diff --git a/packages/cli/src/args.ts b/packages/cli/src/args.ts
index f75dda67b..d20457cf8 100644
--- a/packages/cli/src/args.ts
+++ b/packages/cli/src/args.ts
@@ -70,8 +70,9 @@ export const globalArguments: ArgDescriptor[] = [
   {
     name: 'npm',
     type: Boolean,
-    description: 'Sets npm mode: component directory is "node_modules" ' +
-        'and the package name is read from package.json',
+    description: 'Sets npm mode: dependencies are installed from npm, ' +
+        'component directory is "node_modules" and the package name is read ' +
+        'from package.json',
   },
   {
     name: 'module-resolution',
diff --git a/packages/cli/src/commands/install.ts b/packages/cli/src/commands/install.ts
index 873d0ea6f..7b92d61ac 100644
--- a/packages/cli/src/commands/install.ts
+++ b/packages/cli/src/commands/install.ts
@@ -28,27 +28,34 @@ export class InstallCommand implements Command {
   aliases = ['i'];
 
   // TODO(justinfagnani): Expand and link to eventual doc on variants.
-  description = 'installs Bower dependencies, optionally installing "variants"';
+  description = 'Installs project dependencies from npm or Bower (optionally ' +
+      'installing "variants").';
 
   args = [
     {
       name: 'variants',
       type: Boolean,
       defaultValue: false,
-      description: 'Whether to install variants'
+      description: 'Whether to install Bower variants'
     },
     {
       name: 'offline',
       type: Boolean,
       defaultValue: false,
-      description: 'Don\'t hit the network'
+      description: 'Don\'t hit the network when installing Bower dependencies'
     },
   ];
 
-  async run(options: CommandOptions, _config: ProjectConfig): Promise<void> {
+  async run(options: CommandOptions, config: ProjectConfig): Promise<void> {
     // Defer dependency loading until this specific command is run
     const install =
         require('../install/install').install as typeof installTypeOnly;
+
+    // Use `npm` from the config, if available and not passed as a CLI arg.
+    if (options.npm === undefined && config.npm !== undefined) {
+      options.npm = config.npm;
+    }
+
     await install(options);
   }
 }
diff --git a/packages/cli/src/install/install.ts b/packages/cli/src/install/install.ts
index 973207750..e5505fc78 100644
--- a/packages/cli/src/install/install.ts
+++ b/packages/cli/src/install/install.ts
@@ -14,6 +14,7 @@
 
 import * as bower from 'bower';
 import {read as readBowerJson} from 'bower-json';
+import * as child_process from 'child_process';
 import * as path from 'path';
 import * as logging from 'plylog';
 
@@ -24,6 +25,14 @@ import BowerProject = require('bower/lib/core/Project');
 
 const logger = logging.getLogger('cli.install');
 
+async function exec(command: string, opts: child_process.ExecOptions) {
+  return new Promise<[string, string]>((resolve, reject) => {
+    child_process.exec(command, opts, (err, stdout, stderr) => {
+      err ? reject(err) : resolve([stdout, stderr]);
+    });
+  });
+}
+
 type JsonValue = string|number|boolean|null|JsonObject|JsonArray;
 
 interface JsonObject {
@@ -35,25 +44,36 @@ interface JsonArray extends Array<JsonValue> {}
 export interface Options {
   variants?: boolean;
   offline?: boolean;
+  npm?: boolean;
 }
 
 export async function install(options?: Options): Promise<void> {
+  if (options && options.npm) {
+    return npmInstall();
+  }
+
   // default to false
   const offline = options == null ? false : options.offline === true;
   // default to false
   const variants = options == null ? false : options.variants === true;
 
   await Promise.all([
-    installDefault(offline),
-    variants ? installVariants(offline) : Promise.resolve(),
+    bowerInstallDefault(offline),
+    variants ? bowerInstallVariants(offline) : Promise.resolve(),
   ]);
 }
 
