diff --git a/tests/pkg/assets/install3/gold/test.gold b/tests/pkg/assets/install3/gold/test.gold
new file mode 100644
index 000000000..09b558757
--- /dev/null
+++ b/tests/pkg/assets/install3/gold/test.gold
@@ -0,0 +1,4 @@
+// Nothing to install.
+==================
+OK
+[pkg, install]
diff --git a/tests/pkg/assets/install3/main.toit b/tests/pkg/assets/install3/main.toit
new file mode 100644
index 000000000..d2ebc0557
--- /dev/null
+++ b/tests/pkg/assets/install3/main.toit
@@ -0,0 +1,4 @@
+// Copyright (C) 2021 Toitware ApS. All rights reserved.
+
+main:
+  print "nothing to do"
diff --git a/tests/pkg/assets/install3/package.yaml b/tests/pkg/assets/install3/package.yaml
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/pkg/assets/install4/gold/test-0.gold b/tests/pkg/assets/install4/gold/test-0.gold
new file mode 100644
index 000000000..69460fb68
--- /dev/null
+++ b/tests/pkg/assets/install4/gold/test-0.gold
@@ -0,0 +1,50 @@
+OK
+[pkg, init]
+==================
+// No package installed yet.
+==================
+exec main.toit
+
+STDERR---
+main.toit:5:8: error: Package for prefix 'pkg4-pre' not found
+import pkg4-pre.pkg4
+       ^~~~~~~~
+main.toit:8:14: error: Unresolved identifier: 'identify'
+  print pkg4.identify
+             ^~~~~~~~
+Compilation failed
+Exit Code: 1
+==================
+exec main2.toit
+
+STDERR---
+main2.toit:5:8: error: Package for prefix 'pkg1' not found
+import pkg1
+       ^~~~
+main2.toit:8:14: error: Unresolved identifier: 'identify'
+  print pkg1.identify
+             ^~~~~~~~
+Compilation failed
+Exit Code: 1
+==================
+// Install pkg4 for 'main.toit', creating/updating a lock file.
+==================
+OK
+[pkg, install, pkg4, --prefix=pkg4_pre]
+Package 'pkg4@4.9.9' installed with prefix 'pkg4'.
+==================
+// main.toit should work now.
+==================
+exec main.toit
+pkg4-4.9.9
+Exit Code: 0
+==================
+OK
+[pkg, install, pkg1]
+Package 'pkg1@1.0.0' installed with prefix 'pkg1'.
+==================
+// main2.toit should also work now.
+==================
+exec main2.toit
+pkg1-1.0.0pkg2-2.4.2pkg3-3.1.2
+Exit Code: 0
diff --git a/tests/pkg/assets/install4/gold/test-1.gold b/tests/pkg/assets/install4/gold/test-1.gold
new file mode 100644
index 000000000..69460fb68
--- /dev/null
+++ b/tests/pkg/assets/install4/gold/test-1.gold
@@ -0,0 +1,50 @@
+OK
+[pkg, init]
+==================
+// No package installed yet.
+==================
+exec main.toit
+
+STDERR---
+main.toit:5:8: error: Package for prefix 'pkg4-pre' not found
+import pkg4-pre.pkg4
+       ^~~~~~~~
+main.toit:8:14: error: Unresolved identifier: 'identify'
+  print pkg4.identify
+             ^~~~~~~~
+Compilation failed
+Exit Code: 1
+==================
+exec main2.toit
+
+STDERR---
+main2.toit:5:8: error: Package for prefix 'pkg1' not found
+import pkg1
+       ^~~~
+main2.toit:8:14: error: Unresolved identifier: 'identify'
+  print pkg1.identify
+             ^~~~~~~~
+Compilation failed
+Exit Code: 1
+==================
+// Install pkg4 for 'main.toit', creating/updating a lock file.
+==================
+OK
+[pkg, install, pkg4, --prefix=pkg4_pre]
+Package 'pkg4@4.9.9' installed with prefix 'pkg4'.
+==================
+// main.toit should work now.
+==================
+exec main.toit
+pkg4-4.9.9
+Exit Code: 0
+==================
+OK
+[pkg, install, pkg1]
+Package 'pkg1@1.0.0' installed with prefix 'pkg1'.
+==================
+// main2.toit should also work now.
+==================
+exec main2.toit
+pkg1-1.0.0pkg2-2.4.2pkg3-3.1.2
+Exit Code: 0
diff --git a/tests/pkg/assets/install4/main.toit b/tests/pkg/assets/install4/main.toit
new file mode 100644
index 000000000..1261ff701
--- /dev/null
+++ b/tests/pkg/assets/install4/main.toit
