diff --git a/msdos/ChangeLog b/msdos/ChangeLog
index 5fe9793eaba..4edb9510638 100644
--- a/msdos/ChangeLog
+++ b/msdos/ChangeLog
@@ -1,3 +1,9 @@
+2008-10-14  Eli Zaretskii  <eliz@gnu.org>
+
+	* sedlisp.inp (lisp): Set to absolute file name of current
+	directory, not to ".", to have it on EMACSLOADPATH when we descend
+	into subdirectories.
+
 2008-08-23  Eli Zaretskii  <eliz@gnu.org>
 
 	* sed2v2.inp: Remove definition of USER_FULL_NAME (now defined on
diff --git a/msdos/sedlisp.inp b/msdos/sedlisp.inp
index cb95248e078..bd2c83d2add 100644
--- a/msdos/sedlisp.inp
+++ b/msdos/sedlisp.inp
@@ -20,7 +20,7 @@
 /^SHELL *=/i\
 export FNCASE=y
 
-/^lisp=/s|@srcdir@|.|
+/^lisp=/s|@srcdir@|$(shell pwd)|
 /^VPATH=/s|@srcdir@|.|
 /^srcdir=/s|@srcdir@|.|
 /^bootstrap-clean:/a\