diff --git a/examples/embedding/LocalModule.jl b/examples/embedding/LocalModule.jl
new file mode 100644
index 0000000000000..340bd4bc7f666
--- /dev/null
+++ b/examples/embedding/LocalModule.jl
@@ -0,0 +1,13 @@
+__precompile__()
+module LocalModule
+
+export myapp
+
+function myapp()
+    p = addprocs(1)
+    @everywhere p println("Taking over the world...")
+    rmprocs(p)
+    nothing
+end
+
+end
diff --git a/examples/embedding/Makefile b/examples/embedding/Makefile
index 38e9bc33b2cae..acfd9baf545ed 100644
--- a/examples/embedding/Makefile
+++ b/examples/embedding/Makefile
@@ -38,7 +38,14 @@ $(BIN)/embedding$(EXE): $(SRCDIR)/embedding.c
 $(BIN)/embedding-debug$(EXE): $(SRCDIR)/embedding.c
 	$(CC) $^ -o $@ $(CPPFLAGS_ADD) $(CPPFLAGS) $(CFLAGS_ADD) $(CFLAGS) $(LDFLAGS_ADD) $(LDFLAGS) $(DEBUGFLAGS)
 
-check: $(BIN)/embedding$(EXE)
+ifneq ($(abspath $(BIN)),$(abspath $(SRCDIR)))
+# for demonstration purposes, our demo code is also installed
+# in $BIN, although this would likely not be typical
+$(BIN)/LocalModule.jl: $(SRCDIR)/LocalModule.jl
+	cp $< $@
+endif
+
+check: $(BIN)/embedding$(EXE) $(BIN)/LocalModule.jl
 	$(JULIA) $(SRCDIR)/embedding-test.jl $<
 	@echo SUCCESS
 
diff --git a/examples/embedding/embedding-test.jl b/examples/embedding/embedding-test.jl
index fcdbf7fbf2999..11aaca5b5d258 100644
--- a/examples/embedding/embedding-test.jl
+++ b/examples/embedding/embedding-test.jl
@@ -20,8 +20,9 @@ end
     @test stderr == "MethodError: no method matching this_function_has_no_methods()\n"
     @test success(p)
     lines = wait(stdout_task)
-    @test length(lines) == 9
+    @test length(lines) == 10
     @test parse(Float64, lines[1]) ≈ sqrt(2)
     @test lines[8] == "called bar"
     @test lines[9] == "calling new bar"
+    @test lines[10] == "\tFrom worker 2:\tTaking over the world..."
 end
diff --git a/examples/embedding/embedding.c b/examples/embedding/embedding.c
index 712e46dd8b6b4..a1fc6c676620b 100644
--- a/examples/embedding/embedding.c
+++ b/examples/embedding/embedding.c
@@ -149,6 +149,25 @@ int main()
         bar();
     }
 
+    {
+        // Importing a Julia package
+
+        checked_eval_string("let d = dirname(unsafe_string(Base.JLOptions().julia_bin))\n"
+                            // disable the package manager
+                            "    ENV[\"JULIA_PKGDIR\"] = joinpath(d, \"disabled\")\n"
+                            // locate files relative to the "embedding" executable
+                            "    empty!(LOAD_PATH)\n"
+                            "    push!(LOAD_PATH, d)\n"
+                            // this directory needs to be writable for the example,
+                            // although in real code it usually wouldn't necessarily be used that way
+                            "    empty!(Base.LOAD_CACHE_PATH)\n"
+                            "    push!(Base.LOAD_CACHE_PATH, tempdir())\n"
+                            "end");
+        checked_eval_string("import LocalModule");
+        checked_eval_string("LocalModule.myapp()");
+    }
+
+
     int ret = 0;
     jl_atexit_hook(ret);
     return ret;
diff --git a/src/jlapi.c b/src/jlapi.c
index ebd16f11914ba..eadf3eafc7f27 100644
--- a/src/jlapi.c
+++ b/src/jlapi.c
@@ -26,19 +26,24 @@ JL_DLLEXPORT char * __cdecl dirname(char *);
 #else
 #include <libgen.h>
 #endif
+#ifndef _OS_WINDOWS_
+#include <dlfcn.h>
+#endif
 
-JL_DLLEXPORT int jl_is_initialized(void) { return jl_main_module!=NULL; }
+JL_DLLEXPORT int jl_is_initialized(void)
+{
+    return jl_main_module != NULL;
+}
 
-// First argument is the usr/lib directory where libjulia is, or NULL to guess.
-// if that doesn't work, try the full path to the "lib" directory that
-// contains lib/julia/sys.ji
+// First argument is the usr/bin directory where the julia binary is, or NULL to guess.
 // Second argument is the path of a system image file (*.ji) relative to the
-// first argument path, or relative to the default julia home dir. The default
-// is something like ../lib/julia/sys.ji
+// first argument path, or relative to the default julia home dir.
+// The default is something like ../lib/julia/sys.ji
 JL_DLLEXPORT void jl_init_with_image(const char *julia_home_dir,
                                      const char *image_relative_path)
 {
-    if (jl_is_initialized()) return;
+    if (jl_is_initialized())
+        return;
     libsupport_init();
     jl_options.julia_home = julia_home_dir;
     if (image_relative_path != NULL)
@@ -51,17 +56,30 @@ JL_DLLEXPORT void jl_init_with_image(const char *julia_home_dir,
 
 JL_DLLEXPORT void jl_init(void)
 {
-    char *libjldir = NULL;
-
+    char *libbindir = NULL;
+#ifdef _OS_WINDOWS_
     void *hdl = (void*)jl_load_dynamic_library_e(NULL, JL_RTLD_DEFAULT);
-    if (hdl)
-        libjldir = dirname((char*)jl_pathname_for_handle(hdl));
-    if (libjldir)
-        jl_init_with_image(libjldir, jl_get_default_sysimg_path());
-    else {
+    if (hdl) {
+        char *to_free = (char*)jl_pathname_for_handle(hdl);
+        if (to_free) {
+            libbindir = strdup(dirname(to_free));
+            free(to_free);
+        }
+    }
+#else
+    Dl_info dlinfo;
+    if (dladdr((void*)jl_init, &dlinfo) != 0 && dlinfo.dli_fname) {
+        char *to_free = strdup(dlinfo.dli_fname);
+        (void)asprintf(&libbindir, "%s" PATHSEPSTRING ".." PATHSEPSTRING "%s", dirname(to_free), "bin");
+        free(to_free);
+    }
+#endif
+    if (!libbindir) {
         printf("jl_init unable to find libjulia!\n");
         abort();
     }
+    jl_init_with_image(libbindir, jl_get_default_sysimg_path());
+    free(libbindir);
 }
 
 JL_DLLEXPORT jl_value_t *jl_eval_string(const char *str)