diff --git a/update_engine.gyp b/update_engine.gyp
index f00d620..4254e9a 100644
--- a/update_engine.gyp
+++ b/update_engine.gyp
@@ -110,11 +110,105 @@
         },
       ],
     },
-    # The main static_library with all the code.
+    # The payload application component and common dependencies.
+    {
+      'target_name': 'libpayload_consumer',
+      'type': 'static_library',
+      'dependencies': [
+        'update_metadata-protos',
+        'update_engine-other-dbus-proxies',
+      ],
+      #TODO(deymo): Remove unused dependencies once we stop including files
+      # from the root directory.
+      'variables': {
+        'exported_deps': [
+          'libcrypto',
+          'libcurl',
+          'libdebugd-client',
+          'libsession_manager-client',
+          'libmetrics-<(libbase_ver)',
+          'libpower_manager-client',
+          'libupdate_engine-client',
+          'libshill-client',
+          'libssl',
+          'expat',
+          'xz-embedded',
+        ],
+        'deps': ['<@(exported_deps)'],
+      },
+      'all_dependent_settings': {
+        'variables': {
+          'deps': [
+            '<@(exported_deps)',
+          ],
+        },
+      },
+      'link_settings': {
+        'variables': {
+          'deps': [
+            '<@(exported_deps)',
+          ],
+        },
+        'libraries': [
+          '-lbz2',
+          '-lpolicy-<(libbase_ver)',
+          '-lrootdev',
+          '-lrt',
+          '-lvboot_host',
+        ],
+      },
+      'sources': [
+        'common/action_processor.cc',
+        'common/boot_control_chromeos.cc',
+        'common/boot_control_stub.cc',
+        'common/certificate_checker.cc',
+        'common/clock.cc',
+        'common/constants.cc',
+        'common/hardware_chromeos.cc',
+        'common/hash_calculator.cc',
+        'common/http_common.cc',
+        'common/http_fetcher.cc',
+        'common/hwid_override.cc',
+        'common/libcurl_http_fetcher.cc',
+        'common/multi_range_http_fetcher.cc',
+        'common/platform_constants_chromeos.cc',
+        'common/prefs.cc',
+        'common/subprocess.cc',
+        'common/terminator.cc',
+        'common/utils.cc',
+        'payload_consumer/bzip_extent_writer.cc',
+        'payload_consumer/delta_performer.cc',
+        'payload_consumer/download_action.cc',
+        'payload_consumer/extent_writer.cc',
+        'payload_consumer/file_descriptor.cc',
+        'payload_consumer/file_writer.cc',
+        'payload_consumer/filesystem_verifier_action.cc',
+        'payload_consumer/install_plan.cc',
+        'payload_consumer/payload_constants.cc',
+        'payload_consumer/payload_verifier.cc',
+        'payload_consumer/postinstall_runner_action.cc',
+        'payload_consumer/xz_extent_writer.cc',
+      ],
+      'conditions': [
+        ['USE_mtd == 1', {
+          'sources': [
+            'payload_consumer/mtd_file_descriptor.cc',
+          ],
+          'link_settings': {
+            'libraries': [
+              '-lmtdutils',
+            ],
+          },
+        }],
+      ],
+    },
+    # The main daemon static_library with all the code used to check for updates
+    # with Omaha and expose a DBus daemon.
