diff --git a/mysql-test/lib/My/Find.pm b/mysql-test/lib/My/Find.pm
index 8b90e757917..8557584bbc8 100644
--- a/mysql-test/lib/My/Find.pm
+++ b/mysql-test/lib/My/Find.pm
@@ -26,7 +26,7 @@ use Carp;
 use My::Platform;
 
 use base qw(Exporter);
-our @EXPORT= qw(my_find_bin my_find_dir NOT_REQUIRED);
+our @EXPORT= qw(my_find_bin my_find_dir my_find_file NOT_REQUIRED);
 
 our $vs_config_dir;
 
@@ -77,6 +77,40 @@ sub my_find_bin {
 }
 
 
+#
+# my_find_file - find a file with "name_1...name_n" in
+# paths "path_1...path_n" and return the full path
+#
+# Example:
+#    my $mysqld_exe= my_find_file($basedir.
+#                                ["sql", "bin"],
+#                                "filename");
+#
+#
+# Also supports NOT_REQUIRED flag
+#
+# NOTE: The function honours MTR_VS_CONFIG environment variable
+#
+#
+sub my_find_file {
+  my ($base, $paths, $names, $required)= @_;
+  croak "usage: my_find_file(<base>, <paths>, <names>, [<required>])"
+    unless @_ == 4 or @_ == 3;
+
+  # -------------------------------------------------------
+  # Find and return the first executable
+  # -------------------------------------------------------
+  foreach my $path (my_find_paths($base, $paths, $names, $bin_extension)) {
+    return $path if ( -f $path );
+  }
+  if (defined $required and $required == NOT_REQUIRED){
+    # Return empty string to indicate not found
+    return "";
+  }
+  find_error($base, $paths, $names);
+}
+
+
 #
 # my_find_dir - find the first existing directory in one of
 # the given paths
diff --git a/mysql-test/mysql-test-run.pl b/mysql-test/mysql-test-run.pl
index 53f916a630a..1eb767ee47f 100755
--- a/mysql-test/mysql-test-run.pl
+++ b/mysql-test/mysql-test-run.pl
@@ -188,8 +188,6 @@ my $exe_ndbd;
 my $exe_ndb_mgmd;
 my $exe_ndb_waiter;
 
-our $path_sql_dir;
-
 our $debug_compiled_binaries;
 
 our %mysqld_variables;
@@ -651,7 +649,6 @@ sub run_worker ($) {
 
   setup_vardir();
   check_running_as_root();
-  mysql_install_db($thread_num);
 
   if ( using_extern() ) {
     create_config_file_for_extern(%opts_extern);
@@ -894,21 +891,10 @@ sub command_line_setup {
 				       "$basedir/sql/share",
 				       "$basedir/share");
 
+  
   $path_language=      mtr_path_exists("$path_share/english");
   $path_charsetsdir=   mtr_path_exists("$path_share/charsets");
 
-  # Look for SQL scripts directory
-  if ( mtr_file_exists("$path_share/mysql_system_tables.sql") ne "")
-  {
-    # The SQL scripts are in path_share
-    $path_sql_dir= $path_share;
-  }
-  else
-  {
-    $path_sql_dir= mtr_path_exists("$basedir/share",
-				   "$basedir/scripts");
-  }
-
   if (using_extern())
   {
     # Connect to the running mysqld and find out what it supports
@@ -2419,7 +2405,7 @@ sub initialize_servers {
       remove_stale_vardir();
       setup_vardir();
 
-      mysql_install_db(0);
+      mysql_install_db(default_mysqld(), "$opt_vardir/install.db");
     }
   }
 }
@@ -2474,9 +2460,33 @@ sub sql_to_bootstrap {
 }
 
 
+sub default_mysqld {
+  # Generate new config file from template
+  my $config= My::ConfigFactory->new_config
+    ( {
+       basedir         => $basedir,
+       template_path   => "include/default_my.cnf",
+       vardir          => $opt_vardir,
+       tmpdir          => $opt_tmpdir,
+       baseport        => 0,
+       user            => $opt_user,
+       password        => '',
+      }
+    );
+
+  my $mysqld= $config->group('mysqld.1')
+    or mtr_error("Couldn't find mysqld.1 in default config");
+  return $mysqld;
+}
+
+
 sub mysql_install_db {
-  my ($thread_num)= @_;
-  my $data_dir= "$opt_vardir/install.db";
+  my ($mysqld, $datadir)= @_;
+
+  my $install_datadir= $datadir || $mysqld->value('datadir');
+  my $install_basedir= $mysqld->value('basedir');
+  my $install_lang= $mysqld->value('language');
+  my $install_chsdir= $mysqld->value('character-sets-dir');
 
   mtr_report("Installing system database...");
 
@@ -2484,8 +2494,8 @@ sub mysql_install_db {
   mtr_init_args(\$args);
   mtr_add_arg($args, "--no-defaults");
   mtr_add_arg($args, "--bootstrap");
-  mtr_add_arg($args, "--basedir=%s", $basedir);
-  mtr_add_arg($args, "--datadir=%s", $data_dir);
+  mtr_add_arg($args, "--basedir=%s", $install_basedir);
+  mtr_add_arg($args, "--datadir=%s", $install_datadir);
   mtr_add_arg($args, "--loose-skip-innodb");
   mtr_add_arg($args, "--loose-skip-ndbcluster");
   mtr_add_arg($args, "--tmpdir=%s", "$opt_vardir/tmp/");
@@ -2497,47 +2507,60 @@ sub mysql_install_db {
 		$path_vardir_trace);
   }
 
-  mtr_add_arg($args, "--language=%s", $path_language);
-  mtr_add_arg($args, "--character-sets-dir=%s", $path_charsetsdir);
+  mtr_add_arg($args, "--language=%s", $install_lang);
+  mtr_add_arg($args, "--character-sets-dir=%s", $install_chsdir);
 
