diff --git a/icu4c/source/data/makedata.mak b/icu4c/source/data/makedata.mak
index 4e659e16f56..157df5b9c77 100644
--- a/icu4c/source/data/makedata.mak
+++ b/icu4c/source/data/makedata.mak
@@ -129,17 +129,6 @@ ICUTOOLS=$(ICUP)\source\tools
 
 PATH = $(PATH);$(ICUP)\bin
 
-
-# We have to prepare params for pkgdata - to help it find the tools
-!IF "$(CFG)" == "Debug" || "$(CFG)" == "debug"
-!MESSAGE makedata.mak: doing a Debug build.
-PKGOPT=D:$(ICUP)
-!ELSE
-!MESSAGE makedata.mak: doing a Release build.
-PKGOPT=R:$(ICUP)
-!ENDIF
-
-
 # Suffixes for data files
 .SUFFIXES : .ucm .cnv .dll .dat .res .txt .c
 
@@ -249,7 +238,7 @@ ALL : GODATA "$(DLL_OUTPUT)\$(U_ICUDATA_NAME).dll" "$(TESTDATAOUT)\testdata.dat"
 "$(TESTDATAOUT)\testdata.dat": $(ICUDT)ucadata.icu $(TRANSLIT_FILES) $(MISC_FILES) $(RB_FILES) {"$(ICUTOOLS)\genrb\$(CFG)"}genrb.exe
 	@cd "$(TESTDATA)"
 	@echo building testdata...
-	nmake /nologo /f "$(TESTDATA)\testdata.mk" TESTDATA=. ICUTOOLS="$(ICUTOOLS)" PKGOPT="$(PKGOPT)" CFG=$(CFG) TESTDATAOUT="$(TESTDATAOUT)" ICUDATA="$(ICUDATA)" TESTDATABLD="$(TESTDATABLD)"
+	nmake /nologo /f "$(TESTDATA)\testdata.mk" TESTDATA=. ICUTOOLS="$(ICUTOOLS)" ICUP="$(ICUP)" CFG=$(CFG) TESTDATAOUT="$(TESTDATAOUT)" ICUDATA="$(ICUDATA)" TESTDATABLD="$(TESTDATABLD)"
 
 #
 #  Break iterator data files.
@@ -261,10 +250,10 @@ BRK_FILES = $(ICUDT)sent.brk $(ICUDT)char.brk $(ICUDT)line.brk $(ICUDT)word.brk
 #  move the .dll and .lib files to their final destination afterwards.
 #  The $(U_ICUDATA_NAME).lib and $(U_ICUDATA_NAME).exp should already be in the right place due to stubdata.
 #
-"$(DLL_OUTPUT)\$(U_ICUDATA_NAME).dll" : "$(ICUTOOLS)\pkgdata\$(CFG)\pkgdata.exe" $(CNV_FILES) $(BRK_FILES) "$(ICUBLD)\$(ICUDT)uprops.icu" "$(ICUBLD)\$(ICUDT)unames.icu" "$(ICUBLD)\$(ICUDT)pnames.icu" "$(ICUBLD)\$(ICUDT)unorm.icu" "$(ICUBLD)\$(ICUDT)cnvalias.icu" "$(ICUBLD)\$(ICUDT)ucadata.icu" "$(ICUBLD)\$(ICUDT)invuca.icu" "$(ICUBLD)\$(ICUDT)uidna.spp" $(ALL_RES) "$(ICUBLD)\$(ICUDT)icudata.res" "$(ICUP)\source\stubdata\stubdatabuilt.txt"
+"$(DLL_OUTPUT)\$(U_ICUDATA_NAME).dll" : "$(ICUP)\bin\pkgdata.exe" $(CNV_FILES) $(BRK_FILES) "$(ICUBLD)\$(ICUDT)uprops.icu" "$(ICUBLD)\$(ICUDT)unames.icu" "$(ICUBLD)\$(ICUDT)pnames.icu" "$(ICUBLD)\$(ICUDT)unorm.icu" "$(ICUBLD)\$(ICUDT)cnvalias.icu" "$(ICUBLD)\$(ICUDT)ucadata.icu" "$(ICUBLD)\$(ICUDT)invuca.icu" "$(ICUBLD)\$(ICUDT)uidna.spp" $(ALL_RES) "$(ICUBLD)\$(ICUDT)icudata.res" "$(ICUP)\source\stubdata\stubdatabuilt.txt"
 	@echo Building icu data
 	@cd "$(ICUBLD)"
- 	@"$(ICUTOOLS)\pkgdata\$(CFG)\pkgdata" -f -e $(U_ICUDATA_NAME) -v -m dll -c -p $(ICUPKG) -O "$(PKGOPT)" -d "$(ICUBLD)" -s . <<pkgdatain.txt
+ 	@"$(ICUP)\bin\pkgdata" -f -e $(U_ICUDATA_NAME) -v -m dll -c -p $(ICUPKG) -d "$(ICUBLD)" -s . <<pkgdatain.txt
 $(ICUDT)unorm.icu
 $(ICUDT)uprops.icu
 $(ICUDT)pnames.icu
diff --git a/icu4c/source/extra/uconv/makedata.mak b/icu4c/source/extra/uconv/makedata.mak
index 159553c6a50..5e34058ca3e 100644
--- a/icu4c/source/extra/uconv/makedata.mak
+++ b/icu4c/source/extra/uconv/makedata.mak
@@ -37,7 +37,7 @@ CFG=Debug
 !ENDIF
 !MESSAGE ICU path is $(ICUP)
 RESNAME=uconvmsg
-RESDIR=.  #$(ICUP)\..\icuapps\uconv\$(RESNAME)
+RESDIR=.
 RESFILES=resfiles.mk
 ICUDATA=$(ICUP)\data
 
@@ -50,20 +50,6 @@ ICD=$(ICUDATA)^\
 DATA_PATH=$(ICUP)\data^\
 ICUTOOLS=$(ICUP)\bin
 
-# We have to prepare params for pkgdata - to help it find the tools
-!IF "$(CFG)" == "Debug" || "$(CFG)" == "debug"
-PKGOPT=D:$(ICUP)
-!ELSE
-PKGOPT=R:$(ICUP)
-!ENDIF
-
-# This appears in original Microsofts makefiles
-!IF "$(OS)" == "Windows_NT"
-NULL=
-!ELSE
-NULL=nul
-!ENDIF
-
 PATH = $(PATH);$(ICUP)\bin
 
 # Suffixes for data files
@@ -86,41 +72,30 @@ OUTPUT = "$(DLL_OUTPUT)\$(RESNAME).dll"
 OUTPUT = "$(DLL_OUTPUT)\$(RESNAME).lib"
 !ENDIF
 
-ALL : GODATA  $(OUTPUT) GOBACK #$(RESNAME).dat
+ALL : $(OUTPUT)
 	@echo All targets are up to date (mode $(PKGMODE))
 
 
 # invoke pkgdata - static
-"$(DLL_OUTPUT)\$(RESNAME).lib" :  $(RB_FILES) $(RESFILES)
+"$(DLL_OUTPUT)\$(RESNAME).lib" : $(RB_FILES) $(RESFILES)
 	@echo Building $(RESNAME).lib
-	@"$(ICUTOOLS)\pkgdata" -f -v -m static -c -p $(RESNAME) -O "$(PKGOPT)" -d "$(DLL_OUTPUT)" -s "$(RESDIR)" <<pkgdatain.txt
+	@"$(ICUTOOLS)\pkgdata" -f -v -m static -c -p $(RESNAME) -d "$(DLL_OUTPUT)" -s "$(RESDIR)" <<pkgdatain.txt
 $(RB_FILES:.res =.res
 )
 <<KEEP
 
