diff --git a/Makefile.common b/Makefile.common
index 6b79aae1..f752759e 100644
--- a/Makefile.common
+++ b/Makefile.common
@@ -62,8 +62,9 @@ PREFIX_ROOTFS ?= $(PREFIX_FS)/root/
 # Check TARGET, set TARGET_SUFF and include target building options
 include $(MAKES_PATH)/include-target.mk
 
-# setup tools
+# setup tools and sysroot
 include $(MAKES_PATH)/setup-tools.mk
+include $(MAKES_PATH)/setup-sysroot.mk
 
 # add utility functions
 include $(MAKES_PATH)/funcs.mk
@@ -97,12 +98,6 @@ ifneq ($(PROJECT_PATH),)
   CXXFLAGS := -I$(PROJECT_PATH) $(CXXFLAGS)
 endif
 
-# add multilib directory to library search path
-SYSROOT := $(shell $(CC) $(CFLAGS) -print-sysroot)
-MULTILIB_DIR := $(shell $(CC) $(CFLAGS) -print-multi-directory)
-LIBC_INSTALL_DIR := $(SYSROOT)/lib/$(MULTILIB_DIR)
-LDFLAGS += -L$(LIBC_INSTALL_DIR)
-
 # remove local dev path from macros
 CFLAGS += -fmacro-prefix-map=$(dir $(TOPDIR))=
 CXXFLAGS += -fmacro-prefix-map=$(dir $(TOPDIR))=
diff --git a/build-core-armv7a7-imx6ull.sh b/build-core-armv7a7-imx6ull.sh
index 5cba0279..5de39f5c 100755
--- a/build-core-armv7a7-imx6ull.sh
+++ b/build-core-armv7a7-imx6ull.sh
@@ -12,11 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
+make -C "phoenix-rtos-kernel" all
 
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building phoenix-rtos-corelibs"
 make -C "phoenix-rtos-corelibs" all install
diff --git a/build-core-armv7a9-zynq7000.sh b/build-core-armv7a9-zynq7000.sh
index 2c8a76f1..f0fe7818 100755
--- a/build-core-armv7a9-zynq7000.sh
+++ b/build-core-armv7a9-zynq7000.sh
@@ -12,11 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
+make -C "phoenix-rtos-kernel" all
 
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building unity"
 make -C "phoenix-rtos-tests" unity
diff --git a/build-core-armv7m4-stm32l4x6.sh b/build-core-armv7m4-stm32l4x6.sh
index 9d4a404d..3b9b0ae5 100755
--- a/build-core-armv7m4-stm32l4x6.sh
+++ b/build-core-armv7m4-stm32l4x6.sh
@@ -12,11 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
+make -C "phoenix-rtos-kernel" all
 
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building phoenix-rtos-corelibs"
 make -C "phoenix-rtos-corelibs" all install
diff --git a/build-core-armv7m7-imxrt105x.sh b/build-core-armv7m7-imxrt105x.sh
index 80069b34..a57c22ec 100755
--- a/build-core-armv7m7-imxrt105x.sh
+++ b/build-core-armv7m7-imxrt105x.sh
@@ -12,11 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
+make -C "phoenix-rtos-kernel" all
 
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building phoenix-rtos-corelibs"
 make -C "phoenix-rtos-corelibs" all
diff --git a/build-core-armv7m7-imxrt106x.sh b/build-core-armv7m7-imxrt106x.sh
index 035080dd..76672a7e 100755
--- a/build-core-armv7m7-imxrt106x.sh
+++ b/build-core-armv7m7-imxrt106x.sh
@@ -12,8 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
+make -C "phoenix-rtos-kernel" all
+
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building libphoenix"
 make -C "libphoenix" all install
diff --git a/build-core-armv7m7-imxrt117x.sh b/build-core-armv7m7-imxrt117x.sh
index 06c2c19f..1887321d 100755
--- a/build-core-armv7m7-imxrt117x.sh
+++ b/build-core-armv7m7-imxrt117x.sh
@@ -12,11 +12,15 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
 
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+make -C "phoenix-rtos-kernel" all
+
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building phoenix-rtos-corelibs"
 make -C "phoenix-rtos-corelibs" all
diff --git a/build-core-ia32-generic.sh b/build-core-ia32-generic.sh
index 0a2afdbe..64d20cf3 100755
--- a/build-core-ia32-generic.sh
+++ b/build-core-ia32-generic.sh
@@ -12,11 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
+make -C "phoenix-rtos-kernel" all
 
