diff --git a/src/plugins/qbsprojectmanager/qbsbuildstep.cpp b/src/plugins/qbsprojectmanager/qbsbuildstep.cpp
index e5ddbc42f78..3eb25f9da56 100644
--- a/src/plugins/qbsprojectmanager/qbsbuildstep.cpp
+++ b/src/plugins/qbsprojectmanager/qbsbuildstep.cpp
@@ -262,9 +262,9 @@ bool QbsBuildStep::hasCustomInstallRoot() const
     return m_qbsConfiguration.contains(Constants::QBS_INSTALL_ROOT_KEY);
 }
 
-Utils::FileName QbsBuildStep::installRoot() const
+Utils::FileName QbsBuildStep::installRoot(VariableHandling variableHandling) const
 {
-    Utils::FileName root = Utils::FileName::fromString(m_qbsConfiguration
+    Utils::FileName root = Utils::FileName::fromString(qbsConfiguration(variableHandling)
             .value(Constants::QBS_INSTALL_ROOT_KEY).toString());
     if (root.isNull()) {
         const QbsBuildConfiguration * const bc
@@ -559,6 +559,7 @@ QbsBuildStepConfigWidget::QbsBuildStepConfigWidget(QbsBuildStep *step) :
 
     auto chooser = new Core::VariableChooser(this);
     chooser->addSupportedWidget(m_ui->propertyEdit);
+    chooser->addSupportedWidget(m_ui->installDirChooser->lineEdit());
     m_ui->propertyEdit->setValidationFunction([this](Utils::FancyLineEdit *edit,
                                                      QString *errorMessage) {
         return validateProperties(edit, errorMessage);
@@ -617,7 +618,7 @@ void QbsBuildStepConfigWidget::updateState()
         m_ui->forceProbesCheckBox->setChecked(m_step->forceProbes());
         updatePropertyEdit(m_step->qbsConfiguration(QbsBuildStep::PreserveVariables));
         m_ui->qmlDebuggingLibraryCheckBox->setChecked(m_step->isQmlDebuggingEnabled());
-        m_ui->installDirChooser->setFileName(m_step->installRoot());
+        m_ui->installDirChooser->setFileName(m_step->installRoot(QbsBuildStep::PreserveVariables));
         m_ui->defaultInstallDirCheckBox->setChecked(!m_step->hasCustomInstallRoot());
     }
 
diff --git a/src/plugins/qbsprojectmanager/qbsbuildstep.h b/src/plugins/qbsprojectmanager/qbsbuildstep.h
index 07076439b67..5081b8b96f0 100644
--- a/src/plugins/qbsprojectmanager/qbsbuildstep.h
+++ b/src/plugins/qbsprojectmanager/qbsbuildstep.h
@@ -75,7 +75,7 @@ public:
     bool install() const;
     bool cleanInstallRoot() const;
     bool hasCustomInstallRoot() const;
-    Utils::FileName installRoot() const;
+    Utils::FileName installRoot(VariableHandling variableHandling = ExpandVariables) const;
     int maxJobs() const;
     QString buildVariant() const;