diff --git a/libvirt.spec.in b/libvirt.spec.in
index a8b078a827..090f5ee522 100644
--- a/libvirt.spec.in
+++ b/libvirt.spec.in
@@ -566,6 +566,7 @@ rm -f $RPM_BUILD_ROOT%{_libdir}/python*/site-packages/*.la
 rm -f $RPM_BUILD_ROOT%{_libdir}/python*/site-packages/*.a
 
 %if %{with_network}
+install -d -m 0755 $RPM_BUILD_ROOT%{_datadir}/lib/libvirt/dnsmasq/
 # We don't want to install /etc/libvirt/qemu/networks in the main %files list
 # because if the admin wants to delete the default network completely, we don't
 # want to end up re-incarnating it on every RPM upgrade.
@@ -742,6 +743,7 @@ fi
 %if %{with_network}
 %dir %{_localstatedir}/run/libvirt/network/
 %dir %attr(0700, root, root) %{_localstatedir}/lib/libvirt/network/
+%dir %attr(0755, root, root) %{_localstatedir}/lib/libvirt/dnsmasq/
 %endif
 
 %if %{with_qemu}
diff --git a/src/Makefile.am b/src/Makefile.am
index fc64927a1f..d8466f0b1d 100644
--- a/src/Makefile.am
+++ b/src/Makefile.am
@@ -1035,6 +1035,7 @@ if WITH_UML
 endif
 if WITH_NETWORK
 	$(MKDIR_P) "$(DESTDIR)$(localstatedir)/lib/libvirt/network"
+	$(MKDIR_P) "$(DESTDIR)$(localstatedir)/lib/libvirt/dnsmasq"
 	$(MKDIR_P) "$(DESTDIR)$(localstatedir)/run/libvirt/network"
 	$(MKDIR_P) "$(DESTDIR)$(sysconfdir)/libvirt/qemu/networks/autostart"
 	$(INSTALL_DATA) $(srcdir)/network/default.xml \
diff --git a/src/network/bridge_driver.c b/src/network/bridge_driver.c
index 22b3927a2d..132392b81e 100644
--- a/src/network/bridge_driver.c
+++ b/src/network/bridge_driver.c
@@ -62,7 +62,7 @@
 #define NETWORK_PID_DIR LOCAL_STATE_DIR "/run/libvirt/network"
 #define NETWORK_STATE_DIR LOCAL_STATE_DIR "/lib/libvirt/network"
 
-#define DNSMASQ_STATE_DIR LOCAL_STATE_DIR "/lib/libvirt/network"
+#define DNSMASQ_STATE_DIR LOCAL_STATE_DIR "/lib/libvirt/dnsmasq"
 
 #define VIR_FROM_THIS VIR_FROM_NETWORK