diff --git a/Pmodules/libpbuild.bash b/Pmodules/libpbuild.bash
index d71b252..14fc373 100644
--- a/Pmodules/libpbuild.bash
+++ b/Pmodules/libpbuild.bash
@@ -246,7 +246,7 @@ set_full_module_name_and_prefix() {
 	# set full module name
 	fully_qualified_module_name=$( join_by '/' "${name[@]}" )
 	# set PREFIX of module
-	PREFIX="${PMODULES_ROOT}/${GROUP}/"
+	PREFIX="${overlay}/${GROUP}/"
         local -i i=0
 	for ((i=${#name[@]}-1; i >= 0; i--)); do
 		PREFIX+="${name[i]}/"
@@ -916,7 +916,7 @@ pbuild::make_all() {
 			return
 		fi
 		# assemble name of modulefile
-		local dst="${PMODULES_ROOT}/"
+		local dst="${overlay}/"
 		dst+="${GROUP}/"
 		dst+="${PMODULES_MODULEFILES_DIR}/"
 		dst+="${fully_qualified_module_name}"
@@ -932,7 +932,7 @@ pbuild::make_all() {
 	}
 
         install_release_file() {
-		local dst="${PMODULES_ROOT}/"
+		local dst="${overlay}/"
 		dst+="${GROUP}/"
 		dst+="${PMODULES_MODULEFILES_DIR}/"
 		dst+="${fully_qualified_module_name}"
@@ -1082,7 +1082,7 @@ pbuild::make_all() {
 		fi
 
 		# assemble name of modulefile
-		local dst="${PMODULES_ROOT}/"
+		local dst="${overlay}/"
 		dst+="${GROUP}/"
 		dst+="${PMODULES_MODULEFILES_DIR}/"
 		dst+="${fully_qualified_module_name}"
@@ -1262,7 +1262,7 @@ pbuild.bootstrap() {
  
 	MODULECMD=$(which true)
 	GROUP='Tools'
-	PREFIX="${PMODULES_ROOT}/${GROUP}/Pmodules/${PMODULES_VERSION}"
+	PREFIX="${overlay}/${GROUP}/Pmodules/${PMODULES_VERSION}"
 
 	C_INCLUDE_PATH="${PREFIX}/include"
 	CPLUS_INCLUDE_PATH="${PREFIX}/include"
diff --git a/Pmodules/modbuild.in b/Pmodules/modbuild.in
index 9b71194..592dda4 100755
--- a/Pmodules/modbuild.in
+++ b/Pmodules/modbuild.in
@@ -67,7 +67,7 @@ BUILD-STEPS OPTIONS:
 --all
 	Run throu all steps including cleanup.
 
---update-modulefiles
+-update-modulefiles
 	Only install the modulefile and set the release.
 
 MISCELLANEOUS OPTIONS:
@@ -111,6 +111,8 @@ MISCELLANEOUS OPTIONS:
 --tmpdir
         Directory used for building a module.
 
+--overlay
+        Install in this overlay. Defaults to '${PMODULES_ROOT}'.
 "
 	exit 1
 }
@@ -126,6 +128,7 @@ declare         opt_all_variants='no'
 declare         opt_bootstrap='no'
 # array collecting all modules specified on the command line via '--with=module'
 declare -a      opt_with_modules=()
+declare         overlay=''
 declare 	build_config='modbuild.conf'
 declare         system="$(uname -s)"
 
@@ -225,6 +228,12 @@ parse_args() {
 		--update-modulefiles )
 			pbuild.update_modulefiles 'yes'
 			;;
+                --overlay )
+                        overlay=$2
+                        ;;
+                --overlay=* )
+                        overlay=${1*=}
+                        ;;
 		-* )
 			std::die 1 "Invalid option -- '$1'"
 			;;
@@ -379,6 +388,7 @@ source "${build_config}" || \
 source libpbuild.bash    || \
         std::die 3 "Oops: Cannot source library -- '$_'"
 
+[[ -z "${overlay}" ]] && overlay=${PMODULES_ROOT}
 
 declare -r BUILD_SCRIPT
 declare -r BUILDBLOCK_DIR