diff --git a/doc/installation.rst b/doc/installation.rst
index 63d32b9ae..436c8c79f 100644
--- a/doc/installation.rst
+++ b/doc/installation.rst
@@ -95,6 +95,26 @@ versions of Python 2.7 >= 2.7.4 or Python 3.x >= 3.2.4 downloaded from
 python.org. In all cases Xcode must be installed with 'UNIX Development
 Support'.
 
+**Xcode 5.1**: Starting with version 5.1 the version of clang that ships with
+Xcode throws an error when it encounters compiler flags it doesn't recognize.
+This may cause C extension builds to fail with an error similar to::
+
+  clang: error: unknown argument: '-mno-fused-madd' [-Wunused-command-line-argument-hard-error-in-future]
+
+There are workarounds::
+
+  # Apple specified workaround for Xcode 5.1
+  # easy_install
+  $ ARCHFLAGS=-Wno-error=unused-command-line-argument-hard-error-in-future easy_install pymongo
+  # or pip
+  $ ARCHFLAGS=-Wno-error=unused-command-line-argument-hard-error-in-future pip install pymongo
+
+  # Alternative workaround using CFLAGS
+  # easy_install
+  $ CFLAGS=-Qunused-arguments easy_install pymongo
+  # or pip
+  $ CFLAGS=-Qunused-arguments pip install pymongo
+
 Installing from source
 ----------------------
 
diff --git a/setup.py b/setup.py
index 4b8bf0521..4f203b0fc 100755
--- a/setup.py
+++ b/setup.py
@@ -1,5 +1,7 @@
 import glob
 import os
+import platform
+import re
 import subprocess
 import sys
 import warnings
@@ -44,6 +46,22 @@ finally:
 
 PY3 = sys.version_info[0] == 3
 
+# PYTHON-654 - Clang doesn't support -mno-fused-madd but the pythons Apple
+# ships are built with it. This is a problem starting with Xcode 5.1
+# since clang 3.4 errors out when it encounters unrecognized compiler
+# flags. This hack removes -mno-fused-madd from the CFLAGS automatically
+# generated by distutils for Apple provided pythons, allowing C extension
+# builds to complete without error. The inspiration comes from older
+# versions of distutils.sysconfig.get_config_vars.
+if sys.platform == 'darwin' and 'clang' in platform.python_compiler().lower():
+    from distutils.sysconfig import get_config_vars
+    res = get_config_vars()
+    for key in ('CFLAGS', 'PY_CFLAGS'):
+        if key in res:
+            flags = res[key]
+            flags = re.sub('-mno-fused-madd', '', flags)
+            res[key] = flags
+
 nose_config_options = {
     'with-xunit': '1',    # Write out nosetests.xml for CI.
     'py3where': 'build',  # Tell nose where to find tests under PY3.