diff --git a/CMakeLists.txt b/CMakeLists.txt
index d69aae2c1f..c271a2fbb7 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -90,17 +90,6 @@ set( CMAKE_INSTALL_DATADIR "share/${PROJECT_NAME}" CACHE STRING "Relative direct
 
 include( GNUInstallDirs )
 
-################################################################################
-#################        Do not install into /usr/local        #################
-################################################################################
-
-get_filename_component(CMAKE_INSTALL_PREFIX ${CMAKE_INSTALL_PREFIX} REALPATH BASE_DIR "${CMAKE_BINARY_DIR}")
-# If CMAKE_INSTALL_PREFIX is omitted CMake will set the installation prefix to its default '/usr/local'.
-# This is not desired. A subdirectory is allowed, e.g. 'usr/local/nest'.
-if ( "${CMAKE_INSTALL_PREFIX}" STREQUAL "/usr/local" )
-  message( FATAL_ERROR "Do not install into '${CMAKE_INSTALL_PREFIX}'. Please set -DCMAKE_INSTALL_PREFIX:PATH=<install prefix>." )
-endif ()
-
 ################################################################################
 ##################           Find utility programs            ##################
 ################################################################################
diff --git a/cmake/ConfigureSummary.cmake b/cmake/ConfigureSummary.cmake
index af9aa99df8..93d2cc197a 100644
--- a/cmake/ConfigureSummary.cmake
+++ b/cmake/ConfigureSummary.cmake
@@ -188,6 +188,9 @@ function( NEST_PRINT_CONFIG_SUMMARY )
   message( "The NEST executable will be installed to:" )
   message( "  ${CMAKE_INSTALL_FULL_BINDIR}/" )
   message( "" )
+  message( "NEST dynamic libraries and user modules will be installed to:" )
+  message( "  ${CMAKE_INSTALL_FULL_LIBDIR}/nest/" )
+  message( "" )
   message( "Documentation and examples will be installed to:" )
   message( "  ${CMAKE_INSTALL_FULL_DOCDIR}/" )
   message( "" )
diff --git a/cmake/ProcessOptions.cmake b/cmake/ProcessOptions.cmake
index 096f108cd5..2c7bb3a892 100644
--- a/cmake/ProcessOptions.cmake
+++ b/cmake/ProcessOptions.cmake
@@ -216,18 +216,14 @@ function( NEST_PROCESS_STATIC_LIBRARIES )
     # set the rpath only when installed
     if ( APPLE )
       set( CMAKE_INSTALL_RPATH
-          "@loader_path/../${CMAKE_INSTALL_LIBDIR}"
           "@loader_path/../${CMAKE_INSTALL_LIBDIR}/nest"
-          # for pynestkernel: @loader_path at <prefix>/lib/python2.7/site-packages/nest
-          "@loader_path/../../.."
+          # for pynestkernel: @loader_path at <prefix>/lib/python3.x/site-packages/nest
           "@loader_path/../../../nest"
           PARENT_SCOPE )
     else ()
       set( CMAKE_INSTALL_RPATH
-          "\$ORIGIN/../${CMAKE_INSTALL_LIBDIR}"
           "\$ORIGIN/../${CMAKE_INSTALL_LIBDIR}/nest"
-          # for pynestkernel: origin at <prefix>/lib/python2.7/site-packages/nest
-          "\$ORIGIN/../../.."
+          # for pynestkernel: origin at <prefix>/lib/python3.x/site-packages/nest
           "\$ORIGIN/../../../nest"
           PARENT_SCOPE )
     endif ()
diff --git a/conngen/CMakeLists.txt b/conngen/CMakeLists.txt
index 590446b77e..dd2b2bc16b 100644
--- a/conngen/CMakeLists.txt
+++ b/conngen/CMakeLists.txt
@@ -35,8 +35,8 @@ target_include_directories( conngen PRIVATE
     )
 
 install( TARGETS conngen
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/doc/installation/linux_install.rst b/doc/installation/linux_install.rst
index c1021a50c7..38807cd3c4 100644
--- a/doc/installation/linux_install.rst
+++ b/doc/installation/linux_install.rst
@@ -111,7 +111,7 @@ What gets installed where
 By default, everything will be installed to the subdirectories ``/install/path/{bin,lib,share}``, where ``/install/path`` is the install path given to ``cmake``:
 
