diff --git a/pkgs/applications/editors/neovim/tests/default.nix b/pkgs/applications/editors/neovim/tests/default.nix
index b07f517ea474..c2e6b565de28 100644
--- a/pkgs/applications/editors/neovim/tests/default.nix
+++ b/pkgs/applications/editors/neovim/tests/default.nix
@@ -43,6 +43,14 @@ let
     '';
   };
 
+  nvim-with-luasnip = wrapNeovim2 "-with-lua-packages" (makeNeovimConfig {
+    plugins = [ {
+        plugin = vimPlugins.luasnip;
+
+      }
+    ];
+  });
+
   nvimAutoDisableWrap = makeNeovimConfig { };
 
   wrapNeovim2 = suffix: config:
@@ -281,4 +289,16 @@ rec {
     export HOME=$TMPDIR
     ${nvim_with_opt_plugin}/bin/nvim -i NONE +quit! -e
   '';
+
+  inherit nvim-with-luasnip;
+
+  # check that bringing in one plugin with lua deps makes those deps visible from wrapper
+  # for instance luasnip has a dependency on jsregexp
+  can_require_transitive_deps =
+    runTest nvim-with-luasnip ''
+    export HOME=$TMPDIR
+    cat ${nvim-with-luasnip}/bin/nvim
+    ${nvim-with-luasnip}/bin/nvim -i NONE --cmd "lua require'jsregexp'" -e
+  '';
+
 })
diff --git a/pkgs/applications/editors/neovim/utils.nix b/pkgs/applications/editors/neovim/utils.nix
index 8f9a5b880032..902d62d9486a 100644
--- a/pkgs/applications/editors/neovim/utils.nix
+++ b/pkgs/applications/editors/neovim/utils.nix
@@ -229,12 +229,36 @@ let
         ln -s ${grammar}/parser $out/parser/${name}.so
       '');
 
+  /*
+    Fork of vimUtils.packDir that additionnally generates a propagated-build-inputs-file that
+    can be used by the lua hooks to generate a proper LUA_PATH
+
+    Generates a packpath folder as expected by vim
+       Example:
+       packDir ( {myVimPackage = { start = [ vimPlugins.vim-fugitive ]; opt = []; }; })
+       => "/nix/store/xxxxx-pack-dir"
+  */
+  packDir = packages:
+  let
+    rawPackDir = vimUtils.packDir packages;
+
+  in
+    rawPackDir.override ({
+    postBuild = ''
+      mkdir $out/nix-support
+      for i in $(find -L $out -name propagated-build-inputs ); do
+        cat "$i" >> $out/nix-support/propagated-build-inputs
+      done
+      '';});
+
+
 in
 {
   inherit makeNeovimConfig;
   inherit generateProviderRc;
   inherit legacyWrapper;
   inherit grammarToPlugin;
+  inherit packDir;
 
   inherit buildNeovimPlugin;
   buildNeovimPluginFrom2Nix = lib.warn "buildNeovimPluginFrom2Nix was renamed to buildNeovimPlugin" buildNeovimPlugin;
diff --git a/pkgs/applications/editors/neovim/wrapper.nix b/pkgs/applications/editors/neovim/wrapper.nix
index e877f1e1f764..d86de46c8738 100644
--- a/pkgs/applications/editors/neovim/wrapper.nix
+++ b/pkgs/applications/editors/neovim/wrapper.nix
@@ -13,6 +13,9 @@
 neovim-unwrapped:
 
 let
+  # inherit interpreter from neovim
+  lua = neovim-unwrapped.lua;
+
   wrapper = {
       extraName ? ""
     # should contain all args but the binary. Can be either a string or list
@@ -24,6 +27,8 @@ let
     , withNodeJs ? false
     , withPerl ? false
     , rubyEnv ? null
+
+    # wether to create symlinks in $out/bin/vi(m) -> $out/bin/nvim
     , vimAlias ? false
     , viAlias ? false
 
@@ -45,6 +50,8 @@ let
   stdenv.mkDerivation (finalAttrs:
   let
 
+    finalPackdir = neovimUtils.packDir packpathDirs;
+
     rcContent = ''
       ${luaRcContent}
     '' + lib.optionalString (!isNull neovimRcContent) ''
@@ -57,10 +64,10 @@ let
       # vim accepts a limited number of commands so we join them all
           [
             "--add-flags" ''--cmd "lua ${providerLuaRc}"''
-            # (lib.intersperse "|" hostProviderViml)
-          ] ++ lib.optionals (packpathDirs.myNeovimPackages.start != [] || packpathDirs.myNeovimPackages.opt != []) [
-            "--add-flags" ''--cmd "set packpath^=${vimUtils.packDir packpathDirs}"''
-            "--add-flags" ''--cmd "set rtp^=${vimUtils.packDir packpathDirs}"''
+          ]
+          ++ lib.optionals (packpathDirs.myNeovimPackages.start != [] || packpathDirs.myNeovimPackages.opt != []) [
+            "--add-flags" ''--cmd "set packpath^=${finalPackdir}"''
+            "--add-flags" ''--cmd "set rtp^=${finalPackdir}"''
           ]
           ;
 
