diff --git a/package.json b/package.json
index b275b4ec0c..d01c17cf95 100644
--- a/package.json
+++ b/package.json
@@ -19,6 +19,7 @@
     "ini": "^1.3.4",
     "invariant": "^2.2.0",
     "is-builtin-module": "^1.0.0",
+    "is-ci": "^1.0.10",
     "leven": "^2.0.0",
     "loud-rejection": "^1.2.0",
     "minimatch": "^3.0.3",
diff --git a/src/cli/commands/install.js b/src/cli/commands/install.js
index 3dada9a1c6..890368b481 100644
--- a/src/cli/commands/install.js
+++ b/src/cli/commands/install.js
@@ -25,8 +25,15 @@ import * as crypto from '../../util/crypto.js';
 import map from '../../util/map.js';
 
 const invariant = require('invariant');
+const userHome = require('user-home');
+const semver = require('semver');
 const emoji = require('node-emoji');
+const isCI = require('is-ci');
 const path = require('path');
+const fs2 = require('fs');
+
+const YARN_VERSION = require('../../../package.json').version;
+const ONE_DAY = 1000 * 60 * 60 * 24;
 
 export type InstallPrepared = {
   skip: boolean,
@@ -69,6 +76,43 @@ type Flags = {
   tilde: boolean,
 };
 
+/**
+ * Try and detect the installation method for Yarn and provide a command to update it with.
+ */
+
+function getUpdateCommand(): ?string {
+  // Tarball install
+  if (fs2.existsSync(path.join(userHome, '.yarn'))) {
+    return 'yarn self-update';
+  }
+
+  // OSX
+  if (fs2.existsSync('/usr/local/Cellar')) {
+    return 'brew upgrade yarn';
+  }
+
+  // Debian
+  if (fs2.existsSync('/usr/share/lintian/overrides/yarn')) {
+    return 'sudo apt-get install yarn';
+  }
+
+  // npm
+  if (__dirname.indexOf('node_modules') >= 0) {
+    return 'npm upgrade --global yarn';
+  }
+
+  return null;
+}
+
+function getUpdateInstaller(): ?string {
+  // Windows
+  if (fs2.existsSync('C:/Program Files/Yarn') || fs2.existsSync('C:/Program Files (x86)/Yarn')) {
+    return 'https://yarnpkg.com/latest.msi';
+  }
+
+  return null;
+}
+
 function normalizeFlags(config: Config, rawFlags: Object): Flags {
   const flags = {
     // install
@@ -273,6 +317,8 @@ export class Install {
    */
 
   async init(): Promise<Array<string>> {
+    this.checkUpdate();
+
     let [depRequests, rawPatterns] = await this.fetchRequestFromCwd();
     const match = await this.matchesIntegrityHash(rawPatterns);
 
@@ -355,6 +401,7 @@ export class Install {
 
     // fin!
     await this.saveLockfileAndIntegrity(rawPatterns);
+    this.maybeOutputUpdate();
     this.config.requestManager.clearCache();
     return patterns;
   }
@@ -640,6 +687,71 @@ export class Install {
 
     return request;
   }
+
+  /**
+   * Check for updates every day and output a nag message if there's a newer version.
+   */
+
+  checkUpdate() {
+    if (!process.stdout.isTTY || isCI) {
+      // don't show upgrade dialog on CI or non-TTY terminals
+      return;
+    }
+
+    // only check for updates once a day
+    const lastUpdateCheck = Number(this.config.getOption('lastUpdateCheck')) || 0;
+    if (lastUpdateCheck && Date.now() - lastUpdateCheck < ONE_DAY) {
+      return;
+    }
+
+    // don't bug for updates on tagged releases
+    if (YARN_VERSION.indexOf('-') >= 0) {
+      return;
+    }
+
+    this._checkUpdate().catch(() => {
+      // swallow errors
+    });
+  }
+
+  async _checkUpdate(): Promise<void> {
+    let latestVersion = await this.config.requestManager.request({
+      url: 'https://yarnpkg.com/latest-version',
+    });
+    invariant(typeof latestVersion === 'string', 'expected string');
+    latestVersion = latestVersion.trim();
+    if (!semver.valid(latestVersion)) {
+      return;
+    }
+
+    // ensure we only check for updates periodically
+    this.config.registries.yarn.saveHomeConfig({
+      lastUpdateCheck: Date.now(),
+    });
+
+    if (semver.gt(latestVersion, YARN_VERSION)) {
+      this.maybeOutputUpdate = () => {
+        this.reporter.warn(this.reporter.lang('yarnOutdated', latestVersion, YARN_VERSION));
+
+        const command = getUpdateCommand();
+        if (command) {
+          this.reporter.info(this.reporter.lang('yarnOutdatedCommand', command));
+        } else {
+          const installer = getUpdateInstaller();
+          if (installer) {
+            this.reporter.info(this.reporter.lang('yarnOutdatedInstaller', installer));
+          }
+        }
+      };
+    }
+  }
+
+  /**
+   * Method to override with a possible upgrade message.
+   */
+
+  maybeOutputUpdate() {}
+  maybeOutputUpdate: any;
 }
 
