diff --git a/envsetup.sh b/envsetup.sh
index fc03e10..988499a 100644
--- a/envsetup.sh
+++ b/envsetup.sh
@@ -522,6 +522,13 @@
     # Note this is the string "release", not the value of the variable.
     export TARGET_BUILD_TYPE=release
 
+    local prebuilt_kernel=$(_get_build_var_cached TARGET_PREBUILT_KERNEL)
+    if [ -z "$prebuilt_kernel" ]; then
+        export INLINE_KERNEL_BUILDING=true
+    else
+        unset INLINE_KERNEL_BUILDING
+    fi
+
     [[ -n "${ANDROID_QUIET_BUILD:-}" ]] || echo
 
     set_stuff_for_environment