diff --git a/config/pathdef.c.in b/config/pathdef.c.in
index 41950f5ac5..6a8a2b205a 100644
--- a/config/pathdef.c.in
+++ b/config/pathdef.c.in
@@ -3,5 +3,6 @@
 #include "${PROJECT_SOURCE_DIR}/src/nvim/vim.h"
 char *default_vim_dir = "${CMAKE_INSTALL_FULL_DATAROOTDIR}/nvim";
 char *default_vimruntime_dir = "";
+char *default_lib_dir = "${CMAKE_INSTALL_FULL_LIBDIR}/nvim";
 char_u *compiled_user = (char_u *)"${USERNAME}";
 char_u *compiled_sys = (char_u *)"${HOSTNAME}";
diff --git a/src/nvim/globals.h b/src/nvim/globals.h
index 4741778c14..0d419d202c 100644
--- a/src/nvim/globals.h
+++ b/src/nvim/globals.h
@@ -833,6 +833,7 @@ enum {
 #ifdef HAVE_PATHDEF
 extern char *default_vim_dir;
 extern char *default_vimruntime_dir;
+extern char *default_lib_dir;
 extern char_u *compiled_user;
 extern char_u *compiled_sys;
 #endif
diff --git a/src/nvim/option.c b/src/nvim/option.c
index 37c0928d86..15ff8414ce 100644
--- a/src/nvim/option.c
+++ b/src/nvim/option.c
@@ -498,6 +498,24 @@ static inline char *add_dir(char *dest, const char *const dir,
   return dest;
 }
 
+char *get_lib_dir(void)
+{
+  // TODO(bfredl): too fragile? Ideally default_lib_dir would be made empty
+  // in an appimage build
+  if (strlen(default_lib_dir) != 0
+      && os_isdir((const char_u *)default_lib_dir)) {
+    return xstrdup(default_lib_dir);
+  }
+
+  // Find library path relative to the nvim binary: ../lib/nvim/
+  char exe_name[MAXPATHL];
+  vim_get_prefix_from_exepath(exe_name);
+  if (append_path(exe_name, "lib" _PATHSEPSTR "nvim", MAXPATHL) == OK) {
+    return xstrdup(exe_name);
+  }
+  return NULL;
+}
+
 /// Sets &runtimepath to default value.
 ///
 /// Windows: Uses "…/nvim-data" for kXDGDataHome to avoid storing
@@ -508,6 +526,7 @@ static void set_runtimepath_default(void)
   char *const data_home = stdpaths_get_xdg_var(kXDGDataHome);
   char *const config_home = stdpaths_get_xdg_var(kXDGConfigHome);
   char *const vimruntime = vim_getenv("VIMRUNTIME");
+  char *const libdir = get_lib_dir();
   char *const data_dirs = stdpaths_get_xdg_var(kXDGDataDirs);
   char *const config_dirs = stdpaths_get_xdg_var(kXDGConfigDirs);
 #define SITE_SIZE (sizeof("site") - 1)
@@ -515,6 +534,7 @@ static void set_runtimepath_default(void)
   size_t data_len = 0;
   size_t config_len = 0;
   size_t vimruntime_len = 0;
+  size_t libdir_len = 0;
   if (data_home != NULL) {
     data_len = strlen(data_home);
     if (data_len != 0) {
@@ -544,6 +564,12 @@ static void set_runtimepath_default(void)
       rtp_size += vimruntime_len + memcnt(vimruntime, ',', vimruntime_len) + 1;
     }
   }
+  if (libdir != NULL) {
+    libdir_len = strlen(libdir);
+    if (libdir_len != 0) {
+      rtp_size += libdir_len + memcnt(libdir, ',', libdir_len) + 1;
+    }
+  }
   rtp_size += compute_double_colon_len(data_dirs, NVIM_SIZE + 1 + SITE_SIZE + 1,
                                        AFTER_SIZE + 1);
   rtp_size += compute_double_colon_len(config_dirs, NVIM_SIZE + 1,
@@ -562,6 +588,7 @@ static void set_runtimepath_default(void)
                            true);
   rtp_cur = add_dir(rtp_cur, vimruntime, vimruntime_len, kXDGNone,
                     NULL, 0, NULL, 0);
+  rtp_cur = add_dir(rtp_cur, libdir, libdir_len, kXDGNone, NULL, 0, NULL, 0);
   rtp_cur = add_colon_dirs(rtp_cur, data_dirs, "site", SITE_SIZE,
                            "after", AFTER_SIZE, false);
   rtp_cur = add_dir(rtp_cur, data_home, data_len, kXDGDataHome,
@@ -583,6 +610,7 @@ static void set_runtimepath_default(void)
   xfree(data_home);
   xfree(config_home);
   xfree(vimruntime);
+  xfree(libdir);
 }
 
