diff --git a/Build.py b/Build.py
index 81b879b..1428000 100755
--- a/Build.py
+++ b/Build.py
@@ -126,6 +126,7 @@ class Analysis(Target):
         self.scripts = TOC()
         self.pure = TOC()
         self.binaries = TOC()
+        self.zipfiles = TOC()
         self.__postinit__()
     def check_guts(self, last_build):
         outnm = os.path.basename(self.out)
@@ -164,6 +165,7 @@ class Analysis(Target):
             elif mtime(fnm[:-1]) > last_build:
                 print "building because %s changed" % fnm[:-1]
                 return True
+        # todo: add zipfiles
         for (nm, fnm, typ) in binaries:
             if mtime(fnm) > last_build:
                 print "building because %s changed" % fnm
@@ -207,6 +209,7 @@ class Analysis(Target):
         # Fills pure, binaries and rthookcs lists to TOC
         pure = []     # pure python modules
         binaries = [] # binaries to bundle
+        zipfiles = [] # zipfiles to bundle
         rthooks = []  # rthooks if needed
         for modnm, mod in analyzer.modules.items():
             # FIXME: why can we have a mod == None here?
@@ -220,6 +223,9 @@ class Analysis(Target):
                     fnm = mod.__file__
                     if isinstance(mod, mf.ExtensionModule):
                         binaries.append((mod.__name__, fnm, 'EXTENSION'))
+                    elif isinstance(mod, mf.PkgInZipModule):
+                        zipfiles.append((os.path.basename(str(mod.owner)),
+                                         str(mod.owner), 'ZIPFILE'))
                     elif modnm == '__main__':
                         pass
                     else:
@@ -230,10 +236,12 @@ class Analysis(Target):
         self.scripts = TOC(scripts)
         self.pure = TOC(pure)
         self.binaries = TOC(binaries)
+        self.zipfiles = TOC(zipfiles)
         try: # read .toc
             oldstuff = eval(open(self.out, 'r').read())
         except:
             oldstuff = None
+        # todo: add zipfiles
         if oldstuff != (self.inputs, self.pathex, self.hookspath, self.excludes, scripts, pure, binaries):
             outf = open(self.out, 'w')
             pprint.pprint(
@@ -412,6 +420,7 @@ class PKG(Target):
                  'PKG' : 'a',
                  'DATA': 'x',
                  'BINARY': 'b',
+                 'ZIPFILE': 'Z',
                  'EXECUTABLE': 'b'}
     def __init__(self, toc, name=None, cdict=None, exclude_binaries=0,
                  strip_binaries=0, upx_binaries=0):
@@ -607,7 +616,7 @@ class EXE(Target):
                 exe = exe + '_d'
         return exe
     def assemble(self):
-        print "building EXE", os.path.basename(self.out)
+        print "building EXE from", os.path.basename(self.out)
         trash = []
         outf = open(self.name, 'wb')
         exe = self._bootloader_postfix('support/loader/run')
diff --git a/archive.py b/archive.py
index 2570a95..0e7b7fd 100644
--- a/archive.py
+++ b/archive.py
@@ -71,6 +71,8 @@ else:
 if "-vi" in sys.argv[1:]:
     _verbose = 1
 
+class ArchiveReadError(RuntimeError): pass
+
 class Archive:
     """ A base class for a repository of python code objects.
         The extract method is used by imputil.ArchiveImporter
@@ -106,10 +108,10 @@ class Archive:
         """
         self.lib.seek(self.start)	#default - magic is at start of file
         if self.lib.read(len(self.MAGIC)) != self.MAGIC:
-            raise RuntimeError, "%s is not a valid %s archive file" \
+            raise ArchiveReadError, "%s is not a valid %s archive file" \
               % (self.path, self.__class__.__name__)
         if self.lib.read(len(self.pymagic)) != self.pymagic:
-            raise RuntimeError, "%s has version mismatch to dll" % (self.path)
+            raise ArchiveReadError, "%s has version mismatch to dll" % (self.path)
         self.lib.read(4)
 
     def loadtoc(self):
@@ -372,7 +374,8 @@ class PYZOwner(iu.Owner):
     def __init__(self, path):
         try:
             self.pyz = ZlibArchive(path)
-        except IOError, e:
+            self.pyz.checkmagic()
+        except (IOError, ArchiveReadError), e:
             raise iu.OwnerError(e)
         iu.Owner.__init__(self, path)
     def getmod(self, nm, newmod=imp.new_module):
diff --git a/iu.py b/iu.py
index b8ed788..a1a1cd2 100644
--- a/iu.py
+++ b/iu.py
@@ -33,6 +33,12 @@ try:
 except AttributeError:
     py_version = (1,5)
 
+try:
+    # zipimport is supported starting with Python 2.3
+    import zipimport
+except ImportError:
+    zipimport = None
+
 #=======================Owners==========================#
 # An Owner does imports from a particular piece of turf
 # That is, there's an Owner for each thing on sys.path
@@ -118,10 +124,28 @@ class DirOwner(Owner):
         mod.__co__ = co
         return mod
 
-_globalownertypes = [
+ZipOwner = None
+if zipimport:
+    class ZipOwner(Owner):
+        def __init__(self, path):
+            try:
+                self.__zip = zipimport.zipimporter(path)
+            except zipimport.ZipImportError, e:
+                raise OwnerError('%s: %s' % (e.message, path))
+            Owner.__init__(self, path)
+
+        def getmod(self, nm, newmod=imp.new_module):
+            try:
+                return self.__zip.load_module(nm)
+            except zipimport.ZipImportError:
+                return None
+
+# _mountzlib.py will insert archive.PYZOwner in front later
+_globalownertypes = filter(None, [
+    ZipOwner,
     DirOwner,
     Owner,
-]
+])
 
