diff --git a/tools/buildman/bsettings.py b/tools/buildman/bsettings.py
index e225ac2ca0f..1be1d45e0fa 100644
--- a/tools/buildman/bsettings.py
+++ b/tools/buildman/bsettings.py
@@ -31,6 +31,9 @@ def setup(fname=''):
 def add_file(data):
     settings.readfp(io.StringIO(data))
 
+def add_section(name):
+    settings.add_section(name)
+
 def get_items(section):
     """Get the items from a section of the config.
 
diff --git a/tools/buildman/test.py b/tools/buildman/test.py
index f92add7a7c5..83219182fe0 100644
--- a/tools/buildman/test.py
+++ b/tools/buildman/test.py
@@ -146,6 +146,7 @@ class TestBuild(unittest.TestCase):
         self.toolchains.Add('arm-linux-gcc', test=False)
         self.toolchains.Add('sparc-linux-gcc', test=False)
         self.toolchains.Add('powerpc-linux-gcc', test=False)
+        self.toolchains.Add('/path/to/aarch64-linux-gcc', test=False)
         self.toolchains.Add('gcc', test=False)
 
         # Avoid sending any output
@@ -747,6 +748,88 @@ class TestBuild(unittest.TestCase):
         self.assertEqual([
             ['MARY="mary"', 'Missing expected line: CONFIG_MARY="mary"']], result)
 
+    def call_make_environment(self, tchn, full_path, in_env=None):
+        """Call Toolchain.MakeEnvironment() and process the result
+
+        Args:
+            tchn (Toolchain): Toolchain to use
+            full_path (bool): True to return the full path in CROSS_COMPILE
+                rather than adding it to the PATH variable
+            in_env (dict): Input environment to use, None to use current env
+
+        Returns:
+            tuple:
+                dict: Changes that MakeEnvironment has made to the environment
+                    key: Environment variable that was changed
+                    value: New value (for PATH this only includes components
+                        which were added)
+                str: Full value of the new PATH variable
+        """
+        env = tchn.MakeEnvironment(full_path, env=in_env)
+
+        # Get the original environment
+        orig_env = dict(os.environb if in_env is None else in_env)
+        orig_path = orig_env[b'PATH'].split(b':')
+
+        # Find new variables
+        diff = dict((k, env[k]) for k in env if orig_env.get(k) != env[k])
+
+        # Find new / different path components
+        diff_path = None
+        new_path = None
+        if b'PATH' in diff:
+            new_path = diff[b'PATH'].split(b':')
+            diff_paths = [p for p in new_path if p not in orig_path]
+            diff_path = b':'.join(p for p in new_path if p not in orig_path)
+            if diff_path:
+                diff[b'PATH'] = diff_path
+            else:
+                del diff[b'PATH']
+        return diff, new_path
+
+    def test_toolchain_env(self):
+        """Test PATH and other environment settings for toolchains"""
+        # Use a toolchain which has a path, so that full_path makes a difference
+        tchn = self.toolchains.Select('aarch64')
+
+        # Normal cases
+        diff = self.call_make_environment(tchn, full_path=False)[0]
+        self.assertEqual(
+            {b'CROSS_COMPILE': b'aarch64-linux-', b'LC_ALL': b'C',
+             b'PATH': b'/path/to'}, diff)
+
+        diff = self.call_make_environment(tchn, full_path=True)[0]
+        self.assertEqual(
+            {b'CROSS_COMPILE': b'/path/to/aarch64-linux-', b'LC_ALL': b'C'},
+            diff)
+
+        # When overriding the toolchain, only LC_ALL should be set
+        tchn.override_toolchain = True
+        diff = self.call_make_environment(tchn, full_path=True)[0]
+        self.assertEqual({b'LC_ALL': b'C'}, diff)
+
+        # Test that virtualenv is handled correctly
+        tchn.override_toolchain = False
+        sys.prefix = '/some/venv'
+        env = dict(os.environb)
+        env[b'PATH'] = b'/some/venv/bin:other/things'
+        tchn.path = '/my/path'
+        diff, diff_path = self.call_make_environment(tchn, False, env)
+
+        self.assertIn(b'PATH', diff)
+        self.assertEqual([b'/some/venv/bin', b'/my/path', b'other/things'],
+                         diff_path)
+        self.assertEqual(
+            {b'CROSS_COMPILE': b'aarch64-linux-', b'LC_ALL': b'C',
+             b'PATH': b'/my/path'}, diff)
+
+        # Handle a toolchain wrapper
+        tchn.path = ''
+        bsettings.add_section('toolchain-wrapper')
+        bsettings.set_item('toolchain-wrapper', 'my-wrapper', 'fred')
+        diff = self.call_make_environment(tchn, full_path=True)[0]
+        self.assertEqual(
+            {b'CROSS_COMPILE': b'fred aarch64-linux-', b'LC_ALL': b'C'}, diff)
 
