diff --git a/src/Composer/Command/InstallCommand.php b/src/Composer/Command/InstallCommand.php
index 7039cfd10..a8e2fb568 100644
--- a/src/Composer/Command/InstallCommand.php
+++ b/src/Composer/Command/InstallCommand.php
@@ -31,6 +31,7 @@ class InstallCommand extends Command
             ->setDescription('Parses the composer.json file and downloads the needed dependencies.')
             ->setDefinition(array(
                 new InputOption('prefer-source', null, InputOption::VALUE_NONE, 'Forces installation from package sources when possible, including VCS information.'),
+                new InputOption('prefer-dist', null, InputOption::VALUE_NONE, 'Forces installation from package dist even for dev versions.'),
                 new InputOption('dry-run', null, InputOption::VALUE_NONE, 'Outputs the operations but will not execute anything (implicitly enables --verbose).'),
                 new InputOption('dev', null, InputOption::VALUE_NONE, 'Enables installation of dev-require packages.'),
                 new InputOption('no-custom-installers', null, InputOption::VALUE_NONE, 'Disables all custom installers.'),
@@ -59,6 +60,7 @@ EOT
             ->setDryRun($input->getOption('dry-run'))
             ->setVerbose($input->getOption('verbose'))
             ->setPreferSource($input->getOption('prefer-source'))
+            ->setPreferDist($input->getOption('prefer-dist'))
             ->setDevMode($input->getOption('dev'))
             ->setRunScripts(!$input->getOption('no-scripts'))
         ;
diff --git a/src/Composer/Command/UpdateCommand.php b/src/Composer/Command/UpdateCommand.php
index 9a5d4a7aa..86bf3e710 100644
--- a/src/Composer/Command/UpdateCommand.php
+++ b/src/Composer/Command/UpdateCommand.php
@@ -31,6 +31,7 @@ class UpdateCommand extends Command
             ->setDefinition(array(
                 new InputArgument('packages', InputArgument::IS_ARRAY | InputArgument::OPTIONAL, 'Packages that should be updated, if not provided all packages are.'),
                 new InputOption('prefer-source', null, InputOption::VALUE_NONE, 'Forces installation from package sources when possible, including VCS information.'),
+                new InputOption('prefer-dist', null, InputOption::VALUE_NONE, 'Forces installation from package dist even for dev versions.'),
                 new InputOption('dry-run', null, InputOption::VALUE_NONE, 'Outputs the operations but will not execute anything (implicitly enables --verbose).'),
                 new InputOption('dev', null, InputOption::VALUE_NONE, 'Enables installation of dev-require packages.'),
                 new InputOption('no-custom-installers', null, InputOption::VALUE_NONE, 'Disables all custom installers.'),
@@ -63,6 +64,7 @@ EOT
             ->setDryRun($input->getOption('dry-run'))
             ->setVerbose($input->getOption('verbose'))
             ->setPreferSource($input->getOption('prefer-source'))
+            ->setPreferDist($input->getOption('prefer-dist'))
             ->setDevMode($input->getOption('dev'))
             ->setRunScripts(!$input->getOption('no-scripts'))
             ->setUpdate(true)
diff --git a/src/Composer/Downloader/DownloadManager.php b/src/Composer/Downloader/DownloadManager.php
index 4b4bf3ec4..d88220db4 100644
--- a/src/Composer/Downloader/DownloadManager.php
+++ b/src/Composer/Downloader/DownloadManager.php
@@ -23,6 +23,7 @@ use Composer\Util\Filesystem;
  */
 class DownloadManager
 {
+    private $preferDist = false;
     private $preferSource = false;
     private $filesystem;
     private $downloaders  = array();
@@ -51,6 +52,18 @@ class DownloadManager
         return $this;
     }
 
+    /**
+     * Makes downloader prefer dist installation over the source.
+     *
+     * @param bool $preferDist prefer downloading from dist
+     */
+    public function setPreferDist($preferDist)
+    {
+        $this->preferDist = $preferDist;
+
+        return $this;
+    }
+
     /**
      * Sets installer downloader for a specific installation type.
      *
@@ -134,12 +147,12 @@ class DownloadManager
         $sourceType   = $package->getSourceType();
         $distType     = $package->getDistType();
 
-        if (!$package->isDev() && !($preferSource && $sourceType) && $distType) {
+        if ((!$package->isDev() || $this->preferDist) && !($preferSource && $sourceType) && $distType) {
             $package->setInstallationSource('dist');
         } elseif ($sourceType) {
             $package->setInstallationSource('source');
-        } elseif ($package->isDev()) {
-            throw new \InvalidArgumentException('Dev package '.$package.' must have a source specified');
+        } elseif ($package->isDev() && $distType) {
+            throw new \InvalidArgumentException('Dev package '.$package.' should have a source specified because for dev packages dist is used only with --prefer-dist option');
         } else {
             throw new \InvalidArgumentException('Package '.$package.' must have a source or dist specified');
         }
diff --git a/src/Composer/Installer.php b/src/Composer/Installer.php
index d14662518..a75a59bb9 100644
--- a/src/Composer/Installer.php
+++ b/src/Composer/Installer.php
@@ -91,6 +91,7 @@ class Installer
     protected $autoloadGenerator;
 
     protected $preferSource = false;
+    protected $preferDist = false;
     protected $devMode = false;
     protected $dryRun = false;
     protected $verbose = false;
@@ -148,6 +149,9 @@ class Installer
         if ($this->preferSource) {
             $this->downloadManager->setPreferSource(true);
         }
+        if ($this->preferDist) {
+            $this->downloadManager->setPreferDist(true);
+        }
 
         // create installed repo, this contains all local packages + platform packages (php & extensions)
         $installedRootPackage = clone $this->package;
@@ -679,6 +683,19 @@ class Installer
         return $this;
     }
 
+    /**
+     * prefer dist installation
+     *
+     * @param  boolean   $preferDist
+     * @return Installer
+     */
+    public function setPreferDist($preferDist = true)
+    {
+        $this->preferDist = (boolean) $preferDist;
+
+        return $this;
+    }
+
     /**
      * update packages
      *