diff --git a/CMakeLists.txt b/CMakeLists.txt
index 510c94de4d..c11d61bef6 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -397,33 +397,22 @@ execute_process(COMMAND cmake -E make_directory ${ep_base}/Install/include)
 #=============================================================================
 # external modules
 #
+set(external_module_paths)
 if (NOT EXTERNAL_MODULES_LOCATION STREQUAL "")
 	message(STATUS "External modules: ${EXTERNAL_MODULES_LOCATION}")
-	add_subdirectory("${EXTERNAL_MODULES_LOCATION}/src" external_modules_src)
+	add_subdirectory("${EXTERNAL_MODULES_LOCATION}/src" external_modules)
 
-	set(config_module_list_external_expanded)
 	foreach(external_module ${config_module_list_external})
-		list(APPEND config_module_list_external_expanded
-			${EXTERNAL_MODULES_LOCATION}/src/${external_module})
+		add_subdirectory(${EXTERNAL_MODULES_LOCATION}/src/${external_module} external_modules/${external_module})
+		list(APPEND external_module_paths ${EXTERNAL_MODULES_LOCATION}/src/${external_module})
 	endforeach()
-	set(config_module_list
-		${config_module_list}
-		${config_module_list_external_expanded}
-		)
 endif()
 
 #=============================================================================
 # subdirectories
 #
 foreach(module ${config_module_list})
-	string(REGEX MATCH "^[./]" external_module ${module})
-	if (external_module)
-		STRING(REGEX REPLACE "//" "/" EXT_MODULE ${module})
-		STRING(REGEX REPLACE "/" "__" EXT_MODULE_PREFIX ${EXT_MODULE})
-		add_subdirectory(${module} ${PX4_BINARY_DIR}/${EXT_MODULE_PREFIX})
-	else()
-		add_subdirectory(src/${module})
-	endif()
+	add_subdirectory(src/${module})
 endforeach()
 
 add_subdirectory(src/firmware/${OS})
diff --git a/Makefile b/Makefile
index cda0743d21..edcdcc07d0 100644
--- a/Makefile
+++ b/Makefile
@@ -244,8 +244,8 @@ coverity_scan: posix_sitl_default
 .PHONY: parameters_metadata airframe_metadata module_documentation px4_metadata
 
 parameters_metadata:
-	@python $(SRC_DIR)/Tools/px_process_params.py -s `find $(SRC_DIR)/src -maxdepth 3 -type d` --inject-xml $(SRC_DIR)/Tools/parameters_injected.xml --markdown
-	@python $(SRC_DIR)/Tools/px_process_params.py -s `find $(SRC_DIR)/src -maxdepth 3 -type d` --inject-xml $(SRC_DIR)/Tools/parameters_injected.xml --xml
+	@python $(SRC_DIR)/src/modules/systemlib/param/px_process_params.py -s `find $(SRC_DIR)/src -maxdepth 3 -type d` --inject-xml $(SRC_DIR)/src/modules/systemlib/param/parameters_injected.xml --markdown
+	@python $(SRC_DIR)/src/modules/systemlib/param/px_process_params.py -s `find $(SRC_DIR)/src -maxdepth 3 -type d` --inject-xml $(SRC_DIR)/src/modules/systemlib/param/parameters_injected.xml --xml
 
 airframe_metadata:
 	@python $(SRC_DIR)/Tools/px_process_airframes.py -v -a $(SRC_DIR)/ROMFS/px4fmu_common/init.d --markdown
diff --git a/src/modules/systemlib/param/CMakeLists.txt b/src/modules/systemlib/param/CMakeLists.txt
index e05e979c3c..f223694058 100644
--- a/src/modules/systemlib/param/CMakeLists.txt
+++ b/src/modules/systemlib/param/CMakeLists.txt
@@ -51,7 +51,10 @@ endif()
 set(module_list)
 if (DISABLE_PARAMS_MODULE_SCOPING)
 	# search all directories with .c files (potentially containing parameters)
-	file(GLOB_RECURSE new_list ${PX4_SOURCE_DIR}/src/*.c)
+	file(GLOB_RECURSE new_list
+		${PX4_SOURCE_DIR}/src/*.c
+		${external_module_paths}
+		)
 	foreach(file_path ${new_list})
 		get_filename_component(dir_path ${file_path} PATH)
 		list(APPEND module_list "${dir_path}")
@@ -61,17 +64,21 @@ else()
 	foreach(module ${config_module_list})
 		list(APPEND module_list ${PX4_SOURCE_DIR}/src/${module})
 	endforeach()
+	list(APPEND module_list
+		${external_module_paths}
+		)
 endif()
 
