diff --git a/nvm.sh b/nvm.sh
index 84a87c3..5b47806 100644
--- a/nvm.sh
+++ b/nvm.sh
@@ -205,7 +205,7 @@
       echo "Usage:"
       echo "    nvm help                    Show this message"
       echo "    nvm --version               Print out the latest released version of nvm"
-      echo "    nvm install [-s] <version>  Download and install a <version>, [-s] from source"
+      echo "    nvm install [-s] <version>  Download and install a <version>, [-s] from source. Uses .nvmrc if available"
       echo "    nvm uninstall <version>     Uninstall a version"
       echo "    nvm use <version>           Modify PATH to use <version>. Uses .nvmrc if available"
       echo "    nvm run <version> [<args>]  Run <version> with <args> as arguments"
@@ -238,6 +238,8 @@
       local sum
       local tarball
       local nobinary
+      local version_not_provided=0
+      local provided_version
 
       if ! nvm_has "curl"; then
         echo 'NVM Needs curl to proceed.' >&2;
@@ -245,8 +247,12 @@
       fi
 
       if [ $# -lt 2 ]; then
-        nvm help
-        return
+        version_not_provided=1
+        nvm_rc_version
+        if [ -z "$NVM_RC_VERSION" ]; then
+          nvm help
+          return
+        fi
       fi
 
       shift
@@ -261,9 +267,16 @@
         nobinary=1
       fi
 
-      [ -d "$NVM_DIR/$1" ] && echo "$1 is already installed." && return
+      provided_version=$1
+      if [ -z "$provided_version" ]; then
+        if [ $version_not_provided -ne 1 ]; then
+          nvm_rc_version
+        fi
+        provided_version="$NVM_RC_VERSION"
+      fi
+      [ -d "$NVM_DIR/$provided_version" ] && echo "$provided_version is already installed." && return
 
-      VERSION=`nvm_remote_version $1`
+      VERSION=`nvm_remote_version $provided_version`
       ADDITIONAL_PARAMETERS=''
 
       shift
@@ -460,10 +473,18 @@
     "run" )
       # run given version of node
       if [ $# -lt 2 ]; then
-        nvm help
-        return
+        nvm_rc_version
+        if [ -z "$NVM_RC_VERSION" ]; then
+          nvm help
+          return
+        fi
       fi
-      VERSION=`nvm_version $2`
+      NVM_PROVIDED_VERSION=`nvm_version $2`
+      if [ -z "$NVM_PROVIDED_VERSION" ]; then
+        nvm_rc_version
+        NVM_PROVIDED_VERSION="$NVM_RC_VERSION"
+      fi
+      VERSION="$NVM_PROVIDED_VERSION"
       if [ ! -d "$NVM_DIR/$VERSION" ]; then
         echo "$VERSION version is not installed yet"
         return;
diff --git a/test/slow/nvm install/install version specified in .nvmrc from binary b/test/slow/nvm install/install version specified in .nvmrc from binary
new file mode 100644
index 0000000..dec2fe1
--- /dev/null
+++ b/test/slow/nvm install/install version specified in .nvmrc from binary
@@ -0,0 +1,20 @@
+#!/bin/sh
+
+set -e
+. ../../../nvm.sh
+
+NVM_TEST_VERSION=v0.10.7
+
+# Remove the stuff we're clobbering.
+[ -e ../../../$NVM_TEST_VERSION ] && rm -R ../../../$NVM_TEST_VERSION
+
+# Install from binary
+cat "$NVM_TEST_VERSION" > .nvmrc
+
+nvm install
+
+# Check
+[ -d ../../../$NVM_TEST_VERSION ]
+nvm run $NVM_TEST_VERSION --version | grep $NVM_TEST_VERSION
+
+
diff --git a/test/slow/nvm install/install version specified in .nvmrc from source b/test/slow/nvm install/install version specified in .nvmrc from source
new file mode 100644
index 0000000..6910228
--- /dev/null
+++ b/test/slow/nvm install/install version specified in .nvmrc from source
@@ -0,0 +1,20 @@
+#!/bin/sh
+
+set -e
+. ../../../nvm.sh
+
+NVM_TEST_VERSION=v0.10.7
+
+# Remove the stuff we're clobbering.
+[ -e ../../../$NVM_TEST_VERSION ] && rm -R ../../../$NVM_TEST_VERSION
+
+# Install from binary
+cat "$NVM_TEST_VERSION" > .nvmrc
+
+nvm install -s
+
+# Check
+[ -d ../../../$NVM_TEST_VERSION ]
+nvm run $NVM_TEST_VERSION --version | grep $NVM_TEST_VERSION
+
+