@@ -160,7 +167,17 @@ let
       + ''
         rm $out/bin/nvim
         touch $out/rplugin.vim
-        makeWrapper ${lib.escapeShellArgs finalMakeWrapperArgs} ${wrapperArgsStr}
+
+        echo "Looking for lua dependencies..."
+        source ${lua}/nix-support/utils.sh
+
+        _addToLuaPath "${finalPackdir}"
+
+        echo "LUA_PATH towards the end of packdir: $LUA_PATH"
+
+        makeWrapper ${lib.escapeShellArgs finalMakeWrapperArgs} ${wrapperArgsStr} \
+            --prefix LUA_PATH ';' "$LUA_PATH" \
+            --prefix LUA_CPATH ';' "$LUA_CPATH"
       '';
 
     buildPhase = ''
diff --git a/pkgs/development/interpreters/lua-5/interpreter.nix b/pkgs/development/interpreters/lua-5/interpreter.nix
index 7775fa5c8493..497307d57b3f 100644
--- a/pkgs/development/interpreters/lua-5/interpreter.nix
+++ b/pkgs/development/interpreters/lua-5/interpreter.nix
@@ -54,7 +54,7 @@ stdenv.mkDerivation (finalAttrs:
   LuaCPathSearchPaths = luaPackages.luaLib.luaCPathList;
   setupHook = builtins.toFile "lua-setup-hook" ''
       source @out@/nix-support/utils.sh
-      addEnvHooks "$hostOffset" addToLuaPath
+      addEnvHooks "$hostOffset" luaEnvHook
       '';
 
   nativeBuildInputs = [ makeWrapper ];
diff --git a/pkgs/development/interpreters/lua-5/tests/default.nix b/pkgs/development/interpreters/lua-5/tests/default.nix
index c95d11aefc96..768f07cb8400 100644
--- a/pkgs/development/interpreters/lua-5/tests/default.nix
+++ b/pkgs/development/interpreters/lua-5/tests/default.nix
@@ -96,4 +96,17 @@ in
 
       touch $out
     '');
+
+
+    /*
+    Check that a lua package's propagatedBuildInputs end up in LUA_PATH
+    */
+    checkPropagatedBuildInputs = pkgs.runCommandLocal "test-${lua.name}-setup-hook" ({
+      # lua-curl is a propagatedBuildInput of rest-nvim has
+      buildInputs = [ lua.pkgs.rest-nvim ];
+    }) (''
+      ${lua}/bin/lua -e "require'cURL'"
+      touch $out
+    '');
+
 })
diff --git a/pkgs/development/interpreters/lua-5/utils.sh b/pkgs/development/interpreters/lua-5/utils.sh
index 5491f8f7ad2d..2365af08dc9c 100644
--- a/pkgs/development/interpreters/lua-5/utils.sh
+++ b/pkgs/development/interpreters/lua-5/utils.sh
@@ -1,4 +1,8 @@
-#!/bin/sh
+#!/bin/bash
+
+declare -gA luaPathsSeen=()
+
+# shellcheck disable=SC2164,SC2041
 nix_print() {
   if [ ${NIX_DEBUG:-0} -ge $1 ]; then
     echo "$2"
@@ -33,10 +37,16 @@ addToLuaSearchPathWithCustomDelimiter() {
   shopt -u globstar
 }
 
+# used in setup Hooks to load LUA_PATH and LUA_CPATH
+# luaEnvHook
+luaEnvHook() {
+    _addToLuaPath "$1"
+}
+
 addToLuaPath() {
   local dir="$1"
 
-  if [[ ! -d "$dir" ]]; then
+  if [ ! -d "$dir" ]; then
     nix_debug "$dir not a directory abort"
     return 0
   fi
@@ -52,3 +62,74 @@ addToLuaPath() {
   cd - >/dev/null
 }
 
