diff --git a/gnu/packages/compression.scm b/gnu/packages/compression.scm
index 0bb3919cee..a9e942efd5 100644
--- a/gnu/packages/compression.scm
+++ b/gnu/packages/compression.scm
@@ -26,6 +26,7 @@
 
 (define-module (gnu packages compression)
   #:use-module ((guix licenses) #:prefix license:)
+  #:use-module (guix utils)
   #:use-module (guix packages)
   #:use-module (guix download)
   #:use-module (guix git-download)
@@ -232,8 +233,9 @@ decompression.")
     (version "1.1.12")
     (source (origin
              (method url-fetch)
-             (uri (string-append "https://launchpad.net/pbzip2/1.1/" version
-                                "/+download/" name "-" version ".tar.gz"))
+             (uri (string-append "https://launchpad.net/pbzip2/"
+                                 (version-major+minor version) "/" version
+                                 "/+download/" name "-" version ".tar.gz"))
              (sha256
               (base32
                "1vk6065dv3a47p86vmp8hv3n1ygd9hraz0gq89gvzlx7lmcb6fsp"))))
@@ -243,20 +245,17 @@ decompression.")
     (arguments
      `(#:tests? #f ; no tests
        #:phases (modify-phases %standard-phases
-                  (replace 'configure
-                           (lambda* (#:key outputs #:allow-other-keys)
-                                    (substitute* "Makefile"
-                                    (("/usr") (assoc-ref outputs "out")))
-                                    #t)))))
+                  (delete 'configure))
+       #:make-flags (list (string-append "PREFIX=" %output))))
     (home-page "http://compression.ca/pbzip2/")
     (synopsis "Parallel bzip2 implementation")
     (description
      "Pbzip2 is a parallel implementation of the bzip2 block-sorting file
 compressor that uses pthreads and achieves near-linear speedup on SMP machines.
-The output of this version is fully compatible with bzip2 v1.0.2 (ie: anything
+The output of this version is fully compatible with bzip2 v1.0.2 (i.e. anything
 compressed with pbzip2 can be decompressed with bzip2).")
     (license (license:non-copyleft "file://COPYING"
-                                "See COPYING in the distribution."))))
+                                   "See COPYING in the distribution."))))
 
 (define-public xz
   (package