@@ -0,0 +1,8 @@
+// Copyright (C) 2025 Toit contributors.
+// Use of this source code is governed by a Zero-Clause BSD license that can
+// be found in the tests/LICENSE file.
+
+import pkg4-pre.pkg4
+
+main:
+  print pkg4.identify
diff --git a/tests/pkg/assets/install4/main2.toit b/tests/pkg/assets/install4/main2.toit
new file mode 100644
index 000000000..639920025
--- /dev/null
+++ b/tests/pkg/assets/install4/main2.toit
@@ -0,0 +1,8 @@
+// Copyright (C) 2025 Toit contributors.
+// Use of this source code is governed by a Zero-Clause BSD license that can
+// be found in the tests/LICENSE file.
+
+import pkg1
+
+main:
+  print pkg1.identify
diff --git a/tests/pkg/install3-gold-test.toit b/tests/pkg/install3-gold-test.toit
new file mode 100644
index 000000000..515c9c3a6
--- /dev/null
+++ b/tests/pkg/install3-gold-test.toit
@@ -0,0 +1,14 @@
+// Copyright (C) 2025 Toit contributors.
+// Use of this source code is governed by a Zero-Clause BSD license that can
+// be found in the tests/LICENSE file.
+
+import .gold-tester
+
+main args:
+  with-gold-tester args: test it
+
+test tester/GoldTester:
+  tester.gold "test" [
+    ["// Nothing to install."],
+    ["pkg", "install"],
+  ]
diff --git a/tests/pkg/install4-gold-test.toit b/tests/pkg/install4-gold-test.toit
new file mode 100644
index 000000000..6cfd50acc
--- /dev/null
+++ b/tests/pkg/install4-gold-test.toit
@@ -0,0 +1,32 @@
+// Copyright (C) 2025 Toit contributors.
+// Use of this source code is governed by a Zero-Clause BSD license that can
+// be found in the tests/LICENSE file.
+
+import host.file
+
+import .gold-tester
+
+main args:
+  with-gold-tester args --with-git-pkg-registry: | tester/GoldTester |
+    2.repeat: | iteration/int |
+      test tester iteration
+
+test tester/GoldTester iteration/int:
+  if iteration == 1:
+    // Second round remove the package and lock file.
+    file.delete "$tester.working-dir/package.yaml"
+    file.delete "$tester.working-dir/package.lock"
+
+  tester.gold "test-$iteration" [
+    ["pkg", "init"], // So we don't accidentally use a /tmp/package.yaml.
+    ["// No package installed yet."],
+    ["exec", "main.toit"],
+    ["exec", "main2.toit"],
+    ["// Install pkg4 for 'main.toit', creating/updating a lock file."],
+    ["pkg", "install", "pkg4", "--prefix=pkg4_pre"],
+    ["// main.toit should work now."],
+    ["exec", "main.toit"],
+    ["pkg", "install", "pkg1"],
+    ["// main2.toit should also work now."],
+    ["exec", "main2.toit"],
+  ]
diff --git a/tools/pkg/commands/install.toit b/tools/pkg/commands/install.toit
index ca5815036..7b04305f8 100644
--- a/tools/pkg/commands/install.toit
+++ b/tools/pkg/commands/install.toit
@@ -60,10 +60,7 @@ class InstallCommand extends PkgProjectCommand:
 
   execute:
     if not package:
-      if recompute:
-        project.install --recompute=recompute --registries=registries
-      else:
-        project.install
+      project.install --recompute=recompute --registries=registries
     else if not local:
       execute-remote
     else:
diff --git a/tools/pkg/project/project.toit b/tools/pkg/project/project.toit
index 395936acf..313c3e955 100644
--- a/tools/pkg/project/project.toit
+++ b/tools/pkg/project/project.toit
@@ -117,12 +117,10 @@ class Project:
     solve_ --update-everything --registries=registries
     save
 
-  install --recompute/True --registries/Registries -> none:
-    solve_ --no-update-everything --registries=registries
-    save
-    lock-file.install
-
-  install --recompute/bool=false -> none:
+  install --recompute/bool --registries/Registries -> none:
+    if recompute or not lock-file:
+      solve_ --no-update-everything --registries=registries
+      save
     lock-file.install
 
   clean -> none: