Here is the builder referenced from Hello's Nix expression (stored in pkgs/applications/misc/hello/ex-1/builder.sh): source $stdenv/setup ① PATH=$perl/bin:$PATH ② tar xvfz $src ③ cd hello-* ./configure --prefix=$out ④ make ⑤ make install The builder can actually be made a lot shorter by using the generic builder functions provided by stdenv, but here we write out the build steps to elucidate what a builder does. It performs the following steps: When Nix runs a builder, it initially completely clears the environment (except for the attributes declared in the derivation). This is done to prevent undeclared inputs from being used in the build process. If for example the PATH contained /usr/bin, then you might accidentally use /usr/bin/gcc. So the first step is to set up the environment. This is done by calling the setup script of the standard environment. The environment variable stdenv points to the location of the standard environment being used. (It wasn't specified explicitly as an attribute in , but mkDerivation adds it automatically.) Since Hello needs Perl, we have to make sure that Perl is in the PATH. The perl environment variable points to the location of the Perl package (since it was passed in as an attribute to the derivation), so $perl/bin is the directory containing the Perl interpreter. Now we have to unpack the sources. The src attribute was bound to the result of fetching the Hello source tarball from the network, so the src environment variable points to the location in the Nix store to which the tarball was downloaded. After unpacking, we cd to the resulting source directory. The whole build is performed in a temporary directory created in /tmp, by the way. This directory is removed after the builder finishes, so there is no need to clean up the sources afterwards. Also, the temporary directory is always newly created, so you don't have to worry about files from previous builds interfering with the current build. GNU Hello is a typical Autoconf-based package, so we first have to run its configure script. In Nix every package is stored in a separate location in the Nix store, for instance /nix/store/9a54ba97fb71b65fda531012d0443ce2-hello-2.1.1. Nix computes this path by cryptographically hashing all attributes of the derivation. The path is passed to the builder through the out environment variable. So here we give configure the parameter --prefix=$out to cause Hello to be installed in the expected location. Finally we build Hello (make) and install it into the location specified by out (make install). If you are wondering about the absence of error checking on the result of various commands called in the builder: this is because the shell script is evaluated with Bash's -e option, which causes the script to be aborted if any command fails without an error check.