diff --git a/webpack.config.js b/webpack.config.js
index 929e57d71b..089f3fdf1b 100644
--- a/webpack.config.js
+++ b/webpack.config.js
@@ -1,6 +1,8 @@
 var path = require('path');
 var webpack = require('webpack');
 
+var olm_path = path.resolve('./node_modules/olm');
+
 module.exports = {
     module: {
         preLoaders: [
@@ -29,15 +31,36 @@ module.exports = {
             // alias any requires to the react module to the one in our path, otherwise
             // we tend to get the react source included twice when using npm link.
             react: path.resolve('./node_modules/react'),
+
+            // matrix-js-sdk will use olm if it is available,
+            // but does not explicitly depend on it. Pull it
+            // in from node_modules if it's there.
+            olm: olm_path,
         },
     },
     plugins: [
-        new webpack.IgnorePlugin(/^olm/),
         new webpack.DefinePlugin({
             'process.env': {
                 NODE_ENV: JSON.stringify(process.env.NODE_ENV)
             }
-        })
+        }),
+
+        // olm.js includes "require 'fs'", which is never
+        // executed in the browser. Ignore it.
+        new webpack.IgnorePlugin(/^fs$/, /node_modules\/olm$/)
     ],
     devtool: 'source-map'
 };
+
+// ignore olm.js if it's not installed.
+(function() {
+    var fs = require('fs');
+    try {
+        fs.lstatSync(olm_path);
+        console.log("Olm is installed; including it in bundle");
+    } catch (e) {
+        module.exports.plugins.push(
+            new webpack.IgnorePlugin(/^olm$/)
+        );
+    }
+}) ();