-# utility to send us to the right dir
-GODATA :
-#	cd "$(RESDIR)"
-
-# utility to get us back to the right dir
-GOBACK :
-#	cd "$(RESDIR)\.."
-
 # This is to remove all the data files
 CLEAN :
-	@cd "$(RESDIR)"
-	-@erase "*.res"
-	-@erase "uconvmsg*.*"
-	-@erase "*.obj"
-	-@erase "base*.*"
-	@cd "$(ICUTOOLS)"
     -@erase "$(RB_FILES)"
-    -@"$(ICUTOOLS)\pkgdata" -f --clean -v -m static -c -p $(RESNAME) -O "$(PKGOPT)" -d "$(DLL_OUTPUT)" -s "$(RESDIR)" pkgdatain.txt
+	-@erase "$(RESDIR)\uconvmsg*.*"
+	-@erase "$(CFG)\*uconvmsg*.*"
+    -@"$(ICUTOOLS)\pkgdata" -f --clean -v -m static -c -p $(RESNAME) -d "$(DLL_OUTPUT)" -s "$(RESDIR)" pkgdatain.txt
 
 # Inference rule for creating resource bundles
 .txt.res:
 	@echo Making Resource Bundle files
-        "$(ICUTOOLS)\genrb" -t -p $(RESNAME) -s $(@D) -d $(@D) $(?F)
+	"$(ICUTOOLS)\genrb" -t -p $(RESNAME) -s $(@D) -d $(@D) $(?F)
 
 
 $(RESSRC) : {"$(ICUTOOLS)"}genrb.exe
+
diff --git a/icu4c/source/test/testdata/testdata.mk b/icu4c/source/test/testdata/testdata.mk
index 9b55249fd4b..cbf42371027 100644
--- a/icu4c/source/test/testdata/testdata.mk
+++ b/icu4c/source/test/testdata/testdata.mk
@@ -17,7 +17,7 @@ ALL : "$(TESTDATAOUT)\testdata.dat"
 "$(TESTDATAOUT)\testdata.dat" : "$(TESTDATABLD)\casing.res" "$(TESTDATABLD)\conversion.res" "$(TESTDATABLD)\mc.res" "$(TESTDATABLD)\root.res" "$(TESTDATABLD)\te.res" "$(TESTDATABLD)\te_IN.res" "$(TESTDATABLD)\testaliases.res" "$(TESTDATABLD)\testtypes.res" "$(TESTDATABLD)\testempty.res" "$(TESTDATABLD)\$(TESTDT)iscii.res" "$(TESTDATABLD)\$(TESTDT)idna_rules.res" "$(TESTDATABLD)\DataDrivenCollationTest.res" $(TESTDATABLD)\$(TESTDT)test.icu "$(TESTDATABLD)\$(TESTDT)test1.cnv" "$(TESTDATABLD)\$(TESTDT)test3.cnv" "$(TESTDATABLD)\$(TESTDT)test4.cnv" "$(TESTDATABLD)\$(TESTDT)ibm9027.cnv" "$(TESTDATABLD)\$(TESTDT)nfscsi.spp" "$(TESTDATABLD)\$(TESTDT)nfscss.spp" "$(TESTDATABLD)\$(TESTDT)nfscis.spp" "$(TESTDATABLD)\$(TESTDT)nfsmxs.spp" "$(TESTDATABLD)\$(TESTDT)nfsmxp.spp"
 	@echo Building test data
 	@copy "$(TESTDATABLD)\$(TESTDT)te.res" "$(TESTDATAOUT)\$(TESTDT)nam.typ"
-	@"$(ICUTOOLS)\pkgdata\$(CFG)\pkgdata" -f -v -m common -c -p"$(TESTPKG)"  -O "$(PKGOPT)" -d "$(TESTDATAOUT)" -T "$(TESTDATABLD)" -s "$(TESTDATABLD)" <<
+	@"$(ICUP)\bin\pkgdata" -f -v -m common -c -p"$(TESTPKG)" -d "$(TESTDATAOUT)" -T "$(TESTDATABLD)" -s "$(TESTDATABLD)" <<
 $(TESTDT)casing.res
 $(TESTDT)conversion.res
 $(TESTDT)mc.res
diff --git a/icu4c/source/tools/pkgdata/pkgdata.c b/icu4c/source/tools/pkgdata/pkgdata.c
index d67010b4b17..a19bdee9f87 100644
--- a/icu4c/source/tools/pkgdata/pkgdata.c
+++ b/icu4c/source/tools/pkgdata/pkgdata.c
@@ -155,21 +155,28 @@ main(int argc, char* argv[]) {
         }
 
