diff --git a/Makefile b/Makefile
--- a/Makefile
+++ b/Makefile
@@ -137,10 +137,11 @@ i18n/hg.pot: $(PYFILES) $(DOCFILES) i18n
 osx:
 	@which bdist_mpkg >/dev/null || \
 	   (echo "Missing bdist_mpkg (easy_install bdist_mpkg)"; false)
+	rm -rf dist/mercurial-*.mpkg
 	bdist_mpkg setup.py
 	mkdir -p packages/osx
+	N=`cd dist && echo mercurial-*.mpkg | sed 's,\.mpkg$$,,'` && hdiutil create -srcfolder dist/$$N.mpkg/ -scrub -volname "$$N" -ov packages/osx/$$N.dmg
 	rm -rf dist/mercurial-*.mpkg
-	mv dist/mercurial*macosx*.zip packages/osx
 
 fedora:
 	mkdir -p packages/fedora
diff --git a/setup.py b/setup.py
--- a/setup.py
+++ b/setup.py
@@ -583,7 +583,7 @@ setup(name='mercurial',
       cmdclass=cmdclass,
       distclass=hgdist,
       options={'py2exe': {'packages': ['hgext', 'email']},
-               'bdist_mpkg': {'zipdist': True,
+               'bdist_mpkg': {'zipdist': False,
                               'license': 'COPYING',
                               'readme': 'contrib/macosx/Readme.html',
                               'welcome': 'contrib/macosx/Welcome.html',