diff --git a/app/build.gradle.kts b/app/build.gradle.kts
index ce74a90..8c3e82c 100644
--- a/app/build.gradle.kts
+++ b/app/build.gradle.kts
@@ -13,7 +13,9 @@ application {
     applicationName = "gradle2nix"
     applicationDefaultJvmArgs += "-Dorg.nixos.gradle2nix.initScript=@APP_HOME@/gradle/init.gradle"
     applicationDistribution
-        .from(tasks.getByPath(":plugin:shadowJar"))
+        .from(
+            tasks.getByPath(":plugin:shadowJar"),
+            project(":plugin").file("src/main/resources/init.gradle"))
         .into("gradle")
         .rename("plugin.*\\.jar", "plugin.jar")
 }
diff --git a/app/src/dist/gradle/init.gradle b/app/src/dist/gradle/init.gradle
index f0c230f..7516f42 100644
--- a/app/src/dist/gradle/init.gradle
+++ b/app/src/dist/gradle/init.gradle
@@ -1,3 +1,5 @@
+package org.nixos.gradle2nix
+
 initscript {
     dependencies {
         classpath files("plugin.jar")
diff --git a/plugin/build.gradle.kts b/plugin/build.gradle.kts
index 24a63e1..ba3912a 100644
--- a/plugin/build.gradle.kts
+++ b/plugin/build.gradle.kts
@@ -40,6 +40,11 @@ tasks {
         kotlinDsl = true
     }
 
+    register("gradle2nixTest", Test::class) {
+        dependsOn(gradleTest)
+
+    }
+
     gradleTestGenerator {
         dependsOn(shadowJar)
         doLast {
diff --git a/plugin/src/gradleTest/projectWithBuildSrc/build.gradle b/plugin/src/gradleTest/projectWithBuildSrc/build.gradle
new file mode 100644
index 0000000..1a29485
--- /dev/null
+++ b/plugin/src/gradleTest/projectWithBuildSrc/build.gradle
@@ -0,0 +1,3 @@
+task runGradleTest {
+    dependsOn 'nixGradleEnv'
+}
\ No newline at end of file
diff --git a/plugin/src/gradleTest/projectWithBuildSrc/build.gradle.kts b/plugin/src/gradleTest/projectWithBuildSrc/build.gradle.kts
new file mode 100644
index 0000000..c77bb76
--- /dev/null
+++ b/plugin/src/gradleTest/projectWithBuildSrc/build.gradle.kts
@@ -0,0 +1,3 @@
+tasks.register("runGradleTest") {
+    dependsOn("nixGradleEnv")
+}
diff --git a/plugin/src/gradleTest/projectWithBuildSrc/buildSrc/build.gradle b/plugin/src/gradleTest/projectWithBuildSrc/buildSrc/build.gradle
new file mode 100644
index 0000000..30b6e18
--- /dev/null
+++ b/plugin/src/gradleTest/projectWithBuildSrc/buildSrc/build.gradle
@@ -0,0 +1,10 @@
+apply plugin: "java"
+
+repositories {
+    jcenter()
+}
+
+dependencies {
+    implementation("com.squareup.okio:okio:2.2.2")
+    implementation("com.squareup.moshi:moshi:1.8.0")
+}
diff --git a/plugin/src/gradleTest/projectWithBuildSrc/buildSrc/settings.gradle b/plugin/src/gradleTest/projectWithBuildSrc/buildSrc/settings.gradle
new file mode 100644
index 0000000..e69de29
diff --git a/plugin/src/main/kotlin/org/nixos/gradle2nix/Gradle2NixPlugin.kt b/plugin/src/main/kotlin/org/nixos/gradle2nix/Gradle2NixPlugin.kt
index 6d40da9..f97e0b0 100644
--- a/plugin/src/main/kotlin/org/nixos/gradle2nix/Gradle2NixPlugin.kt
+++ b/plugin/src/main/kotlin/org/nixos/gradle2nix/Gradle2NixPlugin.kt
@@ -45,6 +45,22 @@ open class Gradle2NixPlugin : Plugin<Gradle> {
                 outputDir.set(extension.outputDir)
             }
 
