diff --git a/lib/commands/new/project-template.js b/lib/commands/new/project-template.js
index be3e85a16..bb02c6659 100644
--- a/lib/commands/new/project-template.js
+++ b/lib/commands/new/project-template.js
@@ -331,17 +331,21 @@ exports.ProjectTemplate = class {
     return this.root.create(ui, location);
   }
 
-  install(ui) {
-    let workingDirectory = this.options.hasFlag('here')
+  getWorkingDirectory() {
+    return this.options.hasFlag('here')
       ? process.cwd()
       : path.posix.join(process.cwd(), this.content.calculateRelativePath());
+  }
+
+  install(ui, packageManager) {
+    let workingDirectory = this.getWorkingDirectory();
 
-    return installDependencies(ui, workingDirectory)
+    return installDependencies(workingDirectory, packageManager)
       .then(() => runPostInstallProcesses(ui, workingDirectory, this.postInstallProcesses));
   }
 };
 
-function installDependencies(ui, workingDirectory, dependencies) {
+function installDependencies(workingDirectory, packageManager) {
   let npm = new NPM();
   let npmOptions = {
     loglevel: 'error',
@@ -351,24 +355,20 @@ function installDependencies(ui, workingDirectory, dependencies) {
     workingDirectory: workingDirectory
   };
 
-  // try yarn, but if something fails then fall back to NPM
-  try {
-    let yarn = new Yarn();
-    if (yarn.isAvailable(workingDirectory)) {
-      return yarn.install([], { cwd: workingDirectory })
-      .catch(e => {
-        logger.error('Something went wrong while attempting to use Yarn. Falling back to NPM');
-        logger.info(e);
+  if (packageManager === 'yarn') {
+    const yarn = new Yarn(); 
+    return yarn.install([], { cwd: workingDirectory })
+    .catch(e => {
+      logger.error('Something went wrong while attempting to use Yarn. Falling back to NPM');
+      logger.info(e);
 
-        return npm.install([], npmOptions);
-      });
-    }
-  } catch (e) {
-    logger.error('Something went wrong while attempting to search for Yarn. Falling back to NPM');
-    logger.info(e);
+      return npm.install([], npmOptions);
+    });
+  } else if (packageManager === 'npm') {
+    return npm.install([], npmOptions);
   }
 
-  return npm.install([], npmOptions);
+  throw new Error(`Unknown package manager ${packageManager}`);
 }
 
 function addDependencies(current, toAdd) {
diff --git a/lib/workflow/activities/project-install.js b/lib/workflow/activities/project-install.js
index 9db0271df..135c696a5 100644
--- a/lib/workflow/activities/project-install.js
+++ b/lib/workflow/activities/project-install.js
@@ -3,6 +3,7 @@ const os = require('os');
 const UI = require('../../ui').UI;
 const transform = require('../../colors/transform');
 const createLines = require('../../string').createLines;
+const Yarn = require('../../package-managers/yarn').Yarn;
 const CLIOptions = require('../../cli-options').CLIOptions;
 
 module.exports = class {
@@ -15,22 +16,49 @@ module.exports = class {
 
   execute(context) {
     let project = context.state.project;
+    let options = [];
+
+    let yarn = new Yarn();
+    if (yarn.isAvailable(project.getWorkingDirectory())) {
+      this.ui.log('Note: lock files are not cross compatible between package managers. Choose Yarn here only if you intend to use Yarn for future package installs. Alternatively, remove either yarn.lock or package-lock.json from the project directory before installing new packages.');
+      options =  [
+        {
+          displayName: 'Yes, use Yarn',
+          description: 'Installs all server, client and tooling dependencies needed to build the project using Yarn.',
+          value: 'yarn'
+        },
+        {
+          displayName: 'Yes, use NPM',
+          description: 'Installs all server, client and tooling dependencies needed to build the project using NPM.',
+          value: 'npm'
+        },
+        {
+          displayName: 'No',
+          description: 'Completes the new project wizard without installing dependencies.',
+          value: 'no'
+        }
+      ];
+    } else {
+      options = [
+        {
+          displayName: 'Yes',
+          description: 'Installs all server, client and tooling dependencies needed to build the project.',
+          value: 'yes'
+        },
+        {
+          displayName: 'No',
+          description: 'Completes the new project wizard without installing dependencies.',
+          value: 'no'
+        }
+      ];
+    }
+
+    return this.ui.question('Would you like to install the project dependencies?', options).then(answer => {
+      if (answer.value === 'yes' || answer.value === 'npm' || answer.value === 'yarn') {
+        const packageManager = answer.value === 'yes' ? 'npm' : answer.value;
 
-    return this.ui.question('Would you like to install the project dependencies?', [
-      {
-        displayName: 'Yes',
-        description: 'Installs all server, client and tooling dependencies needed to build the project.',
-        value: 'yes'
-      },
-      {
-        displayName: 'No',
-        description: 'Completes the new project wizard without installing dependencies.',
-        value: 'no'
-      }
-    ]).then(answer => {
-      if (answer.value === 'yes') {
         return this.ui.log(os.EOL + 'Installing project dependencies.')
-          .then(() => project.install(this.ui))
+          .then(() => project.install(this.ui, packageManager))
           .then(() => this.displayCompletionMessage(project))
           .then(() => context.next(this.nextActivity));
       }