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building phoenix-rtos-corelibs"
 make -C "phoenix-rtos-corelibs" all install
diff --git a/build-core-riscv64-generic.sh b/build-core-riscv64-generic.sh
index 4d2da63e..cf96b32b 100755
--- a/build-core-riscv64-generic.sh
+++ b/build-core-riscv64-generic.sh
@@ -12,13 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
+make -C "phoenix-rtos-kernel" all
 
-KERNEL_MAKECMDGOALS="install-headers"
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
 
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
-
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building phoenix-rtos-corelibs"
 make -C "phoenix-rtos-corelibs" all install
diff --git a/build-core-sparcv8leon3-gr716.sh b/build-core-sparcv8leon3-gr716.sh
index 691be369..d1471f84 100755
--- a/build-core-sparcv8leon3-gr716.sh
+++ b/build-core-sparcv8leon3-gr716.sh
@@ -12,11 +12,14 @@
 set -e
 
 b_log "Building phoenix-rtos-kernel"
-KERNEL_MAKECMDGOALS="install-headers"
-make -C "phoenix-rtos-kernel" $KERNEL_MAKECMDGOALS all
+make -C "phoenix-rtos-kernel" all
 
-b_log "Building libphoenix"
-make -C "libphoenix" all install
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	make -C "phoenix-rtos-kernel" install-headers
+
+	b_log "Building libphoenix"
+	make -C "libphoenix" all install
+fi
 
 b_log "Building phoenix-rtos-corelibs"
 make -C "phoenix-rtos-corelibs" all
diff --git a/build.sh b/build.sh
index 01f48324..53e71f95 100755
--- a/build.sh
+++ b/build.sh
@@ -39,12 +39,24 @@ PREFIX_PROG_STRIPPED="$PREFIX_BUILD/prog.stripped/"
 
 PREFIX_A="$PREFIX_BUILD/lib/"
 PREFIX_H="$PREFIX_BUILD/include/"
+PREFIX_SYSROOT=""  # empty by default (use toolchain sysroot)
 
 PLO_SCRIPT_DIR="$PREFIX_BUILD/plo-scripts"
 
 PREFIX_ROOTFS="$PREFIX_FS/root/"
 : "${PREFIX_ROOTSKEL:="$PREFIX_PROJECT/_fs/root-skel/"}"
 
+
+# LIBPHOENIX_DEVEL_MODE:
+#  - if enabled (y): use project-specific sysroot (PREFIX_SYSROOT) and install kernel headers + compile/install libphoenix
+#  - if disabled (n or not set): use toolchain sysroot, don't install kernel headers, don't compile libphoenix
+#TODO: change default value to 'n' when the toolchain-supplied sysroot will be stable enough
+: "${LIBPHOENIX_DEVEL_MODE:=y}"
+
+if [ "$LIBPHOENIX_DEVEL_MODE" = "y" ]; then
+	PREFIX_SYSROOT="$PREFIX_BUILD/sysroot"
+fi
+
 # Default project's overlay directory, it does not have to exist.
 ROOTFS_OVERLAYS="$PROJECT_PATH/rootfs-overlay:${ROOTFS_OVERLAYS}"
 
@@ -57,7 +69,8 @@ MAKEFLAGS="--no-print-directory -j 9"
 
 export TARGET TARGET_FAMILY TARGET_SUBFAMILY TARGET_PROJECT PROJECT_PATH PREFIX_PROJECT PREFIX_BUILD\
 	PREFIX_BUILD_HOST PREFIX_FS PREFIX_BOOT PREFIX_PROG PREFIX_PROG_STRIPPED PREFIX_A\
-	PREFIX_H PREFIX_ROOTFS CROSS CFLAGS CXXFLAGS LDFLAGS CC LD AR AS MAKEFLAGS DEVICE_FLAGS PLO_SCRIPT_DIR
+	PREFIX_H PREFIX_ROOTFS CROSS CFLAGS CXXFLAGS LDFLAGS CC LD AR AS MAKEFLAGS DEVICE_FLAGS PLO_SCRIPT_DIR\
+	PREFIX_SYSROOT LIBPHOENIX_DEVEL_MODE
 