   # If DISABLE_GRANT_OPTIONS is defined when the server is compiled (e.g.,
   # configure --disable-grant-options), mysqld will not recognize the
   # --bootstrap or --skip-grant-tables options.  The user can set
   # MYSQLD_BOOTSTRAP to the full path to a mysqld which does accept
   # --bootstrap, to accommodate this.
-  my $exe_mysqld_bootstrap = $ENV{'MYSQLD_BOOTSTRAP'} || find_mysqld($basedir);
+  my $exe_mysqld_bootstrap =
+    $ENV{'MYSQLD_BOOTSTRAP'} || find_mysqld($install_basedir);
 
   # ----------------------------------------------------------------------
   # export MYSQLD_BOOTSTRAP_CMD variable containing <path>/mysqld <args>
   # ----------------------------------------------------------------------
   $ENV{'MYSQLD_BOOTSTRAP_CMD'}= "$exe_mysqld_bootstrap " . join(" ", @$args);
 
-  return if $thread_num > 0; # Only generate MYSQLD_BOOTSTRAP_CMD in workers
+
 
   # ----------------------------------------------------------------------
   # Create the bootstrap.sql file
   # ----------------------------------------------------------------------
   my $bootstrap_sql_file= "$opt_vardir/tmp/bootstrap.sql";
 
-  if (-f "$path_sql_dir/mysql_system_tables.sql")
+  my $path_sql= my_find_file($install_basedir,
+			     ["mysql", "sql/share", "share", "scripts"],
+			     "mysql_system_tables.sql",
+			     NOT_REQUIRED);
+
+  if (-f $path_sql )
   {
+    my $sql_dir= dirname($path_sql);
     # Use the mysql database for system tables
     mtr_tofile($bootstrap_sql_file, "use mysql\n");
 
     # Add the offical mysql system tables
     # for a production system
-    mtr_appendfile_to_file("$path_sql_dir/mysql_system_tables.sql",
+    mtr_appendfile_to_file("$sql_dir/mysql_system_tables.sql",
 			   $bootstrap_sql_file);
 
     # Add the mysql system tables initial data
     # for a production system
-    mtr_appendfile_to_file("$path_sql_dir/mysql_system_tables_data.sql",
+    mtr_appendfile_to_file("$sql_dir/mysql_system_tables_data.sql",
 			   $bootstrap_sql_file);
 
     # Add test data for timezone - this is just a subset, on a real
     # system these tables will be populated either by mysql_tzinfo_to_sql
     # or by downloading the timezone table package from our website
-    mtr_appendfile_to_file("$path_sql_dir/mysql_test_data_timezone.sql",
+    mtr_appendfile_to_file("$sql_dir/mysql_test_data_timezone.sql",
+			   $bootstrap_sql_file);
+
+    # Fill help tables, just an empty file when running from bk repo
+    # but will be replaced by a real fill_help_tables.sql when
+    # building the source dist
+    mtr_appendfile_to_file("$sql_dir/fill_help_tables.sql",
 			   $bootstrap_sql_file);
 
   }
@@ -2545,7 +2568,7 @@ sub mysql_install_db {
   {
     # Install db from init_db.sql that exist in early 5.1 and 5.0
     # versions of MySQL
-    my $init_file= "$basedir/mysql-test/lib/init_db.sql";
+    my $init_file= "$install_basedir/mysql-test/lib/init_db.sql";
     mtr_report(" - from '$init_file'");
     my $text= mtr_grab_file($init_file) or
       mtr_error("Can't open '$init_file': $!");
@@ -2554,12 +2577,6 @@ sub mysql_install_db {
 	       sql_to_bootstrap($text));
   }
 
-  # Fill help tables, just an empty file when running from bk repo
-  # but will be replaced by a real fill_help_tables.sql when
-  # building the source dist
-  mtr_appendfile_to_file("$path_sql_dir/fill_help_tables.sql",
-			 $bootstrap_sql_file);
-
   # Remove anonymous users
   mtr_tofile($bootstrap_sql_file,
 	     "DELETE FROM mysql.user where user= '';\n");
@@ -2582,8 +2599,8 @@ sub mysql_install_db {
 	     "$exe_mysqld_bootstrap " . join(" ", @$args) . "\n");
 
   # Create directories mysql and test
-  mkpath("$data_dir/mysql");
-  mkpath("$data_dir/test");
+  mkpath("$install_datadir/mysql");
+  mkpath("$install_datadir/test");
 
   if ( My::SafeProcess->run
        (
@@ -4087,14 +4104,26 @@ sub start_servers($) {
       }
     }
 
-    # Copy datadir from installed system db
-    for my $path ( "$opt_vardir", "$opt_vardir/..") {
-      my $install_db= "$path/install.db";
-      copytree($install_db, $datadir)
-	if -d $install_db;
+    my $mysqld_basedir= $mysqld->value('basedir');
+    if ( $basedir eq $mysqld_basedir )
+    {
+      # Copy datadir from installed system db
+      for my $path ( "$opt_vardir", "$opt_vardir/..") {
+	my $install_db= "$path/install.db";
+	copytree($install_db, $datadir)
+	  if -d $install_db;
+      }
+      mtr_error("Failed to copy system db to '$datadir'")
+	unless -d $datadir;
+    }
+    else
+    {
+      mysql_install_db($mysqld);
+
+      mtr_error("Failed to install system db to '$datadir'")
+	unless -d $datadir;
+
     }
-    mtr_error("Failed to copy system db to '$datadir'")
-      unless -d $datadir;
 
     # Create the servers tmpdir
     my $tmpdir= $mysqld->value('tmpdir');