 #undef NVIM_SIZE
diff --git a/src/nvim/os/env.c b/src/nvim/os/env.c
index ec266796a8..082ad58223 100644
--- a/src/nvim/os/env.c
+++ b/src/nvim/os/env.c
@@ -847,6 +847,20 @@ const void *vim_env_iter_rev(const char delim,
   }
 }
 
+
+/// @param[out] exe_name should be at least MAXPATHL in size
+void vim_get_prefix_from_exepath(char *exe_name)
+{
+  // TODO(bfredl): param could have been written as "char exe_name[MAXPATHL]"
+  // but c_grammar.lua does not recognize it (yet).
+  xstrlcpy(exe_name, (char *)get_vim_var_str(VV_PROGPATH),
+           MAXPATHL * sizeof(*exe_name));
+  char *path_end = (char *)path_tail_with_sep((char_u *)exe_name);
+  *path_end = '\0';  // remove the trailing "nvim.exe"
+  path_end = (char *)path_tail((char_u *)exe_name);
+  *path_end = '\0';  // remove the trailing "bin/"
+}
+
 /// Vim getenv() wrapper with special handling of $HOME, $VIM, $VIMRUNTIME,
 /// allowing the user to override the Nvim runtime directory at runtime.
 /// Result must be freed by the caller.
@@ -902,12 +916,7 @@ char *vim_getenv(const char *name)
     char exe_name[MAXPATHL];
     // Find runtime path relative to the nvim binary: ../share/nvim/runtime
     if (vim_path == NULL) {
-      xstrlcpy(exe_name, (char *)get_vim_var_str(VV_PROGPATH),
-               sizeof(exe_name));
-      char *path_end = (char *)path_tail_with_sep((char_u *)exe_name);
-      *path_end = '\0';  // remove the trailing "nvim.exe"
-      path_end = (char *)path_tail((char_u *)exe_name);
-      *path_end = '\0';  // remove the trailing "bin/"
+      vim_get_prefix_from_exepath(exe_name);
       if (append_path(
           exe_name,
           "share" _PATHSEPSTR "nvim" _PATHSEPSTR "runtime" _PATHSEPSTR,
diff --git a/test/functional/options/defaults_spec.lua b/test/functional/options/defaults_spec.lua
index 57e5077989..6de8017434 100644
--- a/test/functional/options/defaults_spec.lua
+++ b/test/functional/options/defaults_spec.lua
@@ -293,6 +293,12 @@ describe('XDG-based defaults', function()
   -- TODO(jkeyes): tests below fail on win32 because of path separator.
   if helpers.pending_win32(pending) then return end
 
+  local function vimruntime_and_libdir()
+    local vimruntime = eval('$VIMRUNTIME')
+    local libdir = string.gsub(vimruntime, "share/nvim/runtime$", "lib/nvim")
+    return vimruntime, libdir
+  end
+
   describe('with too long XDG variables', function()
     before_each(function()
       clear({env={
@@ -308,6 +314,8 @@ describe('XDG-based defaults', function()
     end)
 
