diff --git a/scripts/oe-setup-builddir b/scripts/oe-setup-builddir
index d5d8d980d3..adb55c7c38 100755
--- a/scripts/oe-setup-builddir
+++ b/scripts/oe-setup-builddir
@@ -101,7 +101,10 @@ EOM
 
     # Put the abosolute path to the layers in bblayers.conf so we can run
     # bitbake without the init script after the first run
-    sed "s|##COREBASE##|$OEROOT|g" $OECORELAYERCONF > $BUILDDIR/conf/bblayers.conf
+    sed "s|##OEROOT##|$OEROOT|g" $OECORELAYERCONF > $BUILDDIR/conf/bblayers.conf
+    # ##COREBASE## is deprecated as it's meaning was inconsistent, but continue
+    # to replace it for compatibility.
+    sed -i -e "s|##COREBASE##|$OEROOT|g" $BUILDDIR/conf/bblayers.conf
 fi
 
 # Prevent disturbing a new GIT clone in same console