+            val buildSrcDir = rootProject.projectDir.resolve("buildSrc")
+            if (buildSrcDir.exists() && buildSrcDir.isDirectory) {
+                val buildSrcEnv =
+                    rootProject.tasks.register("nixBuildSrcEnv", NixBuildSrcEnv::class) {
+                        dir = buildSrcDir
+                        val buildFile = buildSrcDir.listFiles().let { files ->
+                            files.find { it.name == "build.gradle.kts" } ?:
+                                files.find { it.name == "build.gradle" }
+                        }
+                        if (buildFile != null) this.buildFile = buildFile
+                    }
+                gradleEnv.configure {
+                    dependsOn(buildSrcEnv)
+                }
+            }
+
             val pluginEnv =
                 rootProject.tasks.register("nixPluginEnv", NixPluginEnv::class, pluginRequests)
             gradleEnv.configure {
@@ -115,6 +131,10 @@ open class Gradle2NixPlugin : Plugin<Gradle> {
     }
 }
 
+internal val pluginJar by lazy {
+    File(Gradle2NixPlugin::class.java.protectionDomain.codeSource.location.toURI()).absoluteFile
+}
+
 internal val moshi by lazy { Moshi.Builder().build() }
 
 open class Gradle2NixExtension(project: Project, defaultConfigurations: List<String>) {
diff --git a/plugin/src/main/kotlin/org/nixos/gradle2nix/GradleCompat.kt b/plugin/src/main/kotlin/org/nixos/gradle2nix/GradleCompat.kt
index b95107d..70117a2 100644
--- a/plugin/src/main/kotlin/org/nixos/gradle2nix/GradleCompat.kt
+++ b/plugin/src/main/kotlin/org/nixos/gradle2nix/GradleCompat.kt
@@ -1,5 +1,6 @@
 package org.nixos.gradle2nix
 
+import org.gradle.api.Project
 import org.gradle.api.file.Directory
 import org.gradle.api.file.DirectoryProperty
 import org.gradle.api.file.RegularFile
@@ -67,3 +68,21 @@ internal fun RegularFileProperty.conventionCompat(
         apply { set(valueProvider) }
     }
 }
+
+@Suppress("DEPRECATION")
+internal fun Project.directoryPropertyCompat(): DirectoryProperty {
+    return if (versionAtLeast("5.0")) {
+        objects.directoryProperty()
+    } else {
+        layout.directoryProperty()
+    }
+}
+
+@Suppress("DEPRECATION")
+internal fun Project.filePropertyCompat(): RegularFileProperty {
+    return if (versionAtLeast("5.0")) {
+        objects.fileProperty()
+    } else {
+        layout.fileProperty()
+    }
+}
diff --git a/plugin/src/main/kotlin/org/nixos/gradle2nix/NixBuildSrcEnv.kt b/plugin/src/main/kotlin/org/nixos/gradle2nix/NixBuildSrcEnv.kt
new file mode 100644
index 0000000..8408aa1
--- /dev/null
+++ b/plugin/src/main/kotlin/org/nixos/gradle2nix/NixBuildSrcEnv.kt
@@ -0,0 +1,31 @@
+package org.nixos.gradle2nix
+
+import org.gradle.api.tasks.GradleBuild
+import org.gradle.api.tasks.InputDirectory
+import org.gradle.api.tasks.InputFile
+import org.gradle.api.tasks.Optional
+import org.gradle.kotlin.dsl.configure
+import java.io.File
+
+open class NixBuildSrcEnv : GradleBuild() {
+    init {
+        configure {
+            tasks = listOf("nixGradleEnv")
+            startParameter.addInitScript(writeInitScriptTo(dir.resolve("build/nix/init.gradle")))
+        }
+    }
+}
+
+private fun writeInitScriptTo(dest: File): File {
+    dest.parentFile.mkdirs()
+    dest.writeText("""
+        initscript {
+            dependencies {
+                classpath files("$pluginJar")
+            }
+        }
+
+        apply plugin: org.nixos.gradle2nix.Gradle2NixPlugin
+    """.trimIndent())
+    return dest
+}
diff --git a/plugin/src/main/resources/gradle-env.nix b/plugin/src/main/resources/org/nixos/gradle2nix/gradle-env.nix
similarity index 100%
rename from plugin/src/main/resources/gradle-env.nix
rename to plugin/src/main/resources/org/nixos/gradle2nix/gradle-env.nix