diff --git a/pkgs/applications/version-management/mercurial/default.nix b/pkgs/applications/version-management/mercurial/default.nix
index 486bebc2531..afbfc1c8935 100644
--- a/pkgs/applications/version-management/mercurial/default.nix
+++ b/pkgs/applications/version-management/mercurial/default.nix
@@ -1,4 +1,4 @@
-{ stdenv, fetchurl, python, makeWrapper, docutils, unzip
+{ stdenv, fetchurl, python, makeWrapper, docutils, setuptools, unzip
 , guiSupport ? false, tk ? null, curses }:
 
 let
@@ -15,9 +15,7 @@ stdenv.mkDerivation {
   inherit python; # pass it so that the same version can be used in hg2git
   pythonPackages = [ curses ];
 
-  buildInputs = [ python makeWrapper docutils unzip ];
-
-  PYTHONPATH = "${python}/lib/python2.6/site-packages:${python}/lib/python2.7/site-packages:${docutils}/lib/python2.5/site-packages:${docutils}/lib/python2.6/site-packages:${docutils}/lib/python2.7/site-packages";
+  buildInputs = [ python makeWrapper docutils setuptools unzip ];
 
   makeFlags = "PREFIX=$(out)";