 - Executables ``/install/path/bin``
-- Dynamic libraries ``/install/path/lib/``
+- Dynamic libraries ``/install/path/lib/nest``
 - SLI libraries ``/install/path/share/nest/sli``
 - Documentation ``/install/path/share/doc/nest``
 - Examples ``/install/path/share/doc/nest/examples``
diff --git a/examples/MyModule/CMakeLists.txt b/examples/MyModule/CMakeLists.txt
index 669faee0c9..a81fc69e3b 100644
--- a/examples/MyModule/CMakeLists.txt
+++ b/examples/MyModule/CMakeLists.txt
@@ -214,13 +214,11 @@ execute_process(
 # on OS X
 set( CMAKE_MACOSX_RPATH ON )
 
-# Use the NEST_INSTALL_* variables as CMAKE_INSTALL_*, if not set explicitly.
-if ( "${CMAKE_INSTALL_PREFIX}" STREQUAL "/usr/local" )
-  set( CMAKE_INSTALL_PREFIX "${NEST_INSTALL_PREFIX}" CACHE STRING "Install path prefix, prepended onto install directories." FORCE )
-  set( CMAKE_INSTALL_LIBDIR "${NEST_LIBDIR}/nest" CACHE STRING "object code libraries (lib/nest or lib64/nest or lib/<multiarch-tuple>/nest on Debian)" FORCE )
-  set( CMAKE_INSTALL_DOCDIR "${NEST_INSTALL_DOCDIR}" CACHE STRING "documentation root (DATAROOTDIR/doc/nest)" FORCE )
-  set( CMAKE_INSTALL_DATADIR "${NEST_INSTALL_DATADIR}" CACHE STRING "read-only architecture-independent data (DATAROOTDIR/nest)" FORCE )
-endif ()
+# Use the NEST_INSTALL_* variables as CMAKE_INSTALL_*
+set( CMAKE_INSTALL_PREFIX "${NEST_INSTALL_PREFIX}" CACHE STRING "Install path prefix, prepended onto install directories." FORCE )
+set( CMAKE_INSTALL_LIBDIR "${NEST_LIBDIR}" CACHE STRING "object code libraries (lib/nest or lib64/nest or lib/<multiarch-tuple>/nest on Debian)" FORCE )
+set( CMAKE_INSTALL_DOCDIR "${NEST_INSTALL_DOCDIR}" CACHE STRING "documentation root (DATAROOTDIR/doc/nest)" FORCE )
+set( CMAKE_INSTALL_DATADIR "${NEST_INSTALL_DATADIR}" CACHE STRING "read-only architecture-independent data (DATAROOTDIR/nest)" FORCE )
 
 include( GNUInstallDirs )
 
@@ -285,7 +283,7 @@ if ( BUILD_SHARED_LIBS )
       PREFIX ""
       OUTPUT_NAME ${MODULE_NAME} )
   install( TARGETS ${MODULE_NAME}_module
-      DESTINATION ${CMAKE_INSTALL_LIBDIR}
+      DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
       )
 endif ()
 
@@ -303,7 +301,7 @@ set_target_properties( ${MODULE_NAME}_lib
     OUTPUT_NAME ${MODULE_NAME} )
 
 # Install library, header and sli init files.
-install( TARGETS ${MODULE_NAME}_lib DESTINATION ${CMAKE_INSTALL_LIBDIR} )
+install( TARGETS ${MODULE_NAME}_lib DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest )
 install( FILES ${MODULE_HEADER} DESTINATION ${CMAKE_INSTALL_INCLUDEDIR}/${MODULE_NAME} )
 install( DIRECTORY sli DESTINATION ${CMAKE_INSTALL_DATADIR} )
 
@@ -364,7 +362,7 @@ message( "  make" )
 message( "  make install" )
 message( "" )
 message( "The library file lib${MODULE_NAME}.so will be installed to" )
-message( "  ${CMAKE_INSTALL_FULL_LIBDIR}" )
+message( "  ${CMAKE_INSTALL_FULL_LIBDIR}/nest/" )
 message( "Help files will be installed to" )
 message( "  ${CMAKE_INSTALL_PREFIX}/${CMAKE_INSTALL_DOCDIR}" )
 message( "" )
@@ -373,10 +371,11 @@ message( "  (${MODULE_NAME}) Install        (in SLI)" )
 message( "  nest.Install('${MODULE_NAME}')  (in PyNEST)" )
 message( "" )
 
