diff --git a/ir_mex_build.m b/ir_mex_build.m
index 098a1da..b140979 100644
--- a/ir_mex_build.m
+++ b/ir_mex_build.m
@@ -12,5 +12,6 @@
 
 ir_mex_build_mri
 ir_mex_build_table
+irt_mex_make
 
 % todo: ir_mex_build_penal
diff --git a/mex/local/readme.txt b/mex/local/readme.txt
new file mode 100644
index 0000000..3c28e41
--- /dev/null
+++ b/mex/local/readme.txt
@@ -0,0 +1,5 @@
+mex/local/readme.txt
+
+This directory contains MEX files that are compiled locally by the user,
+typically by running (from the top-level MIRT directory) the m-function
+>> ir_mex_build
diff --git a/mex/src/irt_mex_make.m b/mex/src/irt_mex_make.m
index 312f282..f6322ae 100644
--- a/mex/src/irt_mex_make.m
+++ b/mex/src/irt_mex_make.m
@@ -1,11 +1,11 @@
 % irt_mex_make.m
 
 if ispc
-	cd penalty
-	mex penalty_mex.c mexarg.c 'penalty,diff.c' -DIs_pc -DMmex -outdir ../v7
-	cd ..
+	cd mex/src/penalty
+    mex penalty_mex.c mexarg.c 'penalty,diff.c' -DIs_pc -DMmex -outdir ../../local
+	cd ../../..
 else
-	cd penalty
-	mex -v penalty_mex.c mexarg.c 'penalty,diff.c' -DMmex -outdir ../v7
-	cd ..
+	cd mex/src/penalty
+    mex -v penalty_mex.c '../def/mexarg.c' 'penalty,diff.c' -I'../def/' -DMmex -outdir ../../local
+	cd ../../..
 end
diff --git a/setup.m b/setup.m
index 2b90217..2f9c4ec 100644
--- a/setup.m
+++ b/setup.m
@@ -29,6 +29,7 @@
 	irtdir = [irtdir filesep];
 end
 
+
 list = {...
 'align', ...		% image registration
 'align/mex', ...	% image registration mex files
@@ -41,6 +42,8 @@
 'fbp', ...		% FBP (filtered backprojection) code
 'general', ...		% generic image reconstruction
 'graph', ...		% graphics routines
+'mex/local', ... % MEX files compiled for local OS/CPU
+'mex/src', ... % MEX source code for irt_mex_make.m
 'mri', ...		% MRI reconstruction
 'mri/fieldmap', ...	% MRI B0 field map estimation
 'mri-rf/yip-spsp', ...	% MRI RF pulse design
@@ -70,6 +73,7 @@
 % e.g., 7.3 and running on earlier 7.0 won't work.
 % If you have mex problems, comment out the following line.
 % Much of the toolbox will work without mex, just slower.
+addpath([irtdir 'mex/local']) % must precede "mex/v7"
 addpath([irtdir 'mex/v7']);