 # export flags for ports - call make only after all necessary env variables are already set
 EXPORT_CFLAGS="$(make -f phoenix-rtos-build/Makefile.common export-cflags)"
@@ -133,6 +146,15 @@ mkdir -p "$PREFIX_BUILD"
 mkdir -p "$PREFIX_BUILD_HOST"
 mkdir -p "$PREFIX_BOOT"
 mkdir -p "$PREFIX_PROG" "$PREFIX_PROG_STRIPPED"
+
+if [ -n "$PREFIX_SYSROOT" ]; then
+	mkdir -p "$PREFIX_SYSROOT" "$PREFIX_SYSROOT/include" "$PREFIX_SYSROOT/usr"
+
+	# libc includes needs to be accessible by ${SYSROOT}/usr/local/include for C++ headers to work
+	(cd "$PREFIX_SYSROOT/usr" && ln -sfn . local)
+	# see sysroot-setup.mk for next steps in sysroot setup
+fi
+
 if declare -f "b_prepare" > /dev/null; then
 	b_prepare
 fi
diff --git a/makes/setup-sysroot.mk b/makes/setup-sysroot.mk
new file mode 100644
index 00000000..de6ebf27
--- /dev/null
+++ b/makes/setup-sysroot.mk
@@ -0,0 +1,46 @@
+# setting up toolchain sysroot
+# WARN: these compiler options were carefully crafted, think twice before changing them!
+#
+# C++ includes and include-fixed are problematic as they are using #include_next
+# we need to copy them into our sysroot in special paths to ensure they will be searched in order:
+# c++ -> include-fixed -> libc include -> other toolchain paths
+#
+# gcc options helpful in development:  -H (include tree) -v (include paths to be searched)
+# echo "#warning toolchain include" >> $($CC -print-sysroot)/usr/include/stdint.h
+
+# use stamp file to setup sysroot only once regardless of the component being built
+_SYSROOT_STAMPFILE := $(PREFIX_BUILD)/.stamp_sysroot
+
+
+ifneq ($(PREFIX_SYSROOT),)
+  # basic sysroot define, compile-time hardcoded toolchain paths would still be searched (see gcc/cppdefaults.c)
+  SYSROOT_OPTS := --sysroot="$(PREFIX_SYSROOT)/"
+
+  # shouldn't be necessary but without it - we're linking against toolchain crt0.o
+  SYSROOT_OPTS += -B$(PREFIX_SYSROOT)/lib/
+
+  # magically rearranges toolchain paths that sysroot libc subdir would be searched first :)
+  SYSROOT_OPTS += -iprefix "$(PREFIX_SYSROOT)/"
+
+  CFLAGS += $(SYSROOT_OPTS)
+  CXXFLAGS += $(SYSROOT_OPTS)
+
+# WARN: assuming there are no multilib c++ headers
+$(_SYSROOT_STAMPFILE):
+	@mkdir -p $(PREFIX_SYSROOT)/include
+	$(SIL)cp -a "$$($(CC) -print-sysroot)/include/c++" "$(PREFIX_SYSROOT)/include/"
+	$(SIL)cp -a $(shell $(CC) -E -Wp,-v -x c /dev/null 2>&1 | awk '!/ignoring/ && /include-fixed/ {print $0}') "$(PREFIX_SYSROOT)"
+	@touch $@
+
+else
+$(_SYSROOT_STAMPFILE):
+	@mkdir -p $(PREFIX_BUILD)
+	@touch $@
+endif
+
+prepare_sysroot: $(_SYSROOT_STAMPFILE)
+
+# make it an order rule for any build/install target
+all: | prepare_sysroot
+install: | prepare_sysroot
+install-%: | prepare_sysroot
diff --git a/target/host.mk b/target/host.mk
index 1f0c6ac0..6c52e40d 100644
--- a/target/host.mk
+++ b/target/host.mk
@@ -35,3 +35,7 @@ CXXFLAGS := $(CFLAGS)
 # install unstripped binaries in rootfs
 # (cruicial for tests binaries with debug info for meaningful sanitizers info)
 ROOTFS_INSTALL_UNSTRIPPED := y
+
+# don't use sysroot on host
+LIBPHOENIX_DEVEL_MODE := n
+PREFIX_SYSROOT :=