diff --git a/bin/automake.in b/bin/automake.in
index f19cac7..9198724 100644
--- a/bin/automake.in
+++ b/bin/automake.in
@@ -1208,10 +1208,48 @@ sub handle_languages ()
 		$output_rules .= (subst ('AMDEP_TRUE')
 				  . subst ('am__include')
 				  . ' '
-				  . subst ('am__quote')
-				  . $iter
-				  . subst ('am__quote')
-				  . "\n");
+				  . subst ('am__quote'));
+
+		# Expand any variables used to specify the source file.
+		my $i = 0;
+		while (my @vars = scan_variable_expansions ($iter)) {
+		  # The code in m4/depout.m4 depends on DEPDIR
+		  # being unexpanded.
+		  if (@vars == 1) {
+		    last if ("DEPDIR" eq $vars[0]);
+		  }
+
+		  # Don't repeat indefinitely if a variable is defined
+		  # in terms of itself.
+		  $i++;
+		  if ($i == 10) {
+		   fatal "Source file specified with too deep"
+		   	. "a level of of variable expansion";
+		  }
+		  foreach my $varname (@vars) {
+		      # The code in m4/depout.m4 depends on DEPDIR
+		      # being unexpanded.
+		      next if $varname eq "DEPDIR";
+		      my $var = var $varname;
+		      my ($vardef, $varval);
+
+		      if ($var) {
+			$vardef = $var->def (new Automake::Condition);
+			# Check that the variable is defined unconditionally.
+			if (! $vardef) {
+			    fatal "Variable '$varname' defined conditionally"
+			    . " in specification of source file.\n";
+			}
+		      }
+
+		      $varval = $vardef->value;
+		      $iter =~ s/\$\($varname\)/$varval/g;
+		      $iter =~ s/\${$varname}/$varval/g;
+		  }
+		}
+			
+		$output_rules .= $iter;
+		$output_rules .= (subst ('am__quote') . "\n");
 	    }
 
 	    # Compute the set of directories to remove in distclean-depend.