diff --git a/classes/cargo.bbclass b/classes/cargo.bbclass
index c321e6b..72e77b0 100644
--- a/classes/cargo.bbclass
+++ b/classes/cargo.bbclass
@@ -15,16 +15,19 @@ BASEDEPENDS_append = " cargo-native"
 DEPENDS_append_class-target = " virtual/${TARGET_PREFIX}rust ${RUSTLIB_DEP}"
 DEPENDS_append_class-native = " rust-native"
 
-# Cargo only supports in-tree builds at the moment
-B = "${S}"
+# Enable build separation
+B = "${WORKDIR}/build"
 
 # In case something fails in the build process, give a bit more feedback on
 # where the issue occured
 export RUST_BACKTRACE = "1"
 
+# Assume there's a Cargo.toml directly in the source directory
+MANIFEST_PATH ??= "${S}/Cargo.toml"
+
 RUSTFLAGS ??= ""
 BUILD_MODE = "${@['--release', ''][d.getVar('DEBUG_BUILD') == '1']}"
-CARGO_BUILD_FLAGS = "-v --target ${HOST_SYS} ${BUILD_MODE}"
+CARGO_BUILD_FLAGS = "-v --target ${HOST_SYS} ${BUILD_MODE} --manifest-path=${MANIFEST_PATH}"
 
 # This is based on the content of CARGO_BUILD_FLAGS and generally will need to
 # change if CARGO_BUILD_FLAGS changes.
diff --git a/classes/cargo_common.bbclass b/classes/cargo_common.bbclass
index e5f9080..7f44970 100644
--- a/classes/cargo_common.bbclass
+++ b/classes/cargo_common.bbclass
@@ -73,6 +73,17 @@ cargo_common_do_configure () {
 		echo "[target.${BUILD_SYS}]" >> ${CARGO_HOME}/config
 		echo "linker = '${RUST_BUILD_CCLD}'" >> ${CARGO_HOME}/config
 	fi
+
+	# Put build output in build directory preferred by bitbake instead of
+	# inside source directory unless they are the same
+	if [ "${B}" != "${S}" ]; then
+		cat <<- EOF >> ${CARGO_HOME}/config
+
+		[build]
+		# Use out of tree build destination to avoid poluting the source tree
+		target-dir = "${B}/target"
+		EOF
+	fi
 }
 
 oe_cargo_fix_env () {
diff --git a/recipes-devtools/cargo/cargo.inc b/recipes-devtools/cargo/cargo.inc
index 6205bc8..29da0d7 100644
--- a/recipes-devtools/cargo/cargo.inc
+++ b/recipes-devtools/cargo/cargo.inc
@@ -29,7 +29,7 @@ do_compile_prepend () {
 
 do_install () {
 	install -d "${D}${bindir}"
-	install -m 755 "${RUSTSRC}/target/${CARGO_TARGET_SUBDIR}/cargo" "${D}${bindir}"
+	install -m 755 "${B}/target/${CARGO_TARGET_SUBDIR}/cargo" "${D}${bindir}"
 }
 
 # Disabled due to incompatibility with libgit2 0.28.x (https://github.com/rust-lang/git2-rs/issues/458, https://bugs.gentoo.org/707746#c1)