     {
       'target_name': 'libupdate_engine',
       'type': 'static_library',
       'dependencies': [
+        'libpayload_consumer',
         'update_metadata-protos',
         'update_engine-dbus-adaptor',
         'update_engine-other-dbus-proxies',
@@ -158,49 +252,21 @@
         ],
       },
       'sources': [
-        'action_processor.cc',
-        'boot_control_chromeos.cc',
-        'boot_control_stub.cc',
-        'bzip_extent_writer.cc',
-        'certificate_checker.cc',
         'chrome_browser_proxy_resolver.cc',
-        'clock.cc',
         'connection_manager.cc',
-        'constants.cc',
         'daemon.cc',
         'dbus_service.cc',
-        'delta_performer.cc',
-        'download_action.cc',
-        'extent_writer.cc',
-        'file_descriptor.cc',
-        'file_writer.cc',
-        'filesystem_verifier_action.cc',
-        'hardware_chromeos.cc',
-        'http_common.cc',
-        'http_fetcher.cc',
-        'hwid_override.cc',
         'image_properties_chromeos.cc',
-        'install_plan.cc',
         'libcros_proxy.cc',
-        'libcurl_http_fetcher.cc',
         'metrics.cc',
-        'multi_range_http_fetcher.cc',
-        'omaha_hash_calculator.cc',
         'omaha_request_action.cc',
         'omaha_request_params.cc',
         'omaha_response_handler_action.cc',
         'p2p_manager.cc',
-        'payload_constants.cc',
         'payload_state.cc',
-        'payload_verifier.cc',
-        'platform_constants_chromeos.cc',
-        'postinstall_runner_action.cc',
-        'prefs.cc',
         'proxy_resolver.cc',
         'real_system_state.cc',
         'shill_proxy.cc',
-        'subprocess.cc',
-        'terminator.cc',
         'update_attempter.cc',
         'update_manager/boxed_value.cc',
         'update_manager/chromeos_policy.cc',
@@ -217,20 +283,6 @@
         'update_manager/state_factory.cc',
         'update_manager/update_manager.cc',
         'update_status_utils.cc',
-        'utils.cc',
-        'xz_extent_writer.cc',
-      ],
-      'conditions': [
-        ['USE_mtd == 1', {
-          'sources': [
-            'mtd_file_descriptor.cc',
-          ],
-          'link_settings': {
-            'libraries': [
-              '-lmtdutils',
-            ],
-          },
-        }],
       ],
     },
     # update_engine daemon.
@@ -242,7 +294,7 @@
       ],
       'sources': [
         'main.cc',
-      ]
+      ],
     },
     # update_engine console client.
     {
@@ -326,7 +378,7 @@
       },
       'sources': [
         'payload_generator/generate_delta_main.cc',
-      ]
+      ],
     },
   ],
   'conditions': [
@@ -365,7 +417,7 @@
           'dependencies': ['libupdate_engine'],
           'sources': [
             'test_http_server.cc',
-          ]
+          ],
         },
         # Main unittest file.
         {
@@ -388,32 +440,39 @@
           ],
           'includes': ['../../../platform2/common-mk/common_test.gypi'],
           'sources': [
-            'action_pipe_unittest.cc',
-            'action_processor_unittest.cc',
-            'action_unittest.cc',
-            'boot_control_chromeos_unittest.cc',
-            'bzip_extent_writer_unittest.cc',
-            'certificate_checker_unittest.cc',
             'chrome_browser_proxy_resolver_unittest.cc',
+            'common/action_pipe_unittest.cc',
+            'common/action_processor_unittest.cc',
+            'common/action_unittest.cc',
+            'common/boot_control_chromeos_unittest.cc',
+            'common/certificate_checker_unittest.cc',
+            'common/fake_prefs.cc',
+            'common/hash_calculator_unittest.cc',
+            'common/http_fetcher_unittest.cc',
+            'common/hwid_override_unittest.cc',
+            'common/mock_http_fetcher.cc',
+            'common/prefs_unittest.cc',
+            'common/subprocess_unittest.cc',
+            'common/terminator_unittest.cc',
+            'common/test_utils.cc',
+            'common/utils_unittest.cc',
             'connection_manager_unittest.cc',
             'dbus_service_unittest.cc',
-            'delta_performer_integration_test.cc',
-            'delta_performer_unittest.cc',
-            'download_action_unittest.cc',
-            'extent_writer_unittest.cc',
-            'fake_prefs.cc',
             'fake_shill_proxy.cc',
             'fake_system_state.cc',
-            'file_writer_unittest.cc',
-            'filesystem_verifier_action_unittest.cc',
-            'http_fetcher_unittest.cc',
-            'hwid_override_unittest.cc',
-            'mock_http_fetcher.cc',
-            'omaha_hash_calculator_unittest.cc',
             'omaha_request_action_unittest.cc',
             'omaha_request_params_unittest.cc',
             'omaha_response_handler_action_unittest.cc',
             'p2p_manager_unittest.cc',
+            'payload_consumer/bzip_extent_writer_unittest.cc',
+            'payload_consumer/delta_performer_integration_test.cc',
+            'payload_consumer/delta_performer_unittest.cc',
+            'payload_consumer/download_action_unittest.cc',
+            'payload_consumer/extent_writer_unittest.cc',
+            'payload_consumer/file_writer_unittest.cc',
+            'payload_consumer/filesystem_verifier_action_unittest.cc',
+            'payload_consumer/postinstall_runner_action_unittest.cc',
+            'payload_consumer/xz_extent_writer_unittest.cc',
             'payload_generator/ab_generator_unittest.cc',
             'payload_generator/blob_file_writer_unittest.cc',
             'payload_generator/block_mapping_unittest.cc',
@@ -426,17 +485,12 @@
             'payload_generator/full_update_generator_unittest.cc',
             'payload_generator/graph_utils_unittest.cc',
             'payload_generator/inplace_generator_unittest.cc',
-            'payload_generator/payload_signer_unittest.cc',
             'payload_generator/payload_file_unittest.cc',
+            'payload_generator/payload_signer_unittest.cc',
             'payload_generator/tarjan_unittest.cc',
             'payload_generator/topological_sort_unittest.cc',
             'payload_generator/zip_unittest.cc',
             'payload_state_unittest.cc',
-            'postinstall_runner_action_unittest.cc',
-            'prefs_unittest.cc',
-            'subprocess_unittest.cc',
-            'terminator_unittest.cc',
-            'test_utils.cc',
             'update_attempter_unittest.cc',
             'update_manager/boxed_value_unittest.cc',
             'update_manager/chromeos_policy_unittest.cc',
@@ -453,8 +507,6 @@
             'update_manager/umtest_utils.cc',
             'update_manager/update_manager_unittest.cc',
             'update_manager/variable_unittest.cc',
-            'utils_unittest.cc',
-            'xz_extent_writer_unittest.cc',
             # Main entry point for runnning tests.
             'testrunner.cc',
           ],