diff --git a/setup.py b/setup.py
--- a/setup.py
+++ b/setup.py
@@ -373,6 +373,15 @@ if os.name == 'nt':
     # form W.X.Y.Z, where W,X,Y,Z are numbers in the range 0..65535
     setupversion = version.split('+', 1)[0]
 
+if sys.platform == 'darwin' and os.path.exists('/usr/bin/xcodebuild'):
+    # XCode 4.0 dropped support for ppc architecture, which is hardcoded in
+    # distutils.sysconfig
+    version = runcmd(['/usr/bin/xcodebuild', '-version'], {}).splitlines()[0]
+    # Also parse only first digit, because 3.2.1 can't be parsed nicely
+    if (version.startswith('Xcode') and
+        int(version.split()[1].split('.')[0]) >= 4):
+        os.environ['ARCHFLAGS'] = '-arch i386 -arch x86_64'
+
 setup(name='mercurial',
       version=setupversion,
       author='Matt Mackall',