-if( NOT "${CMAKE_INSTALL_PREFIX}" EQUAL "${NEST_INSTALL_PREFIX}" )
+if( NOT "${CMAKE_INSTALL_PREFIX}" STREQUAL "${NEST_INSTALL_PREFIX}" )
   message( "The module will be installed into a non-default location!" )
   message( "Make sure to set the environment variables:" )
-  message( "  export NEST_MODULE_PATH=${CMAKE_INSTALL_FULL_LIBDIR}:$NEST_MODULE_PATH" )
+  message( "  export LD_LIBRARY_PATH=${CMAKE_INSTALL_FULL_LIBDIR}/nest:$LD_LIBRARY_PATH" )
+  message( "Note that on the Mac, the variable LD_LIBRARY_PATH is called DYLD_LIBRARY_PATH." )
   message( "  export SLI_PATH=${CMAKE_INSTALL_FULL_DATADIR}/sli:$SLI_PATH" )
   message( "" )
 endif ()
diff --git a/extras/nest-config.in b/extras/nest-config.in
index b124e24571..77d28903d7 100755
--- a/extras/nest-config.in
+++ b/extras/nest-config.in
@@ -66,7 +66,7 @@ while test $# -gt 0; do
         echo "@ALL_CXXFLAGS@"
         ;;
     --libs)
-        echo "-L$prefix/@CMAKE_INSTALL_LIBDIR@ @ALL_LIBS@"
+        echo "-L$prefix/@CMAKE_INSTALL_LIBDIR@/nest @ALL_LIBS@"
         ;;
     --compiler)
         echo "@CMAKE_CXX_COMPILER@"
diff --git a/extras/nest_vars.sh.in b/extras/nest_vars.sh.in
index ccc999c9a8..cebe41a422 100644
--- a/extras/nest_vars.sh.in
+++ b/extras/nest_vars.sh.in
@@ -9,14 +9,18 @@ export NEST_DATA_DIR="${NEST_INSTALL_DIR}/@CMAKE_INSTALL_DATADIR@"
 # NEST finds help files $NEST_DOC_DIR/help
 export NEST_DOC_DIR="${NEST_INSTALL_DIR}/@CMAKE_INSTALL_DOCDIR@"
 
-# The path where NEST looks for user modules.
-export NEST_MODULE_PATH="${NEST_INSTALL_DIR}/@CMAKE_INSTALL_LIBDIR@/nest"
+# The path in which NEST dynamic libraries are found. Works also if $(DY)LD_LIBRARY_PATH is undefined.
+if [[ "$OSTYPE" == "darwin"* ]]; then
+    export DYLD_LIBRARY_PATH="$NEST_INSTALL_DIR/@CMAKE_INSTALL_LIBDIR@/nest"${DYLD_LIBRARY_PATH:+:$DYLD_LIBRARY_PATH}
+else
+    export LD_LIBRARY_PATH="$NEST_INSTALL_DIR/@CMAKE_INSTALL_LIBDIR@/nest"${LD_LIBRARY_PATH:+:$LD_LIBRARY_PATH}
+fi
 
 # The path where the PyNEST bindings are installed.
 export NEST_PYTHON_PREFIX="${NEST_INSTALL_DIR}/@PYEXECDIR@"
 
-# Prepend NEST to PYTHONPATH in a safe way even if PYTHONPATH is undefined
-export PYTHONPATH="${NEST_PYTHON_PREFIX}${PYTHONPATH:+:$PYTHONPATH}"
+# Prepend NEST to PYTHONPATH. Works also if $PYTHONPATH is undefined.
+export PYTHONPATH="$NEST_PYTHON_PREFIX${PYTHONPATH:+:$PYTHONPATH}"
 
-# Make nest / sli /... executables visible.
+# Make nest/sli/... executables visible.
 export PATH="${NEST_INSTALL_DIR}/bin:${PATH}"
diff --git a/extras/travis_build.sh b/extras/travis_build.sh
index e9d4782015..4e1e479f88 100755
--- a/extras/travis_build.sh
+++ b/extras/travis_build.sh
@@ -193,7 +193,7 @@ if [ "$xSTATIC_ANALYSIS" = "1" ]; then
     # Set the command line arguments for the static code analysis script and execute it.
 
     # The names of the static code analysis tools executables.
-    VERA=vera++                   
+    VERA=vera++
     CPPCHECK=cppcheck
     CLANG_FORMAT=clang-format
     PEP8=pep8
@@ -275,6 +275,8 @@ echo "MSGBLD0270: Running make install."
 make install
 echo "MSGBLD0280: Make install completed."
 
