diff --git a/src/libstore/build.cc b/src/libstore/build.cc
index 4dc10dd09..d10382ef2 100644
--- a/src/libstore/build.cc
+++ b/src/libstore/build.cc
@@ -1377,14 +1377,11 @@ void DerivationGoal::startBuilder()
     tmpDir = createTempDir();
     
     /* Create the state directory where the component can store it's state files place */
-    //TODO
-    
-    //TODO include addDirsBefore ...
-    //if(enableState){ ... 
-    //stateDir = createStateDirs(drv.stateOutputDirs, drv.stateOutputs);
-    //}
-    
-    //TODO create the startupscript
+    //printMsg(lvlError, format("STATE: `%1%'") % );
+    //We only create state dirs when state is enabled and when the dirs need to be created before the installation
+    if(drv.stateOutputs.size() != 0)
+    	if(drv.stateOutputs.find("state")->second.getCreateDirsBeforeInstall())
+	    	createStateDirs(drv.stateOutputDirs, drv.stateOutputs);
 
     /* For convenience, set an environment pointing to the top build
        directory. */
@@ -1616,6 +1613,11 @@ void DerivationGoal::computeClosure()
     map<Path, PathSet> allReferences;
     map<Path, Hash> contentHashes;
     
+    //We create state dirs only when state is enabled and when the dirs need to be created after the installation
+    if(drv.stateOutputs.size() != 0)
+    	if(!drv.stateOutputs.find("state")->second.getCreateDirsBeforeInstall())
+	    	createStateDirs(drv.stateOutputDirs, drv.stateOutputs);
+    
     /* Check whether the output paths were created, and grep each
        output path to determine what other paths it references.  Also make all
        output paths read-only. */
diff --git a/src/libstore/derivations-ast.def b/src/libstore/derivations-ast.def
index 4aff2c6b4..dc13f53c9 100644
--- a/src/libstore/derivations-ast.def
+++ b/src/libstore/derivations-ast.def
@@ -10,15 +10,14 @@ Derive | ATermList ATermList ATermList ATermList ATermList string string ATermLi
 | string string string | ATerm | DerivationStateOutputDir |
 
 #We use DeriveWithOutState to create derivations that dont use state, and thus dont have the stateDerivationStateOutput and DerivationStateOutputDir in their derivation
-#Ive put this in because eelco requested it, and its easy to stay backwards compatible, but ultimately I thinks that it should be removed to prevent confusion & duplication
-
-#!!!!!!!!Change the string "DeriveWithOutState" in derivations.ast-def.cc to "Derive"
-#TODO, make this automatic..
-
-DeriveWithOutState | ATermList ATermList ATermList string string ATermList ATermList | ATerm |
+#Ive put this in because eelco requested it, and its easy to stay backwards compatible, but ultimately I think that it should be removed to prevent confusion & duplication
+#The function will be called matchDerivateWithOutState, but it will match the Derive term to remain backwards compatible
+Derive | ATermList ATermList ATermList string string ATermList ATermList | ATerm | DeriveWithOutState
 | string string | ATerm | EnvBindingWithOutState |
 | string ATermList | ATerm | DerivationInputWithOutState |
 | string string string string | ATerm | DerivationOutputWithOutState |
 
+
+
 Closure | ATermList ATermList | ATerm | OldClosure |
 | string ATermList | ATerm | OldClosureElem |
diff --git a/src/libstore/derivations.hh b/src/libstore/derivations.hh
index f8071bfc7..9fe1d3914 100644
--- a/src/libstore/derivations.hh
+++ b/src/libstore/derivations.hh
@@ -4,6 +4,7 @@
 typedef struct _ATerm * ATerm;
 
 #include "hash.hh"
+#include "util.hh"
 
 #include <map>
 
@@ -55,6 +56,14 @@ struct DerivationStateOutput
         this->synchronization = synchronization;
         this->createDirsBeforeInstall = createDirsBeforeInstall;
     }
+    
+    bool getEnabled(){
+    	return string2bool(enabled);
+    }
+    
+    bool getCreateDirsBeforeInstall(){
+    	return string2bool(createDirsBeforeInstall);
+    }
 };
 
 struct DerivationStateOutputDir
diff --git a/src/libutil/util.cc b/src/libutil/util.cc
index 7c8354846..55e954499 100644
--- a/src/libutil/util.cc
+++ b/src/libutil/util.cc
@@ -974,5 +974,38 @@ string bool2string(const bool b)
       return "false";
 }
 
+bool string2bool(const string & s)
+{
+	if(s == "true")
+	  return true;
+	else if(s == "false")
+      return false;
+    else{
+    	throw Error(format("cannot convert string: `%1%' to bool") % s);
+        quickExit(1);
+    	return false;
+    }
+}
+
+string triml(const string & s) {
+	string news = s;
+	int pos(0);
+	for ( ; news[pos]==' ' || news[pos]=='\t'; ++pos );
+		news.erase(0, pos);
+	return news;
+}
+
+string trimr(const string & s) {
+	string news = s;	
+	int pos(news.size());
+	for ( ; pos && news[pos-1]==' ' || news[pos]=='\t'; --pos );
+		news.erase(pos, news.size()-pos);
+	return news;
+}
+
+string trim(const string & s) {
+	return triml(trimr(s));
+}
+
  
 }
diff --git a/src/libutil/util.hh b/src/libutil/util.hh
index 0af444c6b..d14bbf7d0 100644
--- a/src/libutil/util.hh
+++ b/src/libutil/util.hh
@@ -279,10 +279,18 @@ bool statusOk(int status);
 string int2String(int n);
 bool string2Int(const string & s, int & n);
 
-/* Parse a bool to a string */
+/* Parse a bool to a string and back */
 string bool2string(const bool b);
+bool string2bool(const string & s);
+
+//return modified string s with spaces trimmed from left
+string triml(const string & s);
+//return modified string s with spaces trimmed from right 
+string trimr(const string & s);
+//return modified string s with spaces trimmed from edges
+string trim(const string & s);
+
 
 }
 
-
 #endif /* !__UTIL_H */