         if(!options[1].doesOccur) {
-          /* Try to fill in from icu-config or equivalent */
-          fillInMakefileFromICUConfig(&options[1]);
+            /* Try to fill in from icu-config or equivalent */
+            fillInMakefileFromICUConfig(&options[1]);
         }
+#ifdef WIN32
+        else {
+            fprintf(stderr, "Warning: You are using the deprecated -O option\n"
+                            "\tYou can fix this warning by installing pkgdata, gencmn and genccode\n"
+                            "\tinto the same directory and not specifying the -O option to pkgdata.\n");
+        }
+#endif
         
         if(!options[1].doesOccur) {
-          fprintf(stderr, " required parameter is missing: -O is required \n");
-          fprintf(stderr, "Run '%s --help' for help.\n", progname);
-          return 1;
+            fprintf(stderr, " required parameter is missing: -O is required \n");
+            fprintf(stderr, "Run '%s --help' for help.\n", progname);
+            return 1;
         }
-
+        
         if(!options[0].doesOccur) /* -O we already have - don't report it. */
         {
-          fprintf(stderr, " required parameter -p is missing \n");
-          fprintf(stderr, "Run '%s --help' for help.\n", progname);
-          return 1;
+            fprintf(stderr, " required parameter -p is missing \n");
+            fprintf(stderr, "Run '%s --help' for help.\n", progname);
+            return 1;
         }
 
         if(argc == 1) {
@@ -254,33 +261,36 @@ main(int argc, char* argv[]) {
         o.cShortName = csname;
     }
 
