diff --git a/Stackage/Test.hs b/Stackage/Test.hs
index 3ed22239..d859bc1d 100644
--- a/Stackage/Test.hs
+++ b/Stackage/Test.hs
@@ -57,7 +57,8 @@ runTestSuite :: BuildSettings
 runTestSuite settings testdir hasTestSuites prevPassed (packageName, (version, Maintainer maintainer)) = do
     -- Set up a new environment that includes the sandboxed bin folder in PATH.
     env' <- getEnvironment
-    let menv = Just $ map (fixEnv $ binDir settings) env'
+    let menv = Just $ ("PACKAGE_SANDBOX", packageDir settings)
+                    : map (fixEnv $ binDir settings) env'
 
     let run cmd args wdir handle = do
             ph <- runProcess cmd args (Just wdir) menv Nothing (Just handle) (Just handle)