diff --git a/envsetup.sh b/envsetup.sh
index 3d41a83d81..a6e870d848 100644
--- a/envsetup.sh
+++ b/envsetup.sh
@@ -522,6 +522,13 @@ function _lunch_meat()
     # Note this is the string "release", not the value of the variable.
     export TARGET_BUILD_TYPE=release
 
+    local no_kernel=$(_get_build_var_cached TARGET_NO_KERNEL)
+    if [[ "$no_kernel" == "true" ]]; then
+        unset INLINE_KERNEL_BUILDING
+    else
+        export INLINE_KERNEL_BUILDING=true
+    fi
+
     [[ -n "${ANDROID_QUIET_BUILD:-}" ]] || echo
 
     fixup_common_out_dir