diff --git a/CHANGES b/CHANGES
index 7f7d0a94a25a6810f48fe516f6deb5e84f4ac4be..02c1539b335652e89fec71e59a430925b5aad6f8 100644
--- a/CHANGES
+++ b/CHANGES
@@ -1,3 +1,7 @@
+0.3.1
+- Fixed incorrect dir name in setup.py
+  [ticket:129]
+
 0.3
 - Python 2.3 support is dropped. [ticket:123]
 
diff --git a/setup.py b/setup.py
index 1da839ddf69d5b7cc467f710d1972bc7e81ff0d1..b54715dc0e9c52ae9eb7cf21e040638150aae1d6 100644
--- a/setup.py
+++ b/setup.py
@@ -44,7 +44,7 @@ SVN version:
       author_email='mike@zzzcomputing.com',
       url='http://www.makotemplates.org/',
       license='MIT',
-      packages=find_packages('.', exclude=['ez_setup', 'examples', 'tests']),
+      packages=find_packages('.', exclude=['examples', 'test']),
       scripts=['scripts/mako-render'],
       tests_require = ['nose >= 0.11'],
       test_suite = "nose.collector",