diff --git a/src/bin.ml b/src/bin.ml
index 7c6afa3c..7b1d5adc 100644
--- a/src/bin.ml
+++ b/src/bin.ml
@@ -5,25 +5,14 @@ let path_sep =
     ';'
   else
     ':'
-;;
 
-let parse_path s =
-  let rec loop i j =
-    if j = String.length s then
-      [Path.absolute (String.sub s ~pos:i ~len:(j - i))]
-    else if s.[j] = path_sep then
-      Path.absolute (String.sub s ~pos:i ~len:(j - i)) :: loop (j + 1) (j + 1)
-    else
-      loop i (j + 1)
-  in
-  loop 0 0
-;;
+let parse_path ?(sep=path_sep) s =
+  List.map (String.split s ~on:sep) ~f:Path.absolute
 
 let path =
   match Sys.getenv "PATH" with
   | exception Not_found -> []
   | s -> parse_path s
-;;
 
 let exe = if Sys.win32 then ".exe" else ""
 
diff --git a/src/bin.mli b/src/bin.mli
index 7559442a..18ab90d5 100644
--- a/src/bin.mli
+++ b/src/bin.mli
@@ -7,7 +7,8 @@ val path_sep : char
 (** Contents of [PATH] *)
 val path : Path.t list
 
-val parse_path : string -> Path.t list
+(** Parse a [PATH] like variable *)
+val parse_path : ?sep:char -> string -> Path.t list
 
 (** The opam tool *)
 val opam : Path.t option
diff --git a/src/context.ml b/src/context.ml
index 60d373ad..22cb0caf 100644
--- a/src/context.ml
+++ b/src/context.ml
@@ -121,6 +121,13 @@ let opam_config_var ~env ~cache var =
 let which ~cache ~path x =
   Hashtbl.find_or_add cache x ~f:(Bin.which ~path)
 
+let ocamlpath_sep =
+  if Sys.cygwin then
+    (* because that's what ocamlfind expects *)
+    ';'
+  else
+    Bin.path_sep
+
 let create ~(kind : Kind.t) ~path ~env ~name ~merlin ~targets () =
   let opam_var_cache = Hashtbl.create 128 in
   (match kind with
@@ -190,10 +197,30 @@ let create ~(kind : Kind.t) ~path ~env ~name ~merlin ~targets () =
     in
 
     let build_dir = Path.of_string (sprintf "_build/%s" name) in
+    let ocamlpath =
+      match
+        let var = "OCAMLPATH" in
+        match kind, findlib_toolchain with
+        | Default, None -> Env.get env var
+        | _ ->
+          (* If we are not in the default context, we can only use the
+             OCAMLPATH variable if it is specific to this build
+             context *)
+          (* CR-someday diml: maybe we should actually clear OCAMLPATH
+             in other build contexts *)
+          match Env.get env var, Env.get (Env.initial ()) var with
+          | None  , None   -> None
+          | Some s, None   -> Some s
+          | None  , Some _ -> None
+          | Some x, Some y -> Option.some_if (x <> y) x
+      with
+      | None -> []
+      | Some s -> Bin.parse_path s ~sep:ocamlpath_sep
+    in
     let findlib_path () =
       match kind, findlib_toolchain, Setup.library_path with
       | Default, None, Some l ->
-        Fiber.return (List.map l ~f:Path.absolute)
+        Fiber.return (ocamlpath @ List.map l ~f:Path.absolute)
       | _ ->
         (* If ocamlfind is present, it has precedence over everything else. *)
         match which "ocamlfind" with
@@ -205,17 +232,20 @@ let create ~(kind : Kind.t) ~path ~env ~name ~merlin ~targets () =
             | Some s -> "-toolchain" :: s :: args
           in
           Process.run_capture_lines ~env Strict (Path.to_string fn) args
-          >>| List.map ~f:Path.absolute
+          >>| fun l ->
+          (* Don't prepend the contents of [OCAMLPATH] since findlib
+             does it already *)
+          List.map l ~f:Path.absolute
         | None ->
           (* If there no ocamlfind in the PATH, check if we have opam
              and assume a standard opam setup *)
           opam_config_var ~env ~cache:opam_var_cache "lib"
           >>| function
-          | Some s -> [Path.absolute s]
+          | Some s -> ocamlpath @ [Path.absolute s]
           | None ->
             (* If neither opam neither ocamlfind are present, assume
                that libraries are [dir ^ "/../lib"] *)
-            [Path.relative (Path.parent dir) "lib"]
+            ocamlpath @ [Path.relative (Path.parent dir) "lib"]
     in
     let ocaml_config_ok_exn = function
       | Ok x -> x
@@ -255,13 +285,6 @@ let create ~(kind : Kind.t) ~path ~env ~name ~merlin ~targets () =
     in
     let env =
       let cwd = Sys.getcwd () in
-      let ocamlpath_sep =
-        if Sys.cygwin then
-          (* because that's what ocamlfind expects *)
-          ';'
-        else
-          Bin.path_sep
-      in
       let extend_var var ?(path_sep=Bin.path_sep) v =
         let v = Filename.concat cwd (Path.to_string v) in
         match Env.get env var with