 export function _setFlags(commander: Object) {
diff --git a/src/config.js b/src/config.js
index 4f3235d5de..d93c4006c8 100644
--- a/src/config.js
+++ b/src/config.js
@@ -376,6 +376,8 @@ export default class Config {
           return file;
         }
       }
+
+      return null;
     });
   }
 
diff --git a/src/reporters/lang/en.js b/src/reporters/lang/en.js
index 2679533698..ab5bcde58f 100644
--- a/src/reporters/lang/en.js
+++ b/src/reporters/lang/en.js
@@ -72,6 +72,10 @@ const messages = {
   unexpectedError: 'An unexpected error occurred, please open a bug report with the information provided in $0.',
   jsonError: 'Error parsing JSON at $0, $1.',
 
+  yarnOutdated: "Your current version of Yarn is out of date. The latest version is $0 while you're on $1.",
+  yarnOutdatedInstaller: 'To upgrade, download the latest installer at $0.',
+  yarnOutdatedCommand: 'To upgrade, run $0.',
+
   tooManyArguments: 'Too many arguments, maximum of $0.',
   tooFewArguments: 'Not enough arguments, expected at least $0.',
   noArguments: "This command doesn't require any arguments.",
diff --git a/yarn.lock b/yarn.lock
index aeb7aa32dc..e7cf892e74 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -1,5 +1,7 @@
 # THIS IS AN AUTOGENERATED FILE. DO NOT EDIT THIS FILE DIRECTLY.
 # yarn lockfile v1
+
+
 abab@^1.0.0:
   version "1.0.3"
   resolved "https://registry.yarnpkg.com/abab/-/abab-1.0.3.tgz#b81de5f7274ec4e756d797cd834f303642724e5d"
@@ -1329,6 +1331,10 @@ chokidar@^1.4.3, chokidar@^1.5.2:
   optionalDependencies:
     fsevents "^1.0.0"
 
+ci-info@^1.0.0:
+  version "1.0.0"
+  resolved "https://registry.yarnpkg.com/ci-info/-/ci-info-1.0.0.tgz#dc5285f2b4e251821683681c381c3388f46ec534"
+
 cipher-base@^1.0.0, cipher-base@^1.0.1:
   version "1.0.3"
   resolved "https://registry.yarnpkg.com/cipher-base/-/cipher-base-1.0.3.tgz#eeabf194419ce900da3018c207d212f2a6df0a07"
@@ -2671,6 +2677,12 @@ is-builtin-module@^1.0.0:
   dependencies:
     builtin-modules "^1.0.0"
 
+is-ci:
+  version "1.0.10"
+  resolved "https://registry.yarnpkg.com/is-ci/-/is-ci-1.0.10.tgz#f739336b2632365061a9d48270cd56ae3369318e"
+  dependencies:
+    ci-info "^1.0.0"
+
 is-ci@^1.0.9:
   version "1.0.9"
   resolved "https://registry.yarnpkg.com/is-ci/-/is-ci-1.0.9.tgz#de2c5ffe49ab3237fda38c47c8a3bbfd55bbcca7"
@@ -5192,4 +5204,3 @@ yargs@~3.27.0:
     os-locale "^1.4.0"
     window-size "^0.1.2"
     y18n "^3.2.0"
-