diff --git a/src/command-line/install.js b/src/command-line/install.js
index 53108f57..bc30a851 100644
--- a/src/command-line/install.js
+++ b/src/command-line/install.js
@@ -13,6 +13,8 @@ program
 	.on("--help", Utils.extraHelp)
 	.action(function (packageName) {
 		const fs = require("fs");
+		const fspromises = fs.promises;
+		const path = require("path");
 		const packageJson = require("package-json");
 
 		if (!fs.existsSync(Helper.getConfigPath())) {
@@ -21,22 +23,31 @@ program
 		}
 
 		log.info("Retrieving information about the package...");
+		let readFile = null;
+		let isLocalFile = false;
 
-		const split = packageName.split("@");
-		packageName = split[0];
-		const packageVersion = split[1] || "latest";
+		if (packageName.startsWith("file:")) {
+			isLocalFile = true;
+			readFile = fspromises
+				.readFile(path.join(packageName.substr("file:".length), "package.json"), "utf-8")
+				.then((data) => JSON.parse(data));
+		} else {
+			const split = packageName.split("@");
+			packageName = split[0];
+			const packageVersion = split[1] || "latest";
 
-		packageJson(packageName, {
-			fullMetadata: true,
-			version: packageVersion,
-		})
+			readFile = packageJson(packageName, {
+				fullMetadata: true,
+				version: packageVersion,
+			});
+		}
+
+		readFile
 			.then((json) => {
+				const humanVersion = isLocalFile ? packageName : `${json.name} v${json.version}`;
+
 				if (!("thelounge" in json)) {
-					log.error(
-						`${colors.red(
-							json.name + " v" + json.version
-						)} does not have The Lounge metadata.`
-					);
+					log.error(`${colors.red(humanVersion)} does not have The Lounge metadata.`);
 
 					process.exit(1);
 				}
@@ -47,7 +58,7 @@ program
 				) {
 					log.error(
 						`${colors.red(
-							json.name + " v" + json.version
+							humanVersion
 						)} does not support The Lounge v${Helper.getVersionNumber()}. Supported version(s): ${
 							json.thelounge.supports
 						}`
@@ -56,20 +67,23 @@ program
 					process.exit(2);
 				}
 
-				log.info(`Installing ${colors.green(json.name + " v" + json.version)}...`);
-
-				return Utils.executeYarnCommand("add", "--exact", `${json.name}@${json.version}`)
+				log.info(`Installing ${colors.green(humanVersion)}...`);
+				const yarnVersion = isLocalFile ? packageName : `${json.name}@${json.version}`;
+				return Utils.executeYarnCommand("add", "--exact", yarnVersion)
 					.then(() => {
-						log.info(
-							`${colors.green(
-								json.name + " v" + json.version
-							)} has been successfully installed.`
-						);
+						log.info(`${colors.green(humanVersion)} has been successfully installed.`);
+
+						if (isLocalFile) {
+							// yarn v1 is buggy if a local filepath is used and doesn't update
+							// the lockfile properly. We need to run an install in that case
+							// even though that's supposed to be done by the add subcommand
+							return Utils.executeYarnCommand("install").catch((err) => {
+								throw `Failed to update lockfile after package install ${err}`;
+							});
+						}
 					})
 					.catch((code) => {
-						throw `Failed to install ${colors.green(
-							json.name + " v" + json.version
-						)}. Exit code: ${code}`;
+						throw `Failed to install ${colors.red(humanVersion)}. Exit code: ${code}`;
 					});
 			})
 			.catch((e) => {