+source $NEST_RESULT/bin/nest_vars.sh
+
     echo
     echo "+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +"
     echo "+               R U N   N E S T   T E S T S U I T E                           +"
diff --git a/libnestutil/CMakeLists.txt b/libnestutil/CMakeLists.txt
index c02d7c6cb4..f4a379cdea 100644
--- a/libnestutil/CMakeLists.txt
+++ b/libnestutil/CMakeLists.txt
@@ -43,8 +43,8 @@ target_include_directories( nestutil PRIVATE
     )
 
 install( TARGETS nestutil
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/librandom/CMakeLists.txt b/librandom/CMakeLists.txt
index 3c42cc20e2..8391c906f2 100644
--- a/librandom/CMakeLists.txt
+++ b/librandom/CMakeLists.txt
@@ -59,8 +59,8 @@ target_include_directories( randomtest PRIVATE
     )
 
 install( TARGETS random
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/models/CMakeLists.txt b/models/CMakeLists.txt
index fe9c216642..58dc95ead0 100644
--- a/models/CMakeLists.txt
+++ b/models/CMakeLists.txt
@@ -142,8 +142,8 @@ target_include_directories( models PRIVATE
     )
 
 install( TARGETS models
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/nest/CMakeLists.txt b/nest/CMakeLists.txt
index 189381c28e..a86b3757a9 100644
--- a/nest/CMakeLists.txt
+++ b/nest/CMakeLists.txt
@@ -95,8 +95,8 @@ if ( HAVE_PYTHON )
 endif ()
 
 install( TARGETS nest nest_lib
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/nestkernel/CMakeLists.txt b/nestkernel/CMakeLists.txt
index 3277b4f777..9debe72b33 100644
--- a/nestkernel/CMakeLists.txt
+++ b/nestkernel/CMakeLists.txt
@@ -130,8 +130,8 @@ target_include_directories( nestkernel PRIVATE
     )
 
 install( TARGETS nestkernel
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/nestkernel/dynamicloader.cpp b/nestkernel/dynamicloader.cpp
index a22fb7f91e..8f6c66854f 100644
--- a/nestkernel/dynamicloader.cpp
+++ b/nestkernel/dynamicloader.cpp
@@ -272,24 +272,9 @@ DynamicLoaderModule::init( SLIInterpreter* i )
 
   int dl_error = lt_dlinit();
 
-  if ( not dl_error )
+  if ( dl_error )
   {
-    const char* path = getenv( "NEST_MODULE_PATH" );
-    if ( path != NULL )
-    {
-      LOG( M_DEBUG, "DynamicLoaderModule::init", "Setting module path to" );
-      LOG( M_DEBUG, "DynamicLoaderModule::init", path );
-
-      dl_error = lt_dlsetsearchpath( path );
-      if ( dl_error )
-      {
-        LOG( M_ERROR, "DynamicLoaderModule::init", "Could not set dynamic module path." );
-      }
-    }
-  }
-  else
-  {
-    LOG( M_ERROR, "DynamicLoaderModule::init", "Could not initialize libltdl. No dynamic modules will be avaiable." );
+    LOG( M_ERROR, "DynamicLoaderModule::init", "Could not initialize libltdl. No dynamic modules will be available." );
   }
 }
 
diff --git a/precise/CMakeLists.txt b/precise/CMakeLists.txt
index 0604323df4..aa950abc54 100644
--- a/precise/CMakeLists.txt
+++ b/precise/CMakeLists.txt
@@ -44,8 +44,8 @@ target_include_directories( precise PRIVATE
     )
 
 install( TARGETS precise
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/sli/CMakeLists.txt b/sli/CMakeLists.txt
index 944f7937a1..6be87ceeaa 100644
--- a/sli/CMakeLists.txt
+++ b/sli/CMakeLists.txt
@@ -117,8 +117,8 @@ target_include_directories( sli_readline PRIVATE
     )
 
 install( TARGETS sli_readline sli_lib sli
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )
 
diff --git a/topology/CMakeLists.txt b/topology/CMakeLists.txt
index 69b56159b0..bd0105377b 100644
--- a/topology/CMakeLists.txt
+++ b/topology/CMakeLists.txt
@@ -54,8 +54,8 @@ target_include_directories( topology PRIVATE
     )
 
 install( TARGETS topology
-    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}
-    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}
+    LIBRARY DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
+    ARCHIVE DESTINATION ${CMAKE_INSTALL_LIBDIR}/nest
     RUNTIME DESTINATION ${CMAKE_INSTALL_BINDIR}
     )