diff --git a/envsetup.sh b/envsetup.sh
index 1eb66d721b..05167df341 100644
--- a/envsetup.sh
+++ b/envsetup.sh
@@ -529,6 +529,13 @@ function _lunch_meat()
     # Note this is the string "release", not the value of the variable.
     export TARGET_BUILD_TYPE=release
 
+    local prebuilt_kernel=$(get_build_var TARGET_PREBUILT_KERNEL)
+    if [ -z "$prebuilt_kernel" ]; then
+      export INLINE_KERNEL_BUILDING=true
+    else
+      unset INLINE_KERNEL_BUILDING
+    fi
+
     [[ -n "${ANDROID_QUIET_BUILD:-}" ]] || echo
 
     set_stuff_for_environment