diff --git a/src/Composer/Package/Loader/RootPackageLoader.php b/src/Composer/Package/Loader/RootPackageLoader.php
index fcdef2364..87769066f 100644
--- a/src/Composer/Package/Loader/RootPackageLoader.php
+++ b/src/Composer/Package/Loader/RootPackageLoader.php
@@ -70,6 +70,10 @@ class RootPackageLoader extends ArrayLoader
             $realPackage = $package->getAliasOf();
         }
 
+        if (isset($config['minimum-stability'])) {
+            $realPackage->setMinimumStability(VersionParser::normalizeStability($config['minimum-stability']));
+        }
+
         $aliases = array();
         $stabilityFlags = array();
         $references = array();
@@ -82,7 +86,7 @@ class RootPackageLoader extends ArrayLoader
                     $links[$link->getTarget()] = $link->getConstraint()->getPrettyString();
                 }
                 $aliases = $this->extractAliases($links, $aliases);
-                $stabilityFlags = $this->extractStabilityFlags($links, $stabilityFlags);
+                $stabilityFlags = $this->extractStabilityFlags($links, $stabilityFlags, $realPackage->getMinimumStability());
                 $references = $this->extractReferences($links, $references);
             }
         }
@@ -91,10 +95,6 @@ class RootPackageLoader extends ArrayLoader
         $realPackage->setStabilityFlags($stabilityFlags);
         $realPackage->setReferences($references);
 
-        if (isset($config['minimum-stability'])) {
-            $realPackage->setMinimumStability(VersionParser::normalizeStability($config['minimum-stability']));
-        }
-
         if (isset($config['prefer-stable'])) {
             $realPackage->setPreferStable((bool) $config['prefer-stable']);
         }
@@ -124,11 +124,12 @@ class RootPackageLoader extends ArrayLoader
         return $aliases;
     }
 
-    private function extractStabilityFlags(array $requires, array $stabilityFlags)
+    private function extractStabilityFlags(array $requires, array $stabilityFlags, $minimumStability)
     {
         $stabilities = BasePackage::$stabilities;
+        $minimumStability = $stabilities[$minimumStability];
         foreach ($requires as $reqName => $reqVersion) {
-            // parse explicit stability flags
+            // parse explicit stability flags to the most unstable
             if (preg_match('{^[^,\s]*?@('.implode('|', array_keys($stabilities)).')$}i', $reqVersion, $match)) {
                 $name = strtolower($reqName);
                 $stability = $stabilities[VersionParser::normalizeStability($match[1])];
@@ -141,12 +142,13 @@ class RootPackageLoader extends ArrayLoader
                 continue;
             }
 
-            // infer flags for requirements that have an explicit -dev or -beta version specified for example
+            // infer flags for requirements that have an explicit -dev or -beta version specified but only
+            // for those that are more unstable than the minimumStability or existing flags
             $reqVersion = preg_replace('{^([^,\s@]+) as .+$}', '$1', $reqVersion);
             if (preg_match('{^[^,\s@]+$}', $reqVersion) && 'stable' !== ($stabilityName = VersionParser::parseStability($reqVersion))) {
                 $name = strtolower($reqName);
                 $stability = $stabilities[$stabilityName];
-                if (isset($stabilityFlags[$name]) && $stabilityFlags[$name] > $stability) {
+                if ((isset($stabilityFlags[$name]) && $stabilityFlags[$name] > $stability) || ($minimumStability > $stability)) {
                     continue;
                 }
                 $stabilityFlags[$name] = $stability;
diff --git a/tests/Composer/Test/Package/Loader/RootPackageLoaderTest.php b/tests/Composer/Test/Package/Loader/RootPackageLoaderTest.php
index 6f4f53e19..e1a8781a1 100644
--- a/tests/Composer/Test/Package/Loader/RootPackageLoaderTest.php
+++ b/tests/Composer/Test/Package/Loader/RootPackageLoaderTest.php
@@ -14,6 +14,7 @@ namespace Composer\Test\Package\Loader;
 
 use Composer\Config;
 use Composer\Package\Loader\RootPackageLoader;
+use Composer\Package\BasePackage;
 use Composer\Test\Mock\ProcessExecutorMock;
 use Composer\Repository\RepositoryManager;
 
@@ -49,4 +50,40 @@ class RootPackageLoaderTest extends \PHPUnit_Framework_TestCase
 
         $this->assertEquals("dev-$commitHash", $package->getVersion());
     }
+
+    protected function loadPackage($data)
+    {
+        $manager = $this->getMockBuilder('\\Composer\\Repository\\RepositoryManager')
+            ->disableOriginalConstructor()
+            ->getMock();
+
+        $processExecutor = new ProcessExecutorMock(function($command, &$output = null, $cwd = null) {
+            return 1;
+        });
+
+        $config = new Config;
+        $config->merge(array('repositories' => array('packagist' => false)));
+
+        $loader = new RootPackageLoader($manager, $config);
+
+        return $loader->load($data);
+    }
+
+    public function testStabilityFlagsParsing()
+    {
+        $package = $this->loadPackage(array(
+            'require' => array(
+                'foo/bar' => '~2.1.0-beta2',
+                'bar/baz' => '1.0.x-dev as 1.2.0',
+                'qux/quux' => '1.0.*@rc',
+            ),
+            'minimum-stability' => 'alpha',
+        ));
+
+        $this->assertEquals('alpha', $package->getMinimumStability());
+        $this->assertEquals(array(
+            'bar/baz' => BasePackage::STABILITY_DEV,
+            'qux/quux' => BasePackage::STABILITY_RC,
+        ), $package->getStabilityFlags());
+    }
 }