diff --git a/config/path b/config/path
index 424dc9944b..ee8433d72e 100644
--- a/config/path
+++ b/config/path
@@ -107,7 +107,9 @@ TARGET_CPPFLAGS=
 TARGET_CFLAGS="$GCC_OPTIM -Wall -pipe"
 TARGET_CXXFLAGS="$TARGET_CFLAGS"
 TARGET_LDFLAGS=""
-TARGET_PKG_CONFIG_PATH="$SYSROOT_PREFIX/usr/lib/pkgconfig"
+TARGET_PKG_CONFIG_PATH=""
+TARGET_PKG_CONFIG_LIBDIR="$SYSROOT_PREFIX/usr/lib:$SYSROOT_PREFIX/usr/share"
+TARGET_PKG_CONFIG_SYSROOT_DIR="$SYSROOT_PREFIX"
 
 case $TARGET_ARCH in
     i386)
@@ -144,7 +146,9 @@ HOST_CPPFLAGS=""
 HOST_CFLAGS="-O2 -Wall -pipe -I$ROOT/$TOOLCHAIN/include"
 HOST_CXXFLAGS="$HOST_CFLAGS"
 HOST_LDFLAGS="-L$ROOT/$TOOLCHAIN/lib"
-HOST_PKG_CONFIG_PATH="$ROOT/$TOOLCHAIN/lib/pkgconfig"
+HOST_PKG_CONFIG_PATH=""
+HOST_PKG_CONFIG_LIBDIR="$ROOT/$TOOLCHAIN/lib:$ROOT/$TOOLCHAIN/share"
+HOST_PKG_CONFIG_SYSROOT_DIR="$ROOT/$TOOLCHAIN"
 
 export CCACHE_DIR=$ROOT/$BUILD/.ccache
 export MAKEFLAGS=-j$CONCURRENCY_MAKE_LEVEL
@@ -192,6 +196,8 @@ setup_toolchain() {
     export CXXFLAGS="$TARGET_CXXFLAGS"
     export LDFLAGS="$TARGET_LDFLAGS"
     export PKG_CONFIG_PATH="$TARGET_PKG_CONFIG_PATH"
+    export PKG_CONFIG_LIBDIR="$TARGET_PKG_CONFIG_LIBDIR"
+    export PKG_CONFIG_SYSROOT_DIR="$TARGET_PKG_CONFIG_SYSROOT_DIR"
 
   # set CMAKE configfile for target
     export CMAKE_CONF=$ROOT/$TOOLCHAIN/etc/cmake-$TARGET_NAME.conf
@@ -212,6 +218,8 @@ setup_toolchain() {
     export CXXFLAGS="$HOST_CXXFLAGS"
     export LDFLAGS="$HOST_LDFLAGS"
     export PKG_CONFIG_PATH="$HOST_PKG_CONFIG_PATH"
+    export PKG_CONFIG_LIBDIR="$HOST_PKG_CONFIG_LIBDIR"
+    export PKG_CONFIG_SYSROOT_DIR="$HOST_PKG_CONFIG_SYSROOT_DIR"
 
   # set CMAKE configfile for host
     export CMAKE_CONF=$ROOT/$TOOLCHAIN/etc/cmake-$HOST_NAME.conf
diff --git a/packages/toolchain/devel/pkg-config/build b/packages/toolchain/devel/pkg-config/build
index d0f96312f4..cf15730ee2 100755
--- a/packages/toolchain/devel/pkg-config/build
+++ b/packages/toolchain/devel/pkg-config/build
@@ -5,9 +5,8 @@
 setup_toolchain host
 
 cd $PKG_BUILD
-./configure --prefix=/usr \
-            --sysconfdir=/etc \
-            --with-pc-path="$SYSROOT_PREFIX/usr/lib/pkgconfig" \
-            --enable-static
+./configure --enable-shared \
+            --disable-static \
+            --with-gnu-ld
 
