diff --git a/bin/pnpm-install b/bin/pnpm-install
index 781a2f32a5..a6f33f34db 100755
--- a/bin/pnpm-install
+++ b/bin/pnpm-install
@@ -12,6 +12,7 @@ var assign = require('object-assign')
 var logger = require('../lib/logger')
 var installMultiple = require('../lib/install_multiple')
 var config = require('../lib/config')
+var save = require('../lib/save')
 
 const cli = require('meow')([
   'Usage:',
@@ -59,25 +60,28 @@ if (cli.flags.debug) {
 function run (cli) {
   var ctx = {}
   var pkg
+  var packagesToInstall
+  var installType
 
   return readPkgUp()
     .then(pkg_ => { pkg = pkg_ })
     .then(_ => updateContext(pkg.path))
     .then(_ => install())
+    .then(_ => savePkg())
 
   function install () {
-    var packages
+    installType = cli.input && cli.input.length ? 'named' : 'general'
 
-    if (cli.input && cli.input.length) {
-      packages = cli.input
+    if (installType === 'named') {
+      packagesToInstall = cli.input
     } else {
-      packages = assign({},
+      packagesToInstall = assign({},
         pkg.pkg.dependencies || {},
         pkg.pkg.devDependencies || {})
     }
 
     return installMultiple(ctx,
-      packages,
+      packagesToInstall,
       join(ctx.root, 'node_modules'),
       cli.flags)
   }
@@ -89,6 +93,13 @@ function run (cli) {
     if (!cli.flags.quiet) ctx.log = logger()
     else ctx.log = function () { return function () {} }
   }
+
+  function savePkg () {
+    var saveType = cli.flags.save ? 'dependencies' : cli.flags.saveDev ? 'devDependencies' : null
+    if (saveType && installType === 'named') {
+      return save(pkg, packagesToInstall, saveType)
+    }
+  }
 }
 
 module.exports = run
diff --git a/lib/save.js b/lib/save.js
new file mode 100644
index 0000000000..5a59760771
--- /dev/null
+++ b/lib/save.js
@@ -0,0 +1,18 @@
+var thenify = require('thenify')
+var fs = require('fs')
+var writeFile = thenify(fs.writeFile)
+
+module.exports = function save (pkg, installedPackages, saveType) {
+  var packageJson = pkg.pkg
+  packageJson[saveType] = packageJson[saveType] || {}
+  installedPackages.forEach(function (dependency) {
+    // Assumes package name of in the format of "package-name@x.x.x"
+    // TODO: Support other install sources (Github, scoped pkgs etc.)
+    var splitDep = dependency.split('@')
+    var depName = splitDep[0]
+    var depVersion = splitDep[1]
+    packageJson[saveType][depName] = '^' + depVersion
+  })
+
+  return writeFile(pkg.path, JSON.stringify(packageJson, null, 2), 'utf8')
+}
diff --git a/test/index.js b/test/index.js
index e47257a21d..e21bc890ba 100644
--- a/test/index.js
+++ b/test/index.js
@@ -130,36 +130,17 @@ test('compiled modules (ursa@0.9.1)', function (t) {
   }, t.end)
 })
 
-test('tarballs (is-array-1.0.1.tgz)', function (t) {
+test('save to package.json (rimraf)', function (t) {
   prepare()
-  install({ input: ['http://registry.npmjs.org/is-array/-/is-array-1.0.1.tgz'], flags: { quiet: true } })
+  install({ input: ['rimraf@2.5.1'], flags: { quiet: true, saveDev: true } })
   .then(function () {
-    var isArray = require(
-      join(process.cwd(), 'node_modules', 'is-array'))
+    var rimraf = require(join(process.cwd(), 'node_modules', 'rimraf'))
+    t.ok(typeof rimraf === 'function', 'rimraf() is available')
 
-    t.ok(isArray, 'isArray() is available')
+    var pkgJson = fs.readFileSync(join(process.cwd(), 'package.json'), 'utf8')
+    var devDependencies = JSON.parse(pkgJson).devDependencies
+    t.deepEqual(devDependencies, {rimraf: '^2.5.1'}, 'rimraf has been added to devDependencies')
 
-    stat = fs.statSync(
-      join(process.cwd(), 'node_modules', '.store',
-        'is-array-1.0.1@a83102a9c117983e6ff4d85311fb322231abe3d6'))
-    t.ok(stat.isDirectory(), 'stored in the proper location')
-    t.end()
-  }, t.end)
-})
-
-test('shrinkwrap compatibility', function (t) {
-  prepare()
-  fs.writeFileSync('package.json',
-    JSON.stringify({ dependencies: { rimraf: '*' } }),
-    'utf-8')
-
-  install({ input: ['rimraf@2.5.1'], flags: { quiet: true } })
-  .then(function () {
-    var npm = JSON.stringify(require.resolve('npm/bin/npm-cli.js'))
-    require('child_process').execSync('node ' + npm + ' shrinkwrap')
-    var wrap = JSON.parse(fs.readFileSync('npm-shrinkwrap.json', 'utf-8'))
-    t.ok(wrap.dependencies.rimraf.version === '2.5.1',
-      'npm shrinkwrap is successful')
     t.end()
   }, t.end)
 })