+async function npmInstall() {
+  logger.info('Installing npm dependencies...');
+  await exec('npm install', {cwd: process.cwd()});
+  logger.info('Finished installing npm dependencies.');
+}
+
 /**
  * Performs a Bower install, optionally with a specific JSON configuration and
  * output directory.
  */
-async function _install(
+async function _bowerInstall(
     offline: boolean,
     bowerJson?: JsonObject,
     componentDirectory?: string,
@@ -90,13 +110,13 @@ async function _install(
   await project.install([], {save: false, offline}, config);
 }
 
-async function installDefault(offline: boolean): Promise<void> {
+async function bowerInstallDefault(offline: boolean): Promise<void> {
   logger.info(`Installing default Bower components...`);
-  await _install(offline);
+  await _bowerInstall(offline);
   logger.info(`Finished installing default Bower components`);
 }
 
-async function installVariants(offline: boolean): Promise<void> {
+async function bowerInstallVariants(offline: boolean): Promise<void> {
   const bowerJson = await new Promise<any>((resolve, reject) => {
     const config = defaultBowerConfig({
       save: false,
@@ -120,7 +140,7 @@ async function installVariants(offline: boolean): Promise<void> {
       const variantDirectory = `bower_components-${variantName}`;
       logger.info(
           `Installing variant ${variantName} to ${variantDirectory}...`);
-      await _install(offline, variantBowerJson, variantDirectory, variantName);
+      await _bowerInstall(offline, variantBowerJson, variantDirectory, variantName);
       logger.info(`Finished installing variant ${variantName}`);
     }));
   }
diff --git a/packages/cli/src/test/integration/integration_test.ts b/packages/cli/src/test/integration/integration_test.ts
index 4bd0079ac..6d5e27877 100644
--- a/packages/cli/src/test/integration/integration_test.ts
+++ b/packages/cli/src/test/integration/integration_test.ts
@@ -16,7 +16,6 @@ import {createApplicationGenerator} from '../../init/application/application';
 import {runCommand} from './run-command';
 import {createElementGenerator} from '../../init/element/element';
 import {createGithubGenerator} from '../../init/github';
-import * as child_process from 'child_process';
 
 // A zero priveledge github token of a nonce account, used for quota.
 const githubToken = '8d8622bf09bb1d85cb411b5e475a35e742a7ce35';
@@ -26,14 +25,6 @@ const githubToken = '8d8622bf09bb1d85cb411b5e475a35e742a7ce35';
 const isWindows = process.platform === 'win32';
 const skipOnWindows = isWindows ? test.skip : test;
 
-async function exec(command: string, opts: child_process.ExecOptions) {
-  return new Promise<[string, string]>((resolve, reject) => {
-    child_process.exec(command, opts, (err, stdout, stderr) => {
-      err ? reject(err) : resolve([stdout, stderr]);
-    });
-  });
-}
-
 suite('integration tests', function() {
 
   const binPath = path.join(__dirname, '../../../', 'bin', 'polymer.js');
@@ -48,9 +39,7 @@ suite('integration tests', function() {
           await runGenerator(createElementGenerator('polymer-3.x'))
               .withPrompts({name: 'my-element'})  // Mock the prompt answers
               .toPromise();
-      // TODO(#118): Use `polymer install` once it supports installing npm
-      // packages.
-      await exec('npm install', {cwd: dir});
+      await runCommand(binPath, ['install'], {cwd: dir});
 
       // TODO(#130): Add this back in when `polymer lint` has a Polymer 3
       // option.
diff --git a/packages/polyserve/src/args.ts b/packages/polyserve/src/args.ts
index 4d12904f8..9bc02680d 100644
--- a/packages/polyserve/src/args.ts
+++ b/packages/polyserve/src/args.ts
@@ -91,8 +91,9 @@ export const args: ArgDescriptor[] = [
   },
   {
     name: 'npm',
-    description: 'Sets npm mode: component directory is "node_modules" and ' +
-        'the package name is read from package.json',
+    description: 'Sets npm mode: dependencies are installed from npm, ' +
+        'component directory is "node_modules" and the package name is read ' +
+        'from package.json',
     type: Boolean,
   },
   {