 make
diff --git a/packages/toolchain/devel/pkg-config/patches/pkg-config-0.23-fix-sysroot.diff b/packages/toolchain/devel/pkg-config/patches/pkg-config-0.23-fix-sysroot.diff
deleted file mode 100644
index 36538112b2..0000000000
--- a/packages/toolchain/devel/pkg-config/patches/pkg-config-0.23-fix-sysroot.diff
+++ /dev/null
@@ -1,34 +0,0 @@
-[PATCH] fix PKG_CONFIG_SYSROOT_DIR handling
-
-With PKG_CONFIG_SYSROOT_DIR enabled, everything else than -L and -I words
-gets stripped away.
-
-Signed-off-by: Peter Korsgaard <jacmet@sunsite.dk>
----
- pkg.c |    8 ++------
- 1 file changed, 2 insertions(+), 6 deletions(-)
-
-Index: pkg-config-0.23/pkg.c
-===================================================================
---- pkg-config-0.23.orig/pkg.c
-+++ pkg-config-0.23/pkg.c
-@@ -472,17 +472,13 @@
-   while (tmp != NULL)
-     {
-       char *tmpstr = (char*) tmp->data;
--      if (pcsysrootdir != NULL)
-+      if (pcsysrootdir != NULL && tmpstr[0] == '-' &&
-+          (tmpstr[1] == 'I' || tmpstr[1] == 'L'))
- 	{
--	  if (tmpstr[0] == '-' &&
--	      (tmpstr[1] == 'I' ||
--	       tmpstr[1] == 'L'))
--	    {
- 	      g_string_append_c (str, '-');
- 	      g_string_append_c (str, tmpstr[1]);
- 	      g_string_append (str, pcsysrootdir);
- 	      g_string_append (str, tmpstr+2);
--	    }
- 	}
-       else 
- 	{
diff --git a/packages/toolchain/devel/pkg-config/patches/pkg-config-0.25-m4_pattern_allow.diff b/packages/toolchain/devel/pkg-config/patches/pkg-config-0.25-m4_pattern_allow.diff
new file mode 100644
index 0000000000..7613fe0268
--- /dev/null
+++ b/packages/toolchain/devel/pkg-config/patches/pkg-config-0.25-m4_pattern_allow.diff
@@ -0,0 +1,20 @@
+diff -Naur pkg-config-0.25-old/pkg.m4 pkg-config-0.25-new/pkg.m4
+--- pkg-config-0.25-old/pkg.m4	2009-12-06 12:39:02.000000000 -0800
++++ pkg-config-0.25-new/pkg.m4	2010-05-28 16:55:19.000000000 -0700
+@@ -26,7 +26,15 @@
+ # ----------------------------------
+ AC_DEFUN([PKG_PROG_PKG_CONFIG],
+ [m4_pattern_forbid([^_?PKG_[A-Z_]+$])
+-m4_pattern_allow([^PKG_CONFIG(_PATH)?$])
++m4_pattern_allow([^PKG_CONFIG$])
++m4_pattern_allow([^PKG_CONFIG_ALLOW_SYSTEM_CFLAGS$])
++m4_pattern_allow([^PKG_CONFIG_ALLOW_SYSTEM_LIBS$])
++m4_pattern_allow([^PKG_CONFIG_DEBUG_SPEW$])
++m4_pattern_allow([^PKG_CONFIG_DISABLE_UNINSTALLED$])
++m4_pattern_allow([^PKG_CONFIG_LIBDIR$])
++m4_pattern_allow([^PKG_CONFIG_PATH$])
++m4_pattern_allow([^PKG_CONFIG_SYSROOT_DIR$])
++m4_pattern_allow([^PKG_CONFIG_TOP_BUILD_DIR$])
+ AC_ARG_VAR([PKG_CONFIG], [path to pkg-config utility])
+ AC_ARG_VAR([PKG_CONFIG_PATH], [directories to add to pkg-config's search path])
+ AC_ARG_VAR([PKG_CONFIG_LIBDIR], [path overriding pkg-config's built-in search path])
diff --git a/packages/toolchain/devel/pkg-config/url b/packages/toolchain/devel/pkg-config/url
index 2279971f40..8554871808 100644
--- a/packages/toolchain/devel/pkg-config/url
+++ b/packages/toolchain/devel/pkg-config/url
@@ -1 +1 @@
-http://pkgconfig.freedesktop.org/releases/pkg-config-0.23.tar.gz
+http://pkgconfig.freedesktop.org/releases/pkg-config-0.25.tar.gz