 if __name__ == "__main__":
     unittest.main()
diff --git a/tools/buildman/toolchain.py b/tools/buildman/toolchain.py
index 79c7c11a110..cd917d8b7eb 100644
--- a/tools/buildman/toolchain.py
+++ b/tools/buildman/toolchain.py
@@ -172,13 +172,14 @@ class Toolchain:
         else:
             raise ValueError('Unknown arg to GetEnvArgs (%d)' % which)
 
-    def MakeEnvironment(self, full_path):
+    def MakeEnvironment(self, full_path, env=None):
         """Returns an environment for using the toolchain.
 
         Thie takes the current environment and adds CROSS_COMPILE so that
         the tool chain will operate correctly. This also disables localized
         output and possibly unicode encoded output of all build tools by
-        adding LC_ALL=C.
+        adding LC_ALL=C. For the case where full_path is False, it prepends
+        the toolchain to PATH
 
         Note that os.environb is used to obtain the environment, since in some
         cases the environment many contain non-ASCII characters and we see
@@ -187,15 +188,21 @@ class Toolchain:
           UnicodeEncodeError: 'utf-8' codec can't encode characters in position
              569-570: surrogates not allowed
 
+        When running inside a Python venv, care is taken not to put the
+        toolchain path before the venv path, so that builds initiated by
+        buildman will still respect the venv.
+
         Args:
             full_path: Return the full path in CROSS_COMPILE and don't set
                 PATH
+            env (dict of bytes): Original environment, used for testing
         Returns:
             Dict containing the (bytes) environment to use. This is based on the
             current environment, with changes as needed to CROSS_COMPILE, PATH
             and LC_ALL.
         """
-        env = dict(os.environb)
+        env = dict(env or os.environb)
+
         wrapper = self.GetWrapper()
 
         if self.override_toolchain:
@@ -206,7 +213,23 @@ class Toolchain:
                 wrapper + os.path.join(self.path, self.cross))
         else:
             env[b'CROSS_COMPILE'] = tools.to_bytes(wrapper + self.cross)
-            env[b'PATH'] = tools.to_bytes(self.path) + b':' + env[b'PATH']
+
+            # Detect a Python virtualenv and avoid defeating it
+            if sys.prefix != sys.base_prefix:
+                paths = env[b'PATH'].split(b':')
+                new_paths = []
+                to_insert = tools.to_bytes(self.path)
+                insert_after = tools.to_bytes(sys.prefix)
+                for path in paths:
+                    new_paths.append(path)
+                    if to_insert and path.startswith(insert_after):
+                        new_paths.append(to_insert)
+                        to_insert = None
+                if to_insert:
+                    new_paths.append(to_insert)
+                env[b'PATH'] = b':'.join(new_paths)
+            else:
+                env[b'PATH'] = tools.to_bytes(self.path) + b':' + env[b'PATH']
 
         env[b'LC_ALL'] = b'C'
 
