diff --git a/doc/03-cli.md b/doc/03-cli.md
index 99d4272b8..7413d919c 100644
--- a/doc/03-cli.md
+++ b/doc/03-cli.md
@@ -284,7 +284,7 @@ uninstalled.
 * **--no-scripts:** Skips execution of scripts defined in `composer.json`.
 * **--update-no-dev:** Run the dependency update with the --no-dev option.
 * **--update-with-dependencies (-w):** Also update dependencies of the removed packages.
-  (Deprecrated, is now default behavior)
+  (Deprecated, is now default behavior)
 * **--update-with-all-dependencies (-W):** Allows all inherited dependencies to be updated,
   including those that are root requirements.
 * **--ignore-platform-reqs:** ignore all platform requirements (`php`, `hhvm`,
@@ -790,7 +790,8 @@ performance.
 * **--apcu:** Use APCu to cache found/not-found classes.
 * **--apcu-prefix:** Use a custom prefix for the APCu autoloader cache.
   Implicitly enables `--apcu`.
-* **--no-dev:** Disables autoload-dev rules.
+* **--no-dev:** Disables autoload-dev rules. (Deprecated: Composer now infers this
+  automatically according to the last `install` or `update` run.)
 * **--ignore-platform-reqs:** ignore all `php`, `hhvm`, `lib-*` and `ext-*`
   requirements and skip the [platform check](07-runtime.md#platform-check) for these.
   See also the [`platform`](06-config.md#platform) config option.
diff --git a/doc/articles/scripts.md b/doc/articles/scripts.md
index 9b5ca4a88..9290f7382 100644
--- a/doc/articles/scripts.md
+++ b/doc/articles/scripts.md
@@ -162,10 +162,11 @@ class MyClass
 }
 ```
 
-**Note:** During a composer install or update process, a variable named
+**Note:** During a Composer `install` or `update` command run, a variable named
 `COMPOSER_DEV_MODE` will be added to the environment. If the command was run
 with the `--no-dev` flag, this variable will be set to 0, otherwise it will be
-set to 1.
+set to 1. The variable is also available while `dump-autoload` runs, and it
+will be set to same as the last `install` or `update` was run in.
 
 ## Event classes
 
diff --git a/src/Composer/Autoload/AutoloadGenerator.php b/src/Composer/Autoload/AutoloadGenerator.php
index fd5a594e5..6f4191443 100644
--- a/src/Composer/Autoload/AutoloadGenerator.php
+++ b/src/Composer/Autoload/AutoloadGenerator.php
@@ -26,6 +26,7 @@ use Composer\Semver\Constraint\MatchAllConstraint;
 use Composer\Util\Filesystem;
 use Composer\Script\ScriptEvents;
 use Composer\Util\PackageSorter;
+use Composer\Json\JsonFile;
 
 /**
  * @author Igor Wiedler <igor@wiedler.ch>
@@ -44,9 +45,9 @@ class AutoloadGenerator
     private $io;
 
     /**
-     * @var bool
+     * @var ?bool
      */
-    private $devMode = false;
+    private $devMode = null;
 
     /**
      * @var bool
@@ -144,6 +145,23 @@ class AutoloadGenerator
             $scanPsrPackages = true;
         }
         if ($this->runScripts) {
+            $installedJson = new JsonFile($config->get('vendor-dir').'/composer/installed.json');
+            $isDevInstall = null;
+            if ($installedJson->exists()) {
+                $installedJson = $installedJson->read();
+                $isDevInstall = isset($installedJson['dev']) ? $installedJson['dev'] : null;
+            }
+            // auto-set devMode based on whether dev dependencies are installed or not
+            if (null !== $isDevInstall && null === $this->devMode) {
+                $this->devMode = $isDevInstall;
+            }
+
+            // set COMPOSER_DEV_MODE in case not set yet so it is available in the dump-autoload autoload
+            if (!isset($_SERVER['COMPOSER_DEV_MODE'])) {
+                $_SERVER['COMPOSER_DEV_MODE'] = $this->devMode ? '1' : '0';
+                putenv('COMPOSER_DEV_MODE='.$_SERVER['COMPOSER_DEV_MODE']);
+            }
+
             $this->eventDispatcher->dispatchScript(ScriptEvents::PRE_AUTOLOAD_DUMP, $this->devMode, array(), array(
                 'optimize' => (bool) $scanPsrPackages,
             ));
diff --git a/src/Composer/Command/DumpAutoloadCommand.php b/src/Composer/Command/DumpAutoloadCommand.php
index 0b2413925..dd06139b8 100644
--- a/src/Composer/Command/DumpAutoloadCommand.php
+++ b/src/Composer/Command/DumpAutoloadCommand.php
@@ -35,7 +35,7 @@ class DumpAutoloadCommand extends BaseCommand
                 new InputOption('classmap-authoritative', 'a', InputOption::VALUE_NONE, 'Autoload classes from the classmap only. Implicitly enables `--optimize`.'),
                 new InputOption('apcu', null, InputOption::VALUE_NONE, 'Use APCu to cache found/not-found classes.'),
                 new InputOption('apcu-prefix', null, InputOption::VALUE_REQUIRED, 'Use a custom prefix for the APCu autoloader cache. Implicitly enables --apcu'),
-                new InputOption('no-dev', null, InputOption::VALUE_NONE, 'Disables autoload-dev rules.'),
+                new InputOption('no-dev', null, InputOption::VALUE_NONE, 'DEPRECATED: Disables autoload-dev rules. Composer now infers this automatically according to the last install or update run.'),
                 new InputOption('ignore-platform-req', null, InputOption::VALUE_REQUIRED | InputOption::VALUE_IS_ARRAY, 'Ignore a specific platform requirement (php & ext- packages).'),
                 new InputOption('ignore-platform-reqs', null, InputOption::VALUE_NONE, 'Ignore all platform requirements (php & ext- packages).'),
             ))
@@ -77,7 +77,10 @@ EOT
         $ignorePlatformReqs = $input->getOption('ignore-platform-reqs') ?: ($input->getOption('ignore-platform-req') ?: false);
 
         $generator = $composer->getAutoloadGenerator();
-        $generator->setDevMode(!$input->getOption('no-dev'));
+        if ($input->getOption('no-dev')) {
+            $this->getIO()->writeError('<warning>You are using the deprecated option "--no-dev". Composer now infers the value automatically according to the last install or update run.</warning>');
+            $generator->setDevMode(false);
+        }
         $generator->setClassMapAuthoritative($authoritative);
         $generator->setApcu($apcu, $apcuPrefix);
         $generator->setRunScripts(!$input->getOption('no-scripts'));
diff --git a/src/Composer/Installer.php b/src/Composer/Installer.php
index 1a7c5e694..ea3a6151a 100644
--- a/src/Composer/Installer.php
+++ b/src/Composer/Installer.php
@@ -302,7 +302,6 @@ class Installer
                 $this->io->writeError('<info>Generating autoload files</info>');
             }
 
-            $this->autoloadGenerator->setDevMode($this->devMode);
             $this->autoloadGenerator->setClassMapAuthoritative($this->classMapAuthoritative);
             $this->autoloadGenerator->setApcu($this->apcuAutoloader, $this->apcuAutoloaderPrefix);
             $this->autoloadGenerator->setRunScripts($this->runScripts);