 #===================Import Directors====================================#
 # ImportDirectors live on the metapath
@@ -428,7 +452,7 @@ class ImportManager:
                 self.setThreaded()
         else:
             sys.modules[fqname] = None
-        #print "..found %s" % mod
+        #print "..found %s" % mod, 'when looking for', fqname
         return mod
     def reloadHook(self, mod):
         fqnm = mod.__name__
diff --git a/mf.py b/mf.py
index 20ca1a4..4154655 100644
--- a/mf.py
+++ b/mf.py
@@ -15,6 +15,11 @@
 # along with this program; if not, write to the Free Software
 # Foundation, Inc., 51 Franklin Street, Fifth Floor, Boston, MA  02110-1301, USA
 import sys, string, os, imp, marshal, dircache
+try:
+    # zipimport is supported starting with Python 2.3
+    import zipimport
+except ImportError:
+    zipimport = None
 
 #=======================Owners==========================#
 # An Owner does imports from a particular piece of turf
@@ -137,11 +142,27 @@ class PYZOwner(Owner):
             return PkgInPYZModule(nm, co, self)
         return PyModule(nm, self.path, co)
 
-_globalownertypes = [
+ZipOwner = None
+if zipimport:
+    class ZipOwner(Owner):
+        def __init__(self, path):
+            print 'ZipOwner', path
+            self.__zip = zipimport.zipimporter(path)
+            Owner.__init__(self, path)
+
+        def getmod(self, nm):
+            try:
+                co = self.__zip.get_code(nm)
+                return PkgInZipModule(nm, co, self)
+            except zipimport.ZipImportError:
+                return None
+
+_globalownertypes = filter(None, [
     DirOwner,
+    ZipOwner,
     PYZOwner,
     Owner,
-]
+])
 
 #===================Import Directors====================================#
 # ImportDirectors live on the metapath
@@ -217,7 +238,8 @@ class RegistryImportDirector(ImportDirector):
                 stuff = open(fnm, 'rb').read()
                 co = loadco(stuff[8:])
             return PyModule(nm, fnm, co)
-        return None
+        return None            
+
 class PathImportDirector(ImportDirector):
     def __init__(self, pathlist=None, importers=None, ownertypes=None):
         if pathlist is None:
@@ -596,6 +618,17 @@ class PkgInPYZModule(PyModule):
         mod = self.owner.getmod(self.__name__ + '.' + nm)
         return mod
 
+class PkgInZipModule(PyModule):
+    typ = 'ZIPFILE'
+    def __init__(self, nm, co, pyzowner):
+        PyModule.__init__(self, nm, co.co_filename, co)
+        self._ispkg = 0
+        self.__path__ = [ str(pyzowner) ]
+        self.owner = pyzowner
+    def doimport(self, nm):
+        mod = self.owner.getmod(self.__name__ + '.' + nm)
+        return mod
+
 #======================== Utility ================================#
 # Scan the code object for imports, __all__ and wierd stuff
 
diff --git a/source/common/launch.c b/source/common/launch.c
index e159b0c..cf12f54 100644
--- a/source/common/launch.c
+++ b/source/common/launch.c
@@ -694,6 +694,28 @@ int installZlib(TOC *ptoc)
 	return 0;
 }
 
+/* Add a zipfile to sys.path from a toc entry
+ * Return non zero on failure
+ */
+int installZipfile(TOC *ptoc)
+{
+	int rc;
+	char *tmpl = "sys.path.append(r\"%s" SEP "%s\")\n";
+	char *cmd = (char *) malloc(strlen(tmpl) + strlen(f_workpath)
+				    + strlen(ptoc->name)+ 10);
+	sprintf(cmd, tmpl, f_workpath, ptoc->name);
+	/*VS(cmd);*/
+	rc = PI_PyRun_SimpleString(cmd);
+	if (rc != 0)
+	{
+		FATALERROR("Error in command: %s\n", cmd);
+		free(cmd);
+		return -1;
+	}
+
+	free(cmd);
+	return 0;
+}
 
 /*
  * Install zlibs 
@@ -704,14 +726,21 @@ int installZlibs()
 	TOC * ptoc;
 	VS("Installing import hooks\n");
 
-	/* Iterate through toc looking for zlibs (type 'z') */
+	/* Iterate through toc looking for zlibs (type 'z') or 
+	 *  zipfiles (type 'Z') 
+	 */
 	ptoc = f_tocbuff;
 	while (ptoc < f_tocend) {
-		if (ptoc->typcd == 'z') 
+		if (ptoc->typcd == 'z')
 		{
 			VS("%s\n", ptoc->name);
 			installZlib(ptoc);
 		}
+		else if (ptoc->typcd == 'Z')
+		{
+			VS("zipfile: %s\n", ptoc->name);
+			installZipfile(ptoc);
+		}
 
 		ptoc = incrementTocPtr(ptoc); 
 	}
@@ -855,7 +884,8 @@ int extract2fs(TOC *ptoc)
 	return 0;
 }
 /*
- * extract all binaries (type 'b') to the filesystem
+ * extract all binaries (type 'b') and zipfiles (type 'Z') 
+ * to the filesystem
  */
 int extractBinaries(char **workpath)
 {
@@ -863,7 +893,7 @@ int extractBinaries(char **workpath)
 	workpath[0] = '\0';
 	VS("Extracting binaries\n");
 	while (ptoc < f_tocend) {
-		if (ptoc->typcd == 'b') 
+		if (ptoc->typcd == 'b' || ptoc->typcd == 'Z')
 		if (extract2fs(ptoc))
 		return -1;
 		ptoc = incrementTocPtr(ptoc);