+    o.verbose   = options[5].doesOccur;
 #ifdef WIN32 /* format is R:pathtoICU or D:pathtoICU */
     {
         char *pathstuff = (char *)options[1].value;
         if(options[1].value[uprv_strlen(options[1].value)-1] == '\\') {
             pathstuff[uprv_strlen(options[1].value)-1] = '\0';
         }
-        if(*pathstuff == 'R' || *pathstuff == 'D') {
+        if(*pathstuff == PKGDATA_DERIVED_PATH || *pathstuff == 'R' || *pathstuff == 'D') {
             o.options = pathstuff;
             pathstuff++;
             if(*pathstuff == ':') {
                 *pathstuff = '\0';
                 pathstuff++;
             }
-/*            else {
-                fprintf(stderr, "Error: invalid windows build mode, should be R (release) or D (debug).\n", o.mode, progname);
+            else {
+                fprintf(stderr, "Error: invalid windows build mode, should be R (release) or D (debug).\n");
                 return 1;
             }
         } else {
-            fprintf(stderr, "Error: invalid windows build mode, should be R (release) or D (debug).\n", o.mode, progname);
-            return 1;*/
+            fprintf(stderr, "Error: invalid windows build mode, should be R (release) or D (debug).\n");
+            return 1;
         }
         o.icuroot = pathstuff;
+        if (o.verbose) {
+            fprintf(stdout, "# ICUROOT is %s\n", o.icuroot);
+        }
     }
 #else /* on UNIX, we'll just include the file... */
     o.options   = options[1].value;
 #endif
-    o.verbose   = options[5].doesOccur;
     if(options[6].doesOccur) {
         o.comment = U_COPYRIGHT_STRING;
     } else if (options[7].doesOccur) {
@@ -591,58 +601,77 @@ static void loadLists(UPKGOptions *o, UErrorCode *status)
 void fillInMakefileFromICUConfig(UOption *option)
 {
 #if U_HAVE_POPEN
-  FILE *p;
-  size_t n;
-  static char buf[512] = "";
-  static const char cmd[] = "icu-config --incfile";
-
-  if(options[5].doesOccur)
-  {
-    /* informational */
-    fprintf(stderr, "%s: No -O option found, trying '%s'.\n", progname, cmd);
-  }
-
-  p = popen(cmd, "r");
-
-  if(p == NULL)
-  {
-    fprintf(stderr, "%s: icu-config: No icu-config found. (fix PATH or use -O option)\n", progname);
-    return;
-  }
-  
-  n = fread(buf, 1, 511, p);
-
-  pclose(p);
-
-  if(n<=0)
-  {
-    fprintf(stderr,"%s: icu-config: Could not read from icu-config. (fix PATH or use -O option)\n", progname);
-    return;
-  }
-
-  if(buf[strlen(buf)-1]=='\n')
-  {
-    buf[strlen(buf)-1]=0;
-  }
-  
-  if(buf[0] == 0)
-  {
-    fprintf(stderr, "%s: icu-config: invalid response from icu-config (fix PATH or use -O option)\n", progname);
-    return;
-  }
-
-  if(options[5].doesOccur)
-  {
-    /* informational */
-    fprintf(stderr, "%s: icu-config: using '-O %s'\n", progname, buf);
-  }
-  option->value = buf;
-  option->doesOccur = TRUE;
+    FILE *p;
+    size_t n;
+    static char buf[512] = "";
+    static const char cmd[] = "icu-config --incfile";
+    
+    if(options[5].doesOccur)
+    {
+        /* informational */
+        fprintf(stderr, "%s: No -O option found, trying '%s'.\n", progname, cmd);
+    }
+    
+    p = popen(cmd, "r");
+    
+    if(p == NULL)
+    {
+        fprintf(stderr, "%s: icu-config: No icu-config found. (fix PATH or use -O option)\n", progname);
+        return;
+    }
+    
+    n = fread(buf, 1, 511, p);
+    
+    pclose(p);
+    
+    if(n<=0)
+    {
+        fprintf(stderr,"%s: icu-config: Could not read from icu-config. (fix PATH or use -O option)\n", progname);
+        return;
+    }
+    
+    if(buf[strlen(buf)-1]=='\n')
+    {
+        buf[strlen(buf)-1]=0;
+    }
+    
+    if(buf[0] == 0)
+    {
+        fprintf(stderr, "%s: icu-config: invalid response from icu-config (fix PATH or use -O option)\n", progname);
+        return;
+    }
+    
+    if(options[5].doesOccur)
+    {
+        /* informational */
+        fprintf(stderr, "%s: icu-config: using '-O %s'\n", progname, buf);
+    }
+    option->value = buf;
+    option->doesOccur = TRUE;
 #else  /* ! U_HAVE_POPEN */
 
-  /* no popen available */
-  /* Put other OS specific ways to search for the Makefile.inc type 
-     information or else fail.. */
+#ifdef WIN32
+    char tmp[1024];
+    char *fullEXEpath = _fullpath(tmp, progname, sizeof(tmp));
+    char *pathstuff = (char *)options[1].value;
+
+    if (fullEXEpath) {
+        pathstuff = strrchr(fullEXEpath, U_FILE_SEP_CHAR);
+        if (pathstuff) {
+            pathstuff[1] = 0;
+            uprv_memmove(fullEXEpath + 2, fullEXEpath, uprv_strlen(fullEXEpath)+1);
+            fullEXEpath[0] = PKGDATA_DERIVED_PATH;
+            fullEXEpath[1] = ':';
+            option->value = uprv_strdup(fullEXEpath);
+            option->doesOccur = TRUE;
+        }
+    }
+    /* else can't determine the path */
+#endif
+
+    /* no popen available */
+    /* Put other OS specific ways to search for the Makefile.inc type 
+       information or else fail.. */
 