     it('are correctly set', function()
+      local vimruntime, libdir = vimruntime_and_libdir()
+
       eq((('/x'):rep(4096) .. '/nvim'
           .. ',' .. ('/a'):rep(2048) .. '/nvim'
           .. ',' .. ('/b'):rep(2048) .. '/nvim'
@@ -316,7 +324,8 @@ describe('XDG-based defaults', function()
           .. ',' .. ('/A'):rep(2048) .. '/nvim/site'
           .. ',' .. ('/B'):rep(2048) .. '/nvim/site'
           .. (',' .. '/C/nvim/site'):rep(512)
-          .. ',' .. eval('$VIMRUNTIME')
+          .. ',' .. vimruntime
+          .. ',' .. libdir
           .. (',' .. '/C/nvim/site/after'):rep(512)
           .. ',' .. ('/B'):rep(2048) .. '/nvim/site/after'
           .. ',' .. ('/A'):rep(2048) .. '/nvim/site/after'
@@ -339,7 +348,8 @@ describe('XDG-based defaults', function()
           .. ',' .. ('/A'):rep(2048) .. '/nvim/site'
           .. ',' .. ('/B'):rep(2048) .. '/nvim/site'
           .. (',' .. '/C/nvim/site'):rep(512)
-          .. ',' .. eval('$VIMRUNTIME')
+          .. ',' .. vimruntime
+          .. ',' .. libdir
           .. (',' .. '/C/nvim/site/after'):rep(512)
           .. ',' .. ('/B'):rep(2048) .. '/nvim/site/after'
           .. ',' .. ('/A'):rep(2048) .. '/nvim/site/after'
@@ -368,11 +378,13 @@ describe('XDG-based defaults', function()
     end)
 
     it('are not expanded', function()
+      local vimruntime, libdir = vimruntime_and_libdir()
       eq(('$XDG_DATA_HOME/nvim'
           .. ',$XDG_DATA_DIRS/nvim'
           .. ',$XDG_CONFIG_HOME/nvim/site'
           .. ',$XDG_CONFIG_DIRS/nvim/site'
-          .. ',' .. eval('$VIMRUNTIME')
+          .. ',' .. vimruntime
+          .. ',' .. libdir
           .. ',$XDG_CONFIG_DIRS/nvim/site/after'
           .. ',$XDG_CONFIG_HOME/nvim/site/after'
           .. ',$XDG_DATA_DIRS/nvim/after'
@@ -387,7 +399,8 @@ describe('XDG-based defaults', function()
           .. ',$XDG_DATA_DIRS/nvim'
           .. ',$XDG_CONFIG_HOME/nvim/site'
           .. ',$XDG_CONFIG_DIRS/nvim/site'
-          .. ',' .. eval('$VIMRUNTIME')
+          .. ',' .. vimruntime
+          .. ',' .. libdir
           .. ',$XDG_CONFIG_DIRS/nvim/site/after'
           .. ',$XDG_CONFIG_HOME/nvim/site/after'
           .. ',$XDG_DATA_DIRS/nvim/after'
@@ -402,7 +415,8 @@ describe('XDG-based defaults', function()
           .. ',$XDG_DATA_DIRS/nvim'
           .. ',$XDG_CONFIG_HOME/nvim/site'
           .. ',$XDG_CONFIG_DIRS/nvim/site'
-          .. ',' .. eval('$VIMRUNTIME')
+          .. ',' .. vimruntime
+          .. ',' .. libdir
           .. ',$XDG_CONFIG_DIRS/nvim/site/after'
           .. ',$XDG_CONFIG_HOME/nvim/site/after'
           .. ',$XDG_DATA_DIRS/nvim/after'
@@ -426,13 +440,15 @@ describe('XDG-based defaults', function()
     end)
 
     it('are escaped properly', function()
+      local vimruntime, libdir = vimruntime_and_libdir()
       eq(('\\, \\, \\,/nvim'
           .. ',\\,-\\,-\\,/nvim'
           .. ',-\\,-\\,-/nvim'
           .. ',\\,=\\,=\\,/nvim/site'
           .. ',\\,≡\\,≡\\,/nvim/site'
           .. ',≡\\,≡\\,≡/nvim/site'
-          .. ',' .. eval('$VIMRUNTIME')
+          .. ',' .. vimruntime
+          .. ',' .. libdir
           .. ',≡\\,≡\\,≡/nvim/site/after'
           .. ',\\,≡\\,≡\\,/nvim/site/after'
           .. ',\\,=\\,=\\,/nvim/site/after'
@@ -451,7 +467,8 @@ describe('XDG-based defaults', function()
           .. ',\\,=\\,=\\,/nvim/site'
           .. ',\\,≡\\,≡\\,/nvim/site'
           .. ',≡\\,≡\\,≡/nvim/site'
-          .. ',' .. eval('$VIMRUNTIME')
+          .. ',' .. vimruntime
+          .. ',' .. libdir
           .. ',≡\\,≡\\,≡/nvim/site/after'
           .. ',\\,≡\\,≡\\,/nvim/site/after'
           .. ',\\,=\\,=\\,/nvim/site/after'