diff --git a/Makefile b/Makefile
index 2f6cf202a..fcb224abe 100644
--- a/Makefile
+++ b/Makefile
@@ -1,7 +1,7 @@
 
 BUILD_DIR:=build
 
-MODULES=gnupg bootstrap nailgun test os os/centos os/ubuntu iso packages/rpm
+MODULES=gnupg bootstrap nailgun test os os/centos os/ubuntu iso packages/rpm naily
 
 .PHONY: all clean test test-unit help mirror FORCE
 
diff --git a/iso/module.mk b/iso/module.mk
index bdb86a11e..778879e5a 100644
--- a/iso/module.mk
+++ b/iso/module.mk
@@ -341,9 +341,10 @@ $(ISOROOT)/eggs:
 	mkdir -p $@
 	cp $(LOCAL_MIRROR)/eggs/* $(ISOROOT)/eggs/
 
-$(ISOROOT)/gems/gems:
+$(ISOROOT)/gems/gems: $(BUILD_DIR)/gems/naily.gem
 	mkdir -p $@
-	cp $(LOCAL_MIRROR)/gems/* $(ISOROOT)/gems/gems
+	cp $(LOCAL_MIRROR)/gems/* $@
+	cp $(filter %.gem,$^) $@
 	gem generate_index -d $(ISOROOT)/gems
 
 # MAIN ISO RULE
diff --git a/naily/module.mk b/naily/module.mk
new file mode 100644
index 000000000..4373efc8c
--- /dev/null
+++ b/naily/module.mk
@@ -0,0 +1,11 @@
+
+/:=$(BUILD_DIR)/gems/
+
+$/naily.gem: naily/naily.gemspec \
+	  $(addprefix naily/bin/,$(call find-files,naily/bin)) \
+		$(addprefix naily/lib/,$(call find-files,naily/lib))
+	@mkdir -p $(@D)
+	cd $(<D) && \
+		gem build $(<F)
+	mv $(<D)/naily-*.gem $@
+