diff --git a/src/libstore/build/local-derivation-goal.cc b/src/libstore/build/local-derivation-goal.cc
index 4b2d67825..7d13f8230 100644
--- a/src/libstore/build/local-derivation-goal.cc
+++ b/src/libstore/build/local-derivation-goal.cc
@@ -668,15 +668,19 @@ void LocalDerivationGoal::startBuilder()
            environment using bind-mounts.  We put it in the Nix store
            so that the build outputs can be moved efficiently from the
            chroot to their final location. */
-        chrootRootDir = worker.store.Store::toRealPath(drvPath) + ".chroot";
-        deletePath(chrootRootDir);
+        chrootParentDir = worker.store.Store::toRealPath(drvPath) + ".chroot";
+        deletePath(chrootParentDir);
 
         /* Clean up the chroot directory automatically. */
-        autoDelChroot = std::make_shared<AutoDelete>(chrootRootDir);
+        autoDelChroot = std::make_shared<AutoDelete>(chrootParentDir);
 
-        printMsg(lvlChatty, "setting up chroot environment in '%1%'", chrootRootDir);
+        printMsg(lvlChatty, "setting up chroot environment in '%1%'", chrootParentDir);
+
+        if (mkdir(chrootParentDir.c_str(), 0700) == -1)
+            throw SysError("cannot create '%s'", chrootRootDir);
+
+        chrootRootDir = chrootParentDir + "/root";
 
-        // FIXME: make this 0700
         if (mkdir(chrootRootDir.c_str(), buildUser && buildUser->getUIDCount() != 1 ? 0755 : 0750) == -1)
             throw SysError("cannot create '%1%'", chrootRootDir);
 
diff --git a/src/libstore/build/local-derivation-goal.hh b/src/libstore/build/local-derivation-goal.hh
index 88152a645..0d005387d 100644
--- a/src/libstore/build/local-derivation-goal.hh
+++ b/src/libstore/build/local-derivation-goal.hh
@@ -65,6 +65,16 @@ struct LocalDerivationGoal : public DerivationGoal
      */
     bool useChroot = false;
 
+    /**
+     * The parent directory of `chrootRootDir`. It has permission 700
+     * and is owned by root to ensure other users cannot mess with
+     * `chrootRootDir`.
+     */
+    Path chrootParentDir;
+
+    /**
+     * The root of the chroot environment.
+     */
     Path chrootRootDir;
 
     /**