diff --git a/lib/package_register.c b/lib/package_register.c
index 805856e8..5ea2f6f9 100644
--- a/lib/package_register.c
+++ b/lib/package_register.c
@@ -41,7 +41,6 @@ xbps_register_pkg(struct xbps_handle *xhp, xbps_dictionary_t pkgrd)
 	const char *pkgver, *pkgname;
 	char sha256[XBPS_SHA256_SIZE], outstr[64], *buf;
 	int rv = 0;
-	bool autoinst = false;
 
 	assert(xbps_object_type(pkgrd) == XBPS_TYPE_DICTIONARY);
 
@@ -53,17 +52,6 @@ xbps_register_pkg(struct xbps_handle *xhp, xbps_dictionary_t pkgrd)
 	xbps_dictionary_get_cstring_nocopy(pkgd, "pkgver", &pkgver);
 	xbps_dictionary_get_cstring_nocopy(pkgd, "pkgname", &pkgname);
 
-	if (xhp->flags & XBPS_FLAG_INSTALL_AUTO)
-		autoinst = true;
-	/*
-	 * Set automatic-install to true, iff it was explicitly set; otherwise
-	 * preserve its value.
-	 */
-	if (autoinst && !xbps_dictionary_set_bool(pkgd, "automatic-install", true)) {
-		xbps_dbg_printf("%s: invalid autoinst for %s\n",  __func__, pkgver);
-		rv = EINVAL;
-		goto out;
-	}
 	if (xhp->flags & XBPS_FLAG_INSTALL_REPRO) {
 		/*
 		 * Reproducible mode. Some objects must not be recorded:
diff --git a/lib/transaction_ops.c b/lib/transaction_ops.c
index 1f123901..d4fef601 100644
--- a/lib/transaction_ops.c
+++ b/lib/transaction_ops.c
@@ -62,6 +62,7 @@ trans_find_pkg(struct xbps_handle *xhp, const char *pkg, bool force)
 	xbps_trans_type_t ttype;
 	const char *repoloc, *repopkgver, *instpkgver, *pkgname;
 	char buf[XBPS_NAME_SIZE] = {0};
+	bool autoinst = false;
 	int rv = 0;
 
 	assert(pkg != NULL);
@@ -208,7 +209,13 @@ trans_find_pkg(struct xbps_handle *xhp, const char *pkg, bool force)
 		return EINVAL;
 	}
 
-	if (!xbps_transaction_store(xhp, pkgs, pkg_repod, false)) {
+	/*
+	 * Set automatic-install to true if it was requested and this is a new install.
+	 */
+	if (ttype == XBPS_TRANS_INSTALL)
+		autoinst = xhp->flags & XBPS_FLAG_INSTALL_AUTO;
+
+	if (!xbps_transaction_store(xhp, pkgs, pkg_repod, autoinst)) {
 		return EINVAL;
 	}
 
diff --git a/tests/xbps/libxbps/shell/installmode_test.sh b/tests/xbps/libxbps/shell/installmode_test.sh
index a9e767a3..7363609f 100644
--- a/tests/xbps/libxbps/shell/installmode_test.sh
+++ b/tests/xbps/libxbps/shell/installmode_test.sh
@@ -229,6 +229,118 @@ instmode_dependency_configure_body() {
 	atf_check_equal $out ""
 }
 
