diff --git a/src/Composer/Installer/LibraryInstaller.php b/src/Composer/Installer/LibraryInstaller.php
index 281ffa11a..cb3808295 100644
--- a/src/Composer/Installer/LibraryInstaller.php
+++ b/src/Composer/Installer/LibraryInstaller.php
@@ -41,15 +41,16 @@ class LibraryInstaller implements InstallerInterface
      * @param IOInterface $io
      * @param Composer    $composer
      * @param string      $type
+     * @param Filesystem  $filesystem
      */
-    public function __construct(IOInterface $io, Composer $composer, $type = 'library')
+    public function __construct(IOInterface $io, Composer $composer, $type = 'library', Filesystem $filesystem = null)
     {
         $this->composer = $composer;
         $this->downloadManager = $composer->getDownloadManager();
         $this->io = $io;
         $this->type = $type;
 
-        $this->filesystem = new Filesystem();
+        $this->filesystem = $filesystem ?: new Filesystem();
         $this->vendorDir = rtrim($composer->getConfig()->get('vendor-dir'), '/');
         $this->binDir = rtrim($composer->getConfig()->get('bin-dir'), '/');
     }
@@ -157,8 +158,12 @@ class LibraryInstaller implements InstallerInterface
 
     protected function updateCode(PackageInterface $initial, PackageInterface $target)
     {
-        $downloadPath = $this->getInstallPath($initial);
-        $this->downloadManager->update($initial, $target, $downloadPath);
+        $initialDownloadPath = $this->getInstallPath($initial);
+        $targetDownloadPath = $this->getInstallPath($target);
+        if ($targetDownloadPath !== $initialDownloadPath) {
+            $this->filesystem->copyThenRemove($initialDownloadPath, $targetDownloadPath);
+        }
+        $this->downloadManager->update($initial, $target, $targetDownloadPath);
     }
 
     protected function removeCode(PackageInterface $package)
diff --git a/src/Composer/Util/Filesystem.php b/src/Composer/Util/Filesystem.php
index 3dade2ce9..bdef6e402 100644
--- a/src/Composer/Util/Filesystem.php
+++ b/src/Composer/Util/Filesystem.php
@@ -129,15 +129,12 @@ class Filesystem
     {
         $it = new RecursiveDirectoryIterator($source, RecursiveDirectoryIterator::SKIP_DOTS);
         $ri = new RecursiveIteratorIterator($it, RecursiveIteratorIterator::SELF_FIRST);
-
-        if (!file_exists($target)) {
-            mkdir($target, 0777, true);
-        }
+        $this->ensureDirectoryExists($target);
 
         foreach ($ri as $file) {
             $targetPath = $target . DIRECTORY_SEPARATOR . $ri->getSubPathName();
             if ($file->isDir()) {
-                mkdir($targetPath);
+                $this->ensureDirectoryExists($targetPath);
             } else {
                 copy($file->getPathname(), $targetPath);
             }
diff --git a/tests/Composer/Test/Installer/LibraryInstallerTest.php b/tests/Composer/Test/Installer/LibraryInstallerTest.php
index 5ea4f076b..245969618 100644
--- a/tests/Composer/Test/Installer/LibraryInstallerTest.php
+++ b/tests/Composer/Test/Installer/LibraryInstallerTest.php
@@ -131,15 +131,31 @@ class LibraryInstallerTest extends TestCase
      */
     public function testUpdate()
     {
-        $library = new LibraryInstaller($this->io, $this->composer);
+        $filesystem = $this->getMockBuilder('Composer\Util\Filesystem')
+          ->getMock();
+        $filesystem
+          ->expects($this->once())
+          ->method('copyThenRemove')
+          ->with($this->vendorDir.'/package1', $this->vendorDir.'/package1/newtarget');
+
         $initial = $this->createPackageMock();
         $target  = $this->createPackageMock();
 
         $initial
-            ->expects($this->any())
+            ->expects($this->once())
             ->method('getPrettyName')
             ->will($this->returnValue('package1'));
 
+        $target
+            ->expects($this->once())
+            ->method('getPrettyName')
+            ->will($this->returnValue('package1'));
+
+        $target
+            ->expects($this->once())
+            ->method('getTargetDir')
+            ->will($this->returnValue('newtarget'));
+
         $this->repository
             ->expects($this->exactly(3))
             ->method('hasPackage')
@@ -148,7 +164,7 @@ class LibraryInstallerTest extends TestCase
         $this->dm
             ->expects($this->once())
             ->method('update')
-            ->with($initial, $target, $this->vendorDir.'/package1');
+            ->with($initial, $target, $this->vendorDir.'/package1/newtarget');
 
         $this->repository
             ->expects($this->once())
@@ -160,6 +176,7 @@ class LibraryInstallerTest extends TestCase
             ->method('addPackage')
             ->with($target);
 
+        $library = new LibraryInstaller($this->io, $this->composer, 'library', $filesystem);
         $library->update($this->repository, $initial, $target);
         $this->assertFileExists($this->vendorDir, 'Vendor dir should be created');
         $this->assertFileExists($this->binDir, 'Bin dir should be created');
diff --git a/tests/Composer/Test/Plugin/PluginInstallerTest.php b/tests/Composer/Test/Plugin/PluginInstallerTest.php
index 3b64f2699..2502dded9 100644
--- a/tests/Composer/Test/Plugin/PluginInstallerTest.php
+++ b/tests/Composer/Test/Plugin/PluginInstallerTest.php
@@ -20,6 +20,7 @@ use Composer\Package\Loader\ArrayLoader;
 use Composer\Package\PackageInterface;
 use Composer\Plugin\PluginManager;
 use Composer\Autoload\AutoloadGenerator;
+use Composer\Util\Filesystem;
 
 class PluginInstallerTest extends \PHPUnit_Framework_TestCase
 {
@@ -30,13 +31,17 @@ class PluginInstallerTest extends \PHPUnit_Framework_TestCase
     protected $repository;
     protected $io;
     protected $autoloadGenerator;
+    protected $directory;
 
     protected function setUp()
     {
         $loader = new JsonLoader(new ArrayLoader());
         $this->packages = array();
+        $this->directory = sys_get_temp_dir() . '/' . uniqid();
         for ($i = 1; $i <= 4; $i++) {
-            $this->packages[] = $loader->load(__DIR__.'/Fixtures/plugin-v'.$i.'/composer.json');
+            $filename = '/Fixtures/plugin-v'.$i.'/composer.json';
+            mkdir(dirname($this->directory . $filename), 0777, TRUE);
+            $this->packages[] = $loader->load(__DIR__ . $filename);
         }
 
         $dm = $this->getMockBuilder('Composer\Downloader\DownloadManager')
@@ -77,13 +82,19 @@ class PluginInstallerTest extends \PHPUnit_Framework_TestCase
 
         $config->merge(array(
             'config' => array(
-                'vendor-dir' => __DIR__.'/Fixtures/',
-                'home' => __DIR__.'/Fixtures',
-                'bin-dir' => __DIR__.'/Fixtures/bin',
+                'vendor-dir' => $this->directory.'/Fixtures/',
+                'home' => $this->directory.'/Fixtures',
+                'bin-dir' => $this->directory.'/Fixtures/bin',
             ),
         ));
     }
 
+    protected function tearDown()
+    {
+        $filesystem = new Filesystem();
+        $filesystem->removeDirectory($this->directory);
+    }
+
     public function testInstallNewPlugin()
     {
         $this->repository