-I../../gnc-module -I${srcdir}/../../gnc-module \
+	${PGSQL_CFLAGS} \
 	${GLIB_CFLAGS}
 
 $(M4_SRC): table.m4
diff --git a/src/backend/postgres/test/Makefile.am b/src/backend/postgres/test/Makefile.am
index fa334f9fd3..0ee351d4d7 100644
--- a/src/backend/postgres/test/Makefile.am
+++ b/src/backend/postgres/test/Makefile.am
@@ -39,6 +39,7 @@ AM_CFLAGS = \
   -I${top_srcdir}/src/engine/test-core \
   -I.. \
   -I${srcdir}/.. \
+  ${PGSQL_CFLAGS} \
   ${GLIB_CFLAGS} \
   ${GUILE_INCS}