diff --git a/ninja_reclient.py b/ninja_reclient.py
index 2a62888b1..939729e98 100755
--- a/ninja_reclient.py
+++ b/ninja_reclient.py
@@ -58,6 +58,56 @@ def stop_reproxy(reclient_cfg, reclient_bin_dir):
   ])
 
 
+def find_rel_ninja_out_dir(args):
+  # Ninja uses getopt_long, which allow to intermix non-option arguments.
+  # To leave non supported parameters untouched, we do not use getopt.
+  for index, arg in enumerate(args[1:]):
+    if arg == '-C':
+      # + 1 to get the next argument and +1 because we trimmed off args[0]
+      return args[index + 2]
+    if arg.startswith('-C'):
+      # Support -Cout/Default
+      return arg[2:]
+  return '.'
+
+
+def set_reproxy_path_flags(out_dir):
+  """Helper to setup the logs and cache directories for reclient
+
+  Creates the following directory structure:
+  out_dir/
+    .reproxy_tmp/
+      logs/
+      cache/
+
+  The following env vars are set if not already set:
+    RBE_output_dir=out_dir/.reproxy_tmp/logs
+    RBE_proxy_log_dir=out_dir/.reproxy_tmp/logs
+    RBE_log_dir=out_dir/.reproxy_tmp/logs
+    RBE_cache_dir=out_dir/.reproxy_tmp/cache
+  *Nix Only:
+    RBE_server_address=unix://out_dir/.reproxy_tmp/reproxy.sock
+  Windows Only:
+    RBE_server_address=pipe://out_dir/.reproxy_tmp/reproxy.pipe
+  """
+  tmp_dir = os.path.abspath(os.path.join(out_dir, '.reproxy_tmp'))
+  os.makedirs(tmp_dir, exist_ok=True)
+  log_dir = os.path.join(tmp_dir, 'logs')
+  os.makedirs(log_dir, exist_ok=True)
+  os.environ.setdefault("RBE_output_dir", log_dir)
+  os.environ.setdefault("RBE_proxy_log_dir", log_dir)
+  os.environ.setdefault("RBE_log_dir", log_dir)
+  cache_dir = os.path.join(tmp_dir, 'cache')
+  os.makedirs(cache_dir, exist_ok=True)
+  os.environ.setdefault("RBE_cache_dir", cache_dir)
+  if sys.platform.startswith('win'):
+    os.environ.setdefault("RBE_server_address",
+                          "pipe://%s/reproxy.pipe" % tmp_dir)
+  else:
+    os.environ.setdefault("RBE_server_address",
+                          "unix://%s/reproxy.sock" % tmp_dir)
+
+
 def main(argv):
   # If use_remoteexec is set, but the reclient binaries or configs don't
   # exist, display an error message and stop.  Otherwise, the build will
@@ -75,6 +125,11 @@ def main(argv):
            "build with use_goma in place of use_remoteexec for now."),
           file=sys.stderr)
     return 1
+  try:
+    set_reproxy_path_flags(find_rel_ninja_out_dir(argv))
+  except OSError:
+    print("Error creating reproxy_tmp in output dir", file=sys.stderr)
+    return 1
   reproxy_ret_code = start_reproxy(reclient_cfg, reclient_bin_dir)
   if reproxy_ret_code != 0:
     return reproxy_ret_code
diff --git a/tests/ninja_reclient_test.py b/tests/ninja_reclient_test.py
index 6c3b2dc8c..70f8ebc89 100755
--- a/tests/ninja_reclient_test.py
+++ b/tests/ninja_reclient_test.py
@@ -36,6 +36,7 @@ class NinjaReclientTest(trial_dir.TestCase):
     os.chdir(self.previous_dir)
     super(NinjaReclientTest, self).tearDown()
 
+  @unittest.mock.patch.dict(os.environ, {})
   @unittest.mock.patch('subprocess.call', return_value=0)
   @unittest.mock.patch('ninja.main', return_value=0)
   def test_ninja_reclient(self, mock_ninja, mock_call):
@@ -50,6 +51,32 @@ class NinjaReclientTest(trial_dir.TestCase):
 
     self.assertEqual(0, ninja_reclient.main(argv))
 
+    self.assertTrue(
+        os.path.isdir(os.path.join(self.root_dir, "out", "a", ".reproxy_tmp")))
+    self.assertTrue(
+        os.path.isdir(
+            os.path.join(self.root_dir, "out", "a", ".reproxy_tmp", "cache")))
+    self.assertTrue(
+        os.path.isdir(
+            os.path.join(self.root_dir, "out", "a", ".reproxy_tmp", "logs")))
+    self.assertEqual(
+        os.environ.get('RBE_output_dir'),
+        os.path.join(self.root_dir, "out", "a", ".reproxy_tmp", "logs"))
+    self.assertEqual(
+        os.environ.get('RBE_proxy_log_dir'),
+        os.path.join(self.root_dir, "out", "a", ".reproxy_tmp", "logs"))
+    self.assertEqual(
+        os.environ.get('RBE_cache_dir'),
+        os.path.join(self.root_dir, "out", "a", ".reproxy_tmp", "cache"))
+    if sys.platform.startswith('win'):
+      self.assertEqual(
+          os.environ.get('RBE_server_address'), "pipe://%s/reproxy.pipe" %
+          os.path.join(self.root_dir, "out", "a", ".reproxy_tmp"))
+    else:
+      self.assertEqual(
+          os.environ.get('RBE_server_address'), "unix://%s/reproxy.sock" %
+          os.path.join(self.root_dir, "out", "a", ".reproxy_tmp"))
+
     mock_ninja.assert_called_once_with(argv)
     mock_call.assert_has_calls([
         unittest.mock.call([