 #endif
 }
diff --git a/icu4c/source/tools/pkgdata/pkgtypes.h b/icu4c/source/tools/pkgdata/pkgtypes.h
index 860c958f80a..0f62407f23c 100644
--- a/icu4c/source/tools/pkgdata/pkgtypes.h
+++ b/icu4c/source/tools/pkgdata/pkgtypes.h
@@ -147,5 +147,6 @@ typedef struct UPKGOptions_
 #define UDATA_CMN_SUFFIX ".dat"
 #define UDATA_CMN_INTERMEDIATE_SUFFIX "_dat"
 
+#define PKGDATA_DERIVED_PATH '\t'
 
 #endif
diff --git a/icu4c/source/tools/pkgdata/winmode.c b/icu4c/source/tools/pkgdata/winmode.c
index 2925392321b..734582ff30a 100644
--- a/icu4c/source/tools/pkgdata/winmode.c
+++ b/icu4c/source/tools/pkgdata/winmode.c
@@ -32,7 +32,8 @@
 #include <stdio.h>
 #include <stdlib.h>
 
-#define WINBUILDMODE (*(o->options)=='R'?"Release":"Debug")
+/*#define WINBUILDMODE (*(o->options)=='R'?"Release":"Debug")*/
+#define CONTAINS_REAL_PATH(o) (*(o->options)==PKGDATA_DERIVED_PATH)
 
 void writeCmnRules(UPKGOptions *o,  FileStream *makefile)
 {
@@ -79,8 +80,14 @@ void pkg_mode_windows(UPKGOptions *o, FileStream *makefile, UErrorCode *status)
     sprintf(tmp2, "ICUROOT=%s\n\n", o->icuroot);
     T_FileStream_writeLine(makefile, tmp2);
 
-    sprintf(tmp2,
-        "GENCMN = $(ICUROOT)%sbin\\gencmn.exe\n", separator);
+    if (CONTAINS_REAL_PATH(o)) {
+        sprintf(tmp2,
+            "GENCMN = $(ICUROOT)%sgencmn.exe\n", separator);
+    }
+    else {
+        sprintf(tmp2,
+            "GENCMN = $(ICUROOT)%sbin\\gencmn.exe\n", separator);
+    }
     T_FileStream_writeLine(makefile, tmp2);
 
     if(isDll) {
@@ -110,8 +117,14 @@ void pkg_mode_windows(UPKGOptions *o, FileStream *makefile, UErrorCode *status)
             );
         T_FileStream_writeLine(makefile, tmp2);
 
-        sprintf(tmp2,
-            "GENCCODE = $(ICUROOT)%sbin\\genccode.exe\n",  separator);
+        if (CONTAINS_REAL_PATH(o)) {
+            sprintf(tmp2,
+                "GENCCODE = $(ICUROOT)%sgenccode.exe\n", separator);
+        }
+        else {
+            sprintf(tmp2,
+                "GENCCODE = $(ICUROOT)%sbin\\genccode.exe\n", separator);
+        }
         T_FileStream_writeLine(makefile, tmp2);
 
         T_FileStream_writeLine(makefile, "\n"
@@ -159,8 +172,15 @@ void pkg_mode_windows(UPKGOptions *o, FileStream *makefile, UErrorCode *status)
             );
         T_FileStream_writeLine(makefile, tmp2);
 
-        sprintf(tmp2,
-            "GENCCODE = $(ICUROOT)%sbin\\genccode.exe\n",  separator);
+
+        if (CONTAINS_REAL_PATH(o)) {
+            sprintf(tmp2,
+                "GENCCODE = $(ICUROOT)%sgenccode.exe\n", separator);
+        }
+        else {
+            sprintf(tmp2,
+                "GENCCODE = $(ICUROOT)%sbin\\genccode.exe\n", separator);
+        }
         T_FileStream_writeLine(makefile, tmp2);
 
         T_FileStream_writeLine(makefile, "\n"