 set(parameters_xml ${PX4_BINARY_DIR}/parameters.xml)
 file(GLOB_RECURSE param_src_files ${PX4_SOURCE_DIR}/src/*params.c)
 add_custom_command(OUTPUT ${parameters_xml}
-	COMMAND ${PYTHON_EXECUTABLE} ${PX4_SOURCE_DIR}/Tools/px_process_params.py
-		-s ${module_list} ${EXTERNAL_MODULES_LOCATION}
-		--board CONFIG_ARCH_${BOARD} --xml --inject-xml
+	COMMAND ${PYTHON_EXECUTABLE} ${CMAKE_CURRENT_SOURCE_DIR}/px_process_params.py
+		--src-path ${module_list}
+		--xml ${parameters_xml}
+		--inject-xml ${CMAKE_CURRENT_SOURCE_DIR}/parameters_injected.xml
 		--overrides ${PARAM_DEFAULT_OVERRIDES}
-	DEPENDS ${param_src_files} ${PX4_SOURCE_DIR}/Tools/px_process_params.py
-	WORKING_DIRECTORY ${PX4_BINARY_DIR}
+		#--verbose
+	DEPENDS ${param_src_files} px_process_params.py parameters_injected.xml
 	COMMENT "Generating parameters.xml"
 )
 add_custom_target(parameters_xml DEPENDS ${parameters_xml})
@@ -82,12 +89,10 @@ add_custom_command(OUTPUT px4_parameters.c px4_parameters.h
 		--xml ${parameters_xml} --dest ${CMAKE_CURRENT_BINARY_DIR}
 	DEPENDS
 		${PX4_BINARY_DIR}/parameters.xml
-		${CMAKE_CURRENT_SOURCE_DIR}/px_generate_params.py
-		${CMAKE_CURRENT_SOURCE_DIR}/templates/px4_parameters.c.jinja
-		${CMAKE_CURRENT_SOURCE_DIR}/templates/px4_parameters.h.jinja
+		px_generate_params.py
+		templates/px4_parameters.c.jinja
+		templates/px4_parameters.h.jinja
 	)
-set_source_files_properties(px4_parameters.c PROPERTIES GENERATED TRUE)
-set_source_files_properties(px4_parameters.h PROPERTIES GENERATED TRUE)
 
 px4_add_module(
 	MODULE modules__systemlib__param
@@ -102,4 +107,3 @@ px4_add_module(
 	DEPENDS
 		platforms__common
 	)
-# vim: set noet ft=cmake fenc=utf-8 ff=unix :
diff --git a/Tools/parameters_injected.xml b/src/modules/systemlib/param/parameters_injected.xml
similarity index 100%
rename from Tools/parameters_injected.xml
rename to src/modules/systemlib/param/parameters_injected.xml
diff --git a/Tools/px4params/README.md b/src/modules/systemlib/param/px4params/README.md
similarity index 100%
rename from Tools/px4params/README.md
rename to src/modules/systemlib/param/px4params/README.md
diff --git a/Tools/px4params/__init__.py b/src/modules/systemlib/param/px4params/__init__.py
similarity index 100%
rename from Tools/px4params/__init__.py
rename to src/modules/systemlib/param/px4params/__init__.py
diff --git a/Tools/px4params/dokuwikiout.py b/src/modules/systemlib/param/px4params/dokuwikiout.py
similarity index 100%
rename from Tools/px4params/dokuwikiout.py
rename to src/modules/systemlib/param/px4params/dokuwikiout.py
diff --git a/Tools/px4params/dokuwikirpc.py b/src/modules/systemlib/param/px4params/dokuwikirpc.py
similarity index 100%
rename from Tools/px4params/dokuwikirpc.py
rename to src/modules/systemlib/param/px4params/dokuwikirpc.py
diff --git a/Tools/px4params/markdownout.py b/src/modules/systemlib/param/px4params/markdownout.py
similarity index 100%
rename from Tools/px4params/markdownout.py
rename to src/modules/systemlib/param/px4params/markdownout.py
diff --git a/Tools/px4params/scope.py b/src/modules/systemlib/param/px4params/scope.py
similarity index 100%
rename from Tools/px4params/scope.py
rename to src/modules/systemlib/param/px4params/scope.py
diff --git a/Tools/px4params/srcparser.py b/src/modules/systemlib/param/px4params/srcparser.py
similarity index 100%
rename from Tools/px4params/srcparser.py
rename to src/modules/systemlib/param/px4params/srcparser.py
diff --git a/Tools/px4params/srcscanner.py b/src/modules/systemlib/param/px4params/srcscanner.py
similarity index 100%
rename from Tools/px4params/srcscanner.py
rename to src/modules/systemlib/param/px4params/srcscanner.py
diff --git a/Tools/px4params/xmlout.py b/src/modules/systemlib/param/px4params/xmlout.py
similarity index 100%
rename from Tools/px4params/xmlout.py
rename to src/modules/systemlib/param/px4params/xmlout.py
diff --git a/Tools/px_process_params.py b/src/modules/systemlib/param/px_process_params.py
similarity index 100%
rename from Tools/px_process_params.py
rename to src/modules/systemlib/param/px_process_params.py