diff --git a/libexec/rbenv b/libexec/rbenv
index 4041df82..de7ea692 100755
--- a/libexec/rbenv
+++ b/libexec/rbenv
@@ -71,15 +71,20 @@ shopt -s nullglob
 
 bin_path="$(abs_dirname "$0")"
 for plugin_bin in "${RBENV_ROOT}/plugins/"*/bin; do
-  bin_path="${bin_path}:${plugin_bin}"
+  PATH="${plugin_bin}:${PATH}"
 done
 export PATH="${bin_path}:${PATH}"
 
-hook_path="${RBENV_HOOK_PATH}:${RBENV_ROOT}/rbenv.d:/usr/local/etc/rbenv.d:/etc/rbenv.d:/usr/lib/rbenv/hooks"
+RBENV_HOOK_PATH="${RBENV_HOOK_PATH}:${RBENV_ROOT}/rbenv.d"
+if [ "${bin_path%/*}" != "$RBENV_ROOT" ]; then
+  # Add rbenv's own `rbenv.d` unless rbenv was cloned to RBENV_ROOT
+  RBENV_HOOK_PATH="${RBENV_HOOK_PATH}:${bin_path%/*}/rbenv.d"
+fi
+RBENV_HOOK_PATH="${RBENV_HOOK_PATH}:/usr/local/etc/rbenv.d:/etc/rbenv.d:/usr/lib/rbenv/hooks"
 for plugin_hook in "${RBENV_ROOT}/plugins/"*/etc/rbenv.d; do
-  hook_path="${hook_path}:${plugin_hook}"
+  RBENV_HOOK_PATH="${RBENV_HOOK_PATH}:${plugin_hook}"
 done
-export RBENV_HOOK_PATH="$hook_path"
+export RBENV_HOOK_PATH
 
 shopt -u nullglob
 
diff --git a/libexec/rbenv-realpath.dylib b/libexec/rbenv-realpath.dylib
deleted file mode 100755
index c42aca38..00000000
Binary files a/libexec/rbenv-realpath.dylib and /dev/null differ
diff --git a/rbenv.d/exec/gem-rehash.bash b/rbenv.d/exec/gem-rehash.bash
new file mode 100644
index 00000000..99614b53
--- /dev/null
+++ b/rbenv.d/exec/gem-rehash.bash
@@ -0,0 +1 @@
+export RUBYLIB="${BASH_SOURCE%.bash}:$RUBYLIB"
diff --git a/rbenv.d/exec/gem-rehash/rubygems_plugin.rb b/rbenv.d/exec/gem-rehash/rubygems_plugin.rb
new file mode 100644
index 00000000..e1d7b262
--- /dev/null
+++ b/rbenv.d/exec/gem-rehash/rubygems_plugin.rb
@@ -0,0 +1,18 @@
+hook = lambda do |installer|
+  begin
+    # Ignore gems that aren't installed in locations that rbenv searches for binstubs
+    if installer.spec.executables.any? &&
+        [Gem.default_bindir, Gem.bindir(Gem.user_dir)].include?(installer.bin_dir)
+      system "rbenv", "rehash"
+    end
+  rescue
+    warn "rbenv: error in gem-rehash (#{$!})"
+  end
+end
+
+begin
+  Gem.post_install(&hook)
+  Gem.post_uninstall(&hook)
+rescue
+  warn "rbenv: error installing gem-rehash hooks (#{$!})"
+end
diff --git a/test/libexec/rbenv-echo b/test/libexec/rbenv-echo
index 0a802df4..a94af7bb 100755
--- a/test/libexec/rbenv-echo
+++ b/test/libexec/rbenv-echo
@@ -1,2 +1,9 @@
 #!/usr/bin/env bash
-eval "echo \$$1"
+# Usage: rbenv echo [-F<char>] VAR
+
+if [[ $1 == -F* ]]; then
+  sep="${1:2}"
+  echo "${!2}" | tr "${sep:-:}" $'\n'
+else
+  echo "${!1}"
+fi
diff --git a/test/rbenv.bats b/test/rbenv.bats
index e8a939af..5b52adc1 100644
--- a/test/rbenv.bats
+++ b/test/rbenv.bats
@@ -45,3 +45,31 @@ load test_helper
   assert_failure
   assert_output "rbenv: cannot change working directory to \`$dir'"
 }
+
+@test "adds its own libexec to PATH" {
+  run rbenv echo "PATH"
+  assert_success "${BATS_TEST_DIRNAME%/*}/libexec:$PATH"
+}
+
+@test "adds plugin bin dirs to PATH" {
+  mkdir -p "$RBENV_ROOT"/plugins/ruby-build/bin
+  mkdir -p "$RBENV_ROOT"/plugins/rbenv-each/bin
+  run rbenv echo -F: "PATH"
+  assert_success
+  assert_line 0 "${BATS_TEST_DIRNAME%/*}/libexec"
+  assert_line 1 "${RBENV_ROOT}/plugins/ruby-build/bin"
+  assert_line 2 "${RBENV_ROOT}/plugins/rbenv-each/bin"
+}
+
+@test "RBENV_HOOK_PATH preserves value from environment" {
+  RBENV_HOOK_PATH=/my/hook/path:/other/hooks run rbenv echo -F: "RBENV_HOOK_PATH"
+  assert_success
+  assert_line 0 "/my/hook/path"
+  assert_line 1 "/other/hooks"
+  assert_line 2 "${RBENV_ROOT}/rbenv.d"
+}
+
+@test "RBENV_HOOK_PATH includes rbenv built-in plugins" {
+  run rbenv echo "RBENV_HOOK_PATH"
+  assert_success ":${RBENV_ROOT}/rbenv.d:${BATS_TEST_DIRNAME%/*}/rbenv.d:/usr/local/etc/rbenv.d:/etc/rbenv.d:/usr/lib/rbenv/hooks"
+}