diff --git a/cmake/LibraryDefine.cmake b/cmake/LibraryDefine.cmake
index a242ec8519..0e2dbf6c17 100644
--- a/cmake/LibraryDefine.cmake
+++ b/cmake/LibraryDefine.cmake
@@ -27,9 +27,6 @@ function(OPENEXR_DEFINE_LIBRARY libname)
                           PRIVATE cxx_std_${OPENEXR_CXX_STANDARD}
                           INTERFACE cxx_std_11 )
 
-  # we are embedding libdeflate
-  target_include_directories(${objlib} PRIVATE ${EXR_DEFLATE_INCLUDE_DIR})
-
   if(OPENEXR_CURLIB_PRIV_EXPORT AND BUILD_SHARED_LIBS)
     target_compile_definitions(${objlib} PRIVATE ${OPENEXR_CURLIB_PRIV_EXPORT})
     if(WIN32)
diff --git a/cmake/OpenEXRSetup.cmake b/cmake/OpenEXRSetup.cmake
index 7d01362c84..3a446cd157 100644
--- a/cmake/OpenEXRSetup.cmake
+++ b/cmake/OpenEXRSetup.cmake
@@ -160,15 +160,45 @@ set(OPENEXR_DEFLATE_TAG "v1.18" CACHE STRING "Tag to use for libdeflate source r
 if(NOT OPENEXR_FORCE_INTERNAL_DEFLATE)
   #TODO: ^^ Release should not clone from main, this is a place holder
   set(CMAKE_IGNORE_PATH "${CMAKE_CURRENT_BINARY_DIR}/_deps/deflate-src/config;${CMAKE_CURRENT_BINARY_DIR}/_deps/deflate-build/config")
-  include(FindPkgConfig)
-  pkg_check_modules(deflate IMPORTED_TARGET GLOBAL libdeflate)
-  set(CMAKE_IGNORE_PATH)
-  if (deflate_FOUND)
-    message(STATUS "Using libdeflate from ${deflate_LINK_LIBRARIES}")
+  # First try cmake config
+  find_package(libdeflate CONFIG)
+  if(libdeflate_FOUND)
+    if(TARGET libdeflate::libdeflate_shared)
+      set(EXR_DEFLATE_TARGET libdeflate::libdeflate_shared)
+    else()
+      set(EXR_DEFLATE_TARGET libdeflate::libdeflate_static)
+    endif()
+    set(EXR_DEFLATE_SOURCES)
+    set(EXR_DEFLATE_LDFLAGS)
+    # Set EXR_DEFATE_LDFLAGS for OpenEXR.pc.in for static build
+    if(NOT BUILD_SHARED_LIBS)
+      get_target_property(deflate_LIBRARIES ${EXR_DEFLATE_TARGET} LOCATION)
+      set(EXR_DEFLATE_LDFLAGS "-l${deflate_LIBRARIES}")
+    endif()
+    message(STATUS "Using libdeflate from ${libdeflate_DIR}")
+  else()
+    # If not found, try pkgconfig
+    find_package(PkgConfig)
+    if(PKG_CONFIG_FOUND)
+      include(FindPkgConfig)
+      pkg_check_modules(deflate IMPORTED_TARGET GLOBAL libdeflate)
+      if(deflate_FOUND)
+        set(EXR_DEFLATE_TARGET PkgConfig::deflate)
+        set(EXR_DEFLATE_SOURCES)
+        set(EXR_DEFLATE_LDFLAGS)
+        # Set EXR_DEFATE_LDFLAGS for OpenEXR.pc.in for static build
+        if(NOT BUILD_SHARED_LIBS)
+          set(EXR_DEFLATE_LDFLAGS "-l${deflate_LIBRARIES}")
+        endif()
+        message(STATUS "Using libdeflate from ${deflate_LINK_LIBRARIES}")
+      endif()
+    endif()
   endif()
+  set(CMAKE_IGNORE_PATH)
 endif()
 
-if(NOT TARGET PkgConfig::deflate AND NOT deflate_FOUND)
+if(NOT EXR_DEFLATE_TARGET)
+  # Using internal deflate.
   if(OPENEXR_FORCE_INTERNAL_DEFLATE)
     message(STATUS "libdeflate forced internal, installing from ${OPENEXR_DEFLATE_REPO} (${OPENEXR_DEFLATE_TAG})")
   else()
@@ -211,18 +241,10 @@ if(NOT TARGET PkgConfig::deflate AND NOT deflate_FOUND)
   
   # cmake makes fetch content name lowercase for the properties (to deflate)
   list(TRANSFORM EXR_DEFLATE_SOURCES PREPEND ${deflate_SOURCE_DIR}/)
-  set(EXR_DEFLATE_INCLUDE_DIR ${deflate_SOURCE_DIR})
-  set(EXR_DEFLATE_LIB)
-else()
-  set(EXR_DEFLATE_INCLUDE_DIR)
-  set(EXR_DEFLATE_LIB ${deflate_LIBRARIES})
-  # set EXR_DEFATE_LDFLAGS for OpenEXR.pc.in for static build
-  if (BUILD_SHARED_LIBS)
-    set(EXR_DEFLATE_LDFLAGS "")
-  else()
-    set(EXR_DEFLATE_LDFLAGS "-l${deflate_LIBRARIES}")
-  endif()
-  set(EXR_DEFLATE_SOURCES)
+
+  add_library(libdeflate_internal_static STATIC IMPORTED)
+  set_target_properties(libdeflate_internal_static PROPERTIES INTERFACE_INCLUDE_DIRECTORIES "${deflate_SOURCE_DIR}")
+  set(EXR_DEFLATE_TARGET libdeflate_internal_static)
 endif()
 
 #######################################
diff --git a/src/lib/OpenEXRCore/CMakeLists.txt b/src/lib/OpenEXRCore/CMakeLists.txt
index f4bd54efb3..3b209a3a63 100644
--- a/src/lib/OpenEXRCore/CMakeLists.txt
+++ b/src/lib/OpenEXRCore/CMakeLists.txt
@@ -104,10 +104,10 @@ openexr_define_library(OpenEXRCore
     Imath::Imath
   )
 
-if (DEFINED EXR_DEFLATE_LIB)
+if (DEFINED EXR_DEFLATE_TARGET)
   if (BUILD_SHARED_LIBS)
-    target_link_libraries(OpenEXRCore PRIVATE ${EXR_DEFLATE_LIB})
+    target_link_libraries(OpenEXRCore PRIVATE ${EXR_DEFLATE_TARGET})
   else()
-    target_link_libraries(OpenEXRCore PUBLIC ${EXR_DEFLATE_LIB})
+    target_link_libraries(OpenEXRCore PUBLIC ${EXR_DEFLATE_TARGET})
   endif()
 endif()