diff --git a/CMakeLists.txt b/CMakeLists.txt
index b3fab59..3a443da 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -40,22 +40,13 @@
     endif()
 endif()
 
-add_library(mbed-core INTERFACE)
+# These targets are made visible here so their source files which
+# are spread in different directories can be referenced and can be linked against
+# by libraries that depend on them.
+add_library(mbed-device_key INTERFACE)
+add_library(mbed-rtos INTERFACE) # Collects source files and flags that are in mbed-os but not mbed-baremetal
+add_library(mbed-core INTERFACE) # Collects source files and flags common to mbed-baremetal and mbed-os
 
-add_library(mbed-os INTERFACE)
-
-target_link_libraries(mbed-os
-    INTERFACE
-        mbed-rtos
-        mbed-core
-)
-
-add_library(mbed-baremetal INTERFACE)
-
-target_link_libraries(mbed-baremetal
-    INTERFACE
-        mbed-core
-)
 # Validate selected C library type
 # The C library type selected has to match the library that the target can support
 if(${CMAKE_CROSSCOMPILING})
@@ -153,13 +144,6 @@
         ${CMAKE_CURRENT_SOURCE_DIR}
 )
 
-# These targets are made visible here so their source files which
-# are spread in different directories can be referenced and can be linked against
-# by libraries that depend on them.
-# TODO CMake: Should the source files be moved?
-add_library(mbed-device_key INTERFACE)
-add_library(mbed-rtos INTERFACE)
-
 # Include targets/ first, because any post-build hook needs to be defined
 # before other parts of Mbed OS can add greentea tests which require
 # mbed_set_post_build().
@@ -187,10 +171,16 @@
     string(TOLOWER ${MBED_TARGET} MBED_TARGET_CONVERTED)
     string(REPLACE "_" "-" MBED_TARGET_CONVERTED ${MBED_TARGET_CONVERTED})
     string(PREPEND MBED_TARGET_CONVERTED "mbed-")
-
-    target_link_libraries(mbed-core INTERFACE ${MBED_TARGET_CONVERTED})
 endif()
 
+# Core Mbed OS library
+# mbed-baremetal contains baremetal sources + target sources + target compile flags.
+# mbed-os will be a superset of mbed-baremetal, also containing the RTOS sources and RTOS flags.
+# Note that many different source files will compile differently depending on if the RTOS is in use.
+# So, it's needed to compile the core sources twice, once for RTOS and once for non-RTOS.
+mbed_create_distro(mbed-baremetal mbed-core ${MBED_TARGET_CONVERTED})
+mbed_create_distro(mbed-os mbed-core mbed-rtos ${MBED_TARGET_CONVERTED})
+
 # Ninja requires to be forced for response files
 if ("${CMAKE_GENERATOR}" MATCHES "Ninja")
     # known issue ARMClang and Ninja with response files for windows
diff --git a/tools/cmake/create_distro.cmake b/tools/cmake/create_distro.cmake
index 2e51801..c4f396b 100644
--- a/tools/cmake/create_distro.cmake
+++ b/tools/cmake/create_distro.cmake
@@ -32,8 +32,7 @@
 # Create a "distribution" of Mbed OS containing the base Mbed and certain modules.
 # This distribution only needs to be compiled once and can be referenced in an arbitrary amount of targets.
 function(mbed_create_distro NAME) # ARGN: modules...
-	add_library(${NAME} OBJECT)
-	mbed_configure_app_target(${NAME})
+	add_library(${NAME} OBJECT EXCLUDE_FROM_ALL)
 
 	# First link as private dependencies
 	target_link_libraries(${NAME} PRIVATE ${ARGN})