diff --git a/tools/releasetools/img_from_target_files.py b/tools/releasetools/img_from_target_files.py
index 941ef65..e1105bb 100755
--- a/tools/releasetools/img_from_target_files.py
+++ b/tools/releasetools/img_from_target_files.py
@@ -15,11 +15,18 @@
 # limitations under the License.
 
 """
-Given a target-files zipfile, produces an image zipfile suitable for
-use with 'fastboot update'.
+Given target-files, produces an image zipfile suitable for use
+with 'fastboot update'.
 
 Usage:  img_from_target_files [flags] input_target_files output_image_zip
 
+input_target_files: one of the following:
+  - directory containing extracted target files. It will load info from
+    OTA/android-info.txt and build the image zipfile using images from IMAGES/.
+  - target files package. Same as above, but extracts the archive before
+    building the image zipfile.
+
+Flags:
   -z  (--bootable_zip)
       Include only the bootable images (eg 'boot' and 'recovery') in
       the output.
@@ -76,7 +83,16 @@
 
   common.InitLogging()
 
-  OPTIONS.input_tmp = common.UnzipTemp(args[0], ["IMAGES/*", "OTA/*"])
+  target_files = args[0]
+  if os.path.isdir(target_files):
+    logger.info("Building image zip from extracted target files.")
+    OPTIONS.input_tmp = target_files
+  elif zipfile.is_zipfile(target_files):
+    logger.info("Building image zip from target files zip.")
+    OPTIONS.input_tmp = common.UnzipTemp(args[0], ["IMAGES/*", "OTA/*"])
+  else:
+    raise ValueError("%s is not a valid path." % target_files)
+
   output_zip = zipfile.ZipFile(args[1], "w", compression=zipfile.ZIP_DEFLATED)
   CopyInfo(output_zip)
 
diff --git a/tools/releasetools/merge_target_files.py b/tools/releasetools/merge_target_files.py
index 2e5cbca..0902d90 100755
--- a/tools/releasetools/merge_target_files.py
+++ b/tools/releasetools/merge_target_files.py
@@ -698,6 +698,16 @@
     if output_super_empty:
       shutil.copyfile(super_empty_img, output_super_empty)
 
+  # Create the IMG package from the merged target files (before zipping, in
+  # order to avoid an unnecessary unzip and copy).
+
+  if output_img:
+    img_from_target_files_args = [
+        output_target_files_temp_dir,
+        output_img,
+    ]
+    img_from_target_files.main(img_from_target_files_args)
+
   # Finally, create the output target files zip archive and/or copy the
   # output items to the output target files directory.
 
@@ -751,14 +761,6 @@
     ]
     ota_from_target_files.main(ota_from_target_files_args)
 
-  # Create the IMG package from the merged target files package.
-
-  if output_img:
-    img_from_target_files_args = [
-        output_zip,
-        output_img,
-    ]
-    img_from_target_files.main(img_from_target_files_args)
 
 
 def call_func_with_temp_dir(func, keep_tmp):