diff --git a/README b/README
index 662c422..54de29e 100644
--- a/README
+++ b/README
@@ -18,7 +18,13 @@ successful.
 Build
 =====
 
-To build,
+To build static library libbpf.a:
   cd src
   make
-and it will build libbpf.a library
+
+To build both static libbpf.a and shared libbpf.so libraries in directory
+build/ and install them together with libbpf headers in a staging directory
+root/:
+  cd src
+  mkdir build root
+  BUILD_SHARED=y OBJDIR=build DESTDIR=root make install
diff --git a/src/Makefile b/src/Makefile
index 9d4fa44..25ebb06 100644
--- a/src/Makefile
+++ b/src/Makefile
@@ -1,23 +1,78 @@
 # SPDX-License-Identifier: (LGPL-2.1 OR BSD-2-Clause)
 
 TOPDIR = ..
-INCLUDES = -I. -I$(TOPDIR)/include -I$(TOPDIR)/include/uapi
-CFLAGS = $(INCLUDES) -O2 -Werror -Wall
+
+INCLUDES := -I. -I$(TOPDIR)/include -I$(TOPDIR)/include/uapi
+ALL_CFLAGS := $(INCLUDES)
 
 FEATURE_REALLOCARRAY := $(shell $(TOPDIR)/scripts/check-reallocarray.sh)
 ifneq ($(FEATURE_REALLOCARRAY),)
-  CFLAGS += -DCOMPAT_NEED_REALLOCARRAY
+	ALL_CFLAGS += -DCOMPAT_NEED_REALLOCARRAY
 endif
 
-OBJFILES = bpf.o btf.o libbpf.o libbpf_errno.o netlink.o nlattr.o str_error.o
+ifdef BUILD_SHARED
+	ALL_CFLAGS += -fPIC
+endif
 
-all: libbpf.a
+CFLAGS ?= -g -O2 -Werror -Wall
+ALL_CFLAGS += $(CFLAGS)
 
-libbpf.a: $(OBJFILES)
-	/bin/rm -f $@; /bin/ar rcs $@ $^
+OBJDIR ?= .
 
-%.o: %.c
-	gcc $(CFLAGS) -c $< -o $@
+OBJS := $(addprefix $(OBJDIR)/,bpf.o btf.o libbpf.o libbpf_errno.o netlink.o \
+	nlattr.o str_error.o)
+
+LIBS := $(OBJDIR)/libbpf.a
+ifdef BUILD_SHARED
+	LIBS += $(OBJDIR)/libbpf.so
+endif
+
+HEADERS := bpf.h libbpf.h btf.h
+UAPI_HEADERS := $(addprefix $(TOPDIR)/include/uapi/linux/,bpf.h btf.h)
+
+INSTALL = install
+
+DESTDIR ?=
+
+ifeq ($(shell uname -m),x86_64)
+	LIBSUBDIR := lib64
+else
+	LIBSUBDIR := lib
+endif
+
+PREFIX ?= /usr
+LIBDIR ?= $(PREFIX)/$(LIBSUBDIR)
+INCLUDEDIR ?= $(PREFIX)/include
+UAPIDIR ?= $(PREFIX)/include
+
+all: $(LIBS)
+
+$(OBJDIR)/libbpf.a: $(OBJS)
+	$(AR) rcs $@ $^
+
+$(OBJDIR)/libbpf.so: $(OBJS)
+	$(CC) -shared $(LDFLAGS) $^ -o $@
+
+$(OBJDIR)/%.o: %.c
+	$(CC) $(ALL_CFLAGS) -c $< -o $@
+
+define do_install
+	if [ ! -d '$(DESTDIR)$2' ]; then		\
+		$(INSTALL) -d -m 755 '$(DESTDIR)$2';	\
+	fi;						\
+	$(INSTALL) $1 $(if $3,-m $3,) '$(DESTDIR)$2'
+endef
+
+install: all install_headers
+	$(call do_install,$(LIBS),$(LIBDIR))
+
+install_headers:
+	$(call do_install,$(HEADERS),$(INCLUDEDIR)/bpf,644)
+
+# UAPI headers can be installed by a different package so they're not installed
+# in by install rule.
+install_uapi_headers:
+	$(call do_install,$(UAPI_HEADERS),$(UAPIDIR)/linux,644)
 
 clean:
-	/bin/rm -f libbpf.a $(OBJFILES)
+	rm -f *.o *.a *.so