diff --git a/cabal-install/Distribution/Client/Sandbox.hs b/cabal-install/Distribution/Client/Sandbox.hs
index 7c460d43f18a45d08d368a5ce0b9c945c56184e5..5a7d45a61cfd1e990918c2e1d9ad754c12bb8273 100644
--- a/cabal-install/Distribution/Client/Sandbox.hs
+++ b/cabal-install/Distribution/Client/Sandbox.hs
@@ -440,8 +440,10 @@ reinstallAddSourceDeps :: Verbosity
                           -> InstallFlags -> GlobalFlags
                           -> FilePath
                           -> IO WereDepsReinstalled
-reinstallAddSourceDeps verbosity config configFlags configExFlags
+reinstallAddSourceDeps verbosity config configFlags' configExFlags
                        installFlags globalFlags sandboxDir = do
+  let configFlags       = configFlags'
+                          { configDistPref = Flag "sandbox-dist" }
   indexFile            <- tryGetIndexFilePath config
   buildTreeRefs        <- Index.listBuildTreeRefs verbosity
                           Index.DontListIgnored indexFile
diff --git a/cabal-install/Main.hs b/cabal-install/Main.hs
index 6d1a860ce30581dc703fd4ecb625b30e511c9ec4..79a2d1b6290f9e39972570188db6f0944510a61f 100644
--- a/cabal-install/Main.hs
+++ b/cabal-install/Main.hs
@@ -75,7 +75,7 @@ import Distribution.Client.Sandbox            (sandboxInit
                                               ,dumpPackageEnvironment
 
                                               ,UseSandbox(..)
-                                              ,whenUsingSandbox
+                                              ,isUseSandbox, whenUsingSandbox
                                               ,ForceGlobalInstall(..)
                                               ,maybeForceGlobalInstall
                                               ,loadConfigOrSandboxConfig
@@ -458,7 +458,12 @@ installAction (configFlags, configExFlags, installFlags, haddockFlags)
                           (configUserInstall configFlags)
   targets <- readUserTargets verbosity extraArgs
 
-  let configFlags'   = savedConfigureFlags   config `mappend` configFlags
+  let configFlags'   =
+        let flags    = savedConfigureFlags   config `mappend` configFlags
+        in if isUseSandbox useSandbox
+           then flags {configDistPref = Flag "sandbox-dist"}
+           else flags
+
       configExFlags' = defaultConfigExFlags         `mappend`
                        savedConfigureExFlags config `mappend` configExFlags
       installFlags'  = defaultInstallFlags          `mappend`