diff --git a/test/functional/test_framework/test_framework.py b/test/functional/test_framework/test_framework.py
--- a/test/functional/test_framework/test_framework.py
+++ b/test/functional/test_framework/test_framework.py
@@ -81,8 +81,6 @@
                             help="Leave bitcoinds and test.* datadir on exit or error")
         parser.add_argument("--noshutdown", dest="noshutdown", default=False, action="store_true",
                             help="Don't stop bitcoinds after the test execution")
-        parser.add_argument("--srcdir", dest="srcdir", default=os.path.abspath(os.path.dirname(os.path.realpath(__file__)) + "/../../../src"),
-                            help="Source directory containing bitcoind/bitcoin-cli (default: %(default)s)")
         parser.add_argument("--cachedir", dest="cachedir", default=os.path.abspath(os.path.dirname(os.path.realpath(__file__)) + "/../../cache"),
                             help="Directory for caching pregenerated datadirs (default: %(default)s)")
         parser.add_argument("--tmpdir", dest="tmpdir",
@@ -112,10 +110,6 @@
 
         PortSeed.n = self.options.port_seed
 
-        os.environ['PATH'] = self.options.srcdir + os.pathsep + \
-            self.options.srcdir + os.path.sep + "qt" + os.pathsep + \
-            os.environ['PATH']
-
         check_json_precision()
 
         self.options.cachedir = os.path.abspath(self.options.cachedir)
@@ -127,6 +121,10 @@
         self.options.bitcoincli = os.getenv(
             "BITCOINCLI", default=config["environment"]["BUILDDIR"] + '/src/bitcoin-cli' + config["environment"]["EXEEXT"])
 
+        os.environ['PATH'] = config['environment']['BUILDDIR'] + os.pathsep + \
+            config['environment']['BUILDDIR'] + os.path.sep + "qt" + os.pathsep + \
+            os.environ['PATH']
+
         # Set up temp directory and start logging
         if self.options.tmpdir:
             self.options.tmpdir = os.path.abspath(self.options.tmpdir)
diff --git a/test/functional/test_runner.py b/test/functional/test_runner.py
--- a/test/functional/test_runner.py
+++ b/test/functional/test_runner.py
@@ -317,8 +317,7 @@
         print("{}WARNING!{} There is a cache directory here: {}. If tests fail unexpectedly, try deleting the cache directory.".format(
             BOLD[1], BOLD[0], cache_dir))
 
-    flags = [os.path.join("--srcdir={}".format(build_dir), "src")] + args
-    flags.append("--cachedir={}".format(cache_dir))
+    flags = ['--cachedir={}'.format(cache_dir)] + args
 
     if enable_coverage:
         coverage = RPCCoverage()