diff --git a/src/cargo/ops/cargo_install.rs b/src/cargo/ops/cargo_install.rs
index b193131a927..93d9319b3e9 100644
--- a/src/cargo/ops/cargo_install.rs
+++ b/src/cargo/ops/cargo_install.rs
@@ -174,14 +174,30 @@ fn install_one(
         )?
     } else if source_id.is_path() {
         let mut src = path_source(source_id, config)?;
-        src.update().chain_err(|| {
-            failure::format_err!(
-                "`{}` is not a crate root; specify a crate to \
-                 install from crates.io, or use --path or --git to \
-                 specify an alternate source",
+        if !src.path().is_dir() {
+            failure::bail!(
+                "`{}` is not a directory. \
+                 --path must point to a directory containing a Cargo.toml file.",
                 src.path().display()
             )
-        })?;
+        }
+        if !src.path().join("Cargo.toml").exists() {
+            if from_cwd {
+                failure::bail!(
+                    "`{}` is not a crate root; specify a crate to \
+                     install from crates.io, or use --path or --git to \
+                     specify an alternate source",
+                    src.path().display()
+                );
+            } else {
+                failure::bail!(
+                    "`{}` does not contain a Cargo.toml file. \
+                     --path must point to a directory containing a Cargo.toml file.",
+                    src.path().display()
+                )
+            }
+        }
+        src.update()?;
         select_pkg(src, krate, vers, config, false, &mut |path| {
             path.read_packages()
         })?
diff --git a/tests/testsuite/install.rs b/tests/testsuite/install.rs
index 5c202ee3b07..b7955461f68 100644
--- a/tests/testsuite/install.rs
+++ b/tests/testsuite/install.rs
@@ -160,20 +160,27 @@ fn bad_version() {
 }
 
 #[test]
-fn no_crate() {
+fn bad_paths() {
     cargo_process("install")
         .with_status(101)
-        .with_stderr(
-            "\
-[ERROR] `[..]` is not a crate root; specify a crate to install [..]
+        .with_stderr("[ERROR] `[CWD]` is not a crate root; specify a crate to install [..]")
+        .run();
 
-Caused by:
-  failed to read `[..]Cargo.toml`
+    cargo_process("install --path .")
+        .with_status(101)
+        .with_stderr("[ERROR] `[CWD]` does not contain a Cargo.toml file[..]")
+        .run();
 
-Caused by:
-  [..] (os error [..])
-",
-        )
+    let toml = paths::root().join("Cargo.toml");
+    fs::write(toml, "").unwrap();
+    cargo_process("install --path Cargo.toml")
+        .with_status(101)
+        .with_stderr("[ERROR] `[CWD]/Cargo.toml` is not a directory[..]")
+        .run();
+
+    cargo_process("install --path .")
+        .with_status(101)
+        .with_stderr_contains("[ERROR] failed to parse manifest at `[CWD]/Cargo.toml`")
         .run();
 }
 
diff --git a/tests/testsuite/support/mod.rs b/tests/testsuite/support/mod.rs
index 404439ea416..ea5b8751f59 100644
--- a/tests/testsuite/support/mod.rs
+++ b/tests/testsuite/support/mod.rs
@@ -1249,6 +1249,8 @@ enum MatchKind {
 /// - There is a wide range of macros (such as `[COMPILING]` or `[WARNING]`)
 ///   to match cargo's "status" output and allows you to ignore the alignment.
 ///   See `substitute_macros` for a complete list of macros.
+/// - `[ROOT]` is `/` or `[..]:\` on Windows.
+/// - `[CWD]` is the working directory of the process that was run.
 pub fn lines_match(expected: &str, actual: &str) -> bool {
     // Let's not deal with / vs \ (windows...)
     // First replace backslash-escaped backslashes with forward slashes