+atf_test_case instmode_auto_dependency_update
+
+instmode_auto_dependency_update_head() {
+	atf_set "descr" "Installation mode: auto preserve on install with dependency update"
+}
+
+instmode_auto_dependency_update_body() {
+	mkdir some_repo
+	mkdir -p pkg_A/usr/bin pkg_B/usr/bin
+	touch -f pkg_A/usr/bin/foo pkg_B/usr/bin/blah
+
+	cd some_repo
+	xbps-create -A noarch -n A-1.0_1 -s "foo pkg" ../pkg_A
+	atf_check_equal $? 0
+	xbps-rindex -d -a $PWD/*.xbps
+	atf_check_equal $? 0
+
+	cd ..
+	xbps-install -r root -C null.conf --repository=$PWD/some_repo -yd A-1.0_1
+	atf_check_equal $? 0
+
+	cd some_repo
+	xbps-create -A noarch -n A-1.1_1 -s "foo pkg" ../pkg_A
+	atf_check_equal $? 0
+	xbps-create -A noarch -n B-1.1_1 -s "foo pkg" -D "A>=1.1_1" ../pkg_B
+	atf_check_equal $? 0
+	xbps-rindex -d -a $PWD/*.xbps
+	atf_check_equal $? 0
+
+	cd ..
+	xbps-install -r root -C null.conf --repository=$PWD/some_repo -Ayd B
+	atf_check_equal $? 0
+	out="$(xbps-query -r root --property=automatic-install A)"
+	atf_check_equal $out ""
+	out="$(xbps-query -r root --property=automatic-install B)"
+	atf_check_equal $out "yes"
+}
+
+atf_test_case instmode_auto_dependency_update_automatic
+
+instmode_auto_dependency_update_automatic_head() {
+	atf_set "descr" "Installation mode: auto preserve on install with dependency update marked automatic"
+}
+
+instmode_auto_dependency_update_automatic_body() {
+	mkdir some_repo
+	mkdir -p pkg_A/usr/bin pkg_B/usr/bin
+	touch -f pkg_A/usr/bin/foo pkg_B/usr/bin/blah
+
+	cd some_repo
+	xbps-create -A noarch -n A-1.0_1 -s "foo pkg" ../pkg_A
+	atf_check_equal $? 0
+	xbps-rindex -d -a $PWD/*.xbps
+	atf_check_equal $? 0
+
+	cd ..
+	xbps-install -r root -C null.conf --repository=$PWD/some_repo -Ayd A-1.0_1
+	atf_check_equal $? 0
+
+	cd some_repo
+	xbps-create -A noarch -n A-1.1_1 -s "foo pkg" ../pkg_A
+	atf_check_equal $? 0
+	xbps-create -A noarch -n B-1.1_1 -s "foo pkg" -D "A>=1.1_1" ../pkg_B
+	atf_check_equal $? 0
+	xbps-rindex -d -a $PWD/*.xbps
+	atf_check_equal $? 0
+
+	cd ..
+	xbps-install -r root -C null.conf --repository=$PWD/some_repo -Ayd B
+	atf_check_equal $? 0
+	out="$(xbps-query -r root --property=automatic-install A)"
+	atf_check_equal $out "yes"
+	out="$(xbps-query -r root --property=automatic-install B)"
+	atf_check_equal $out "yes"
+}
+
+atf_test_case instmode_auto_dependency_configure
+
+instmode_auto_dependency_configure_head() {
+	atf_set "descr" "Installation mode: auto preserve on install with dependency configure"
+}
+
+instmode_auto_dependency_configure_body() {
+	mkdir some_repo
+	mkdir -p pkg_A/usr/bin pkg_B/usr/bin
+	touch -f pkg_A/usr/bin/foo pkg_B/usr/bin/blah
+
+	cd some_repo
+	xbps-create -A noarch -n A-1.0_1 -s "foo pkg" ../pkg_A
+	atf_check_equal $? 0
+	xbps-rindex -d -a $PWD/*.xbps
+	atf_check_equal $? 0
+
+	cd ..
+	xbps-install -r root -C null.conf --repository=$PWD/some_repo -Uyd A-1.0_1
+	atf_check_equal $? 0
+
+	cd some_repo
+	xbps-create -A noarch -n B-1.1_1 -s "foo pkg" -D "A>=0" ../pkg_B
+	atf_check_equal $? 0
+	xbps-rindex -d -a $PWD/*.xbps
+	atf_check_equal $? 0
+
+	cd ..
+	xbps-install -r root -C null.conf --repository=$PWD/some_repo -Ayd B
+	atf_check_equal $? 0
+	out="$(xbps-query -r root --property=automatic-install A)"
+	atf_check_equal $out ""
+	out="$(xbps-query -r root --property=automatic-install B)"
+	atf_check_equal $out "yes"
+}
+
 atf_init_test_cases() {
 	atf_add_test_case instmode
 	atf_add_test_case instmode_auto
@@ -237,4 +349,7 @@ atf_init_test_cases() {
 	atf_add_test_case instmode_dependency_update
 	atf_add_test_case instmode_dependency_update_automatic
 	atf_add_test_case instmode_dependency_configure
+	atf_add_test_case instmode_auto_dependency_update
+	atf_add_test_case instmode_auto_dependency_update_automatic
+	atf_add_test_case instmode_auto_dependency_configure
 }