+
+_addToLuaPath() {
+  local dir="$1"
+
+  echo "_addToLuaPath called for dir $dir"
+
+  if [[ ! -d "$dir" ]]; then
+    nix_debug "$dir not a directory abort"
+    return 0
+  fi
+
+# set -x
+  # if [ -n "${pythonPathsSeen[$dir]}" ]; then return; fi
+  if [[ -n "${luaPathsSeen[$dir]:-}" ]]; then
+  # if [ -n "${luaPathsSeen[$dir]}" ]; then
+    echo "$dir already parsed"
+    return
+  fi
+
+  luaPathsSeen["$dir"]=true
+
+  # shellcheck disable=SC2164
+  cd "$dir"
+  for pattern in @luapathsearchpaths@; do
+    addToLuaSearchPathWithCustomDelimiter LUA_PATH "$PWD/$pattern"
+  done
+
+  # LUA_CPATH
+  for pattern in @luacpathsearchpaths@; do
+    addToLuaSearchPathWithCustomDelimiter LUA_CPATH "$PWD/$pattern"
+  done
+
+  cd - >/dev/null
+
+  addToSearchPath program_PATH "$dir"/bin
+
+  # Inspect the propagated inputs (if they exist) and recur on them.
+  local prop="$dir/nix-support/propagated-build-inputs"
+  if [ -e "$prop" ]; then
+    local new_path
+    for new_path in $(cat $prop); do
+        echo "newpath: $new_path"
+        _addToLuaPath "$new_path"
+    done
+  fi
+
+}
+
+# Builds environment variables like LUA_PATH and PATH walking through closure
+# of dependencies.
+buildLuaPath() {
+  local luaPath="$1"
+  local path
+
+  echo "BUILD_LUA_PATH"
+
+#   # set -x
+#   # Create an empty table of paths (see doc on loadFromPropagatedInputs
+#   # for how this is used). Build up the program_PATH and program_LUA_PATH
+#   # variables.
+  # declare -gA luaPathsSeen=()
+#   # shellcheck disable=SC2034
+  program_PATH=
+  luaPathsSeen["@lua@"]=1
+#   addToSearchPath program_PATH @lua@/bin
+  for path in $luaPath; do
+    _addToLuaPath "$path"
+  done
+}
+
+
diff --git a/pkgs/development/interpreters/lua-5/wrap.sh b/pkgs/development/interpreters/lua-5/wrap.sh
index 7d59cf609577..f6868e6faac5 100644
--- a/pkgs/development/interpreters/lua-5/wrap.sh
+++ b/pkgs/development/interpreters/lua-5/wrap.sh
@@ -9,24 +9,6 @@ wrapLuaPrograms() {
   wrapLuaProgramsIn "$out/bin" "$out $luaPath"
 }
 
-# Builds environment variables like LUA_PATH and PATH walking through closure
-# of dependencies.
-buildLuaPath() {
-  local luaPath="$1"
-  local path
-
-  # Create an empty table of paths (see doc on loadFromPropagatedInputs
-  # for how this is used). Build up the program_PATH and program_LUA_PATH
-  # variables.
-  declare -A luaPathsSeen=()
-  program_PATH=
-  luaPathsSeen["@lua@"]=1
-  addToSearchPath program_PATH @lua@/bin
-  for path in $luaPath; do
-    addToLuaPath "$path"
-  done
-}
-
 # with an executable shell script which will set some environment variables
 # and then call into the original binary (which has been given a .wrapped suffix).
 # luaPath is a list of directories
@@ -47,7 +29,6 @@ wrapLuaProgramsIn() {
   # Find all regular files in the output directory that are executable.
   find "$dir" -type f -perm -0100 -print0 | while read -d "" f; do
     # Rewrite "#! .../env lua" to "#! /nix/store/.../lua".
-    # Strip suffix, like "3" or "2.7m" -- we don't have any choice on which
     # Lua to use besides one with this hook anyway.
     if head -n1 "$f" | grep -q '#!.*/env.*\(lua\)'; then
       sed -i "$f" -e "1 s^.*/env[ ]*\(lua\)[^ ]*^#! @executable@^"
@@ -73,28 +54,3 @@ wrapLuaProgramsIn() {
 
   done
 }
-
-# Adds the lib and bin directories to the LUA_PATH and PATH variables,
-# respectively. Recurses on any paths declared in
-# `propagated-native-build-inputs`, while avoiding duplicating paths by
-# flagging the directories it has visited in `luaPathsSeen`.
-loadFromPropagatedInputs() {
-  local dir="$1"
-  # Stop if we've already visited here.
-  if [ -n "${luaPathsSeen[$dir]}" ]; then
-    return
-  fi
-  luaPathsSeen[$dir]=1
-
-  addToLuaPath "$dir"
-  addToSearchPath program_PATH $dir/bin
-
-  # Inspect the propagated inputs (if they exist) and recur on them.
-  local prop="$dir/nix-support/propagated-native-build-inputs"
-  if [ -e "$prop" ]; then
-    local new_path
-    for new_path in $(cat $prop); do
-      loadFromPropagatedInputs "$new_path"
-    done
-  fi
-}
diff --git a/pkgs/development/interpreters/lua-5/wrapper.nix b/pkgs/development/interpreters/lua-5/wrapper.nix
index 07ea75605c0f..6eb94b60360b 100644
--- a/pkgs/development/interpreters/lua-5/wrapper.nix
+++ b/pkgs/development/interpreters/lua-5/wrapper.nix
@@ -30,7 +30,7 @@ let
       fi
       mkdir -p "$out/bin"
 
-      addToLuaPath "$out"
+      buildLuaPath "$out"
 
       # take every binary from lua packages and put them into the env
       for path in ${lib.concatStringsSep " " paths}; do
diff --git a/pkgs/development/interpreters/luajit/default.nix b/pkgs/development/interpreters/luajit/default.nix
index 3b98e8c79014..25f3332b2602 100644
--- a/pkgs/development/interpreters/luajit/default.nix
+++ b/pkgs/development/interpreters/luajit/default.nix
@@ -114,7 +114,7 @@ stdenv.mkDerivation (finalAttrs: {
 
   setupHook = builtins.toFile "lua-setup-hook" ''
       source @out@/nix-support/utils.sh
-      addEnvHooks "$hostOffset" addToLuaPath
+      addEnvHooks "$hostOffset" luaEnvHook
       '';
 
   # copied from python