diff --git a/Gruntfile.coffee b/Gruntfile.coffee
index a1a4b8520..73ca6e420 100644
--- a/Gruntfile.coffee
+++ b/Gruntfile.coffee
@@ -38,6 +38,6 @@ module.exports = (grunt) ->
     grunt.file.delete('bin/node_darwin_x64') if grunt.file.exists('bin/node_darwin_x64')
 
   grunt.registerTask('lint', ['coffeelint'])
-  grunt.registerTask('default', ['coffee', 'coffeelint:src'])
-  grunt.registerTask('test', ['clean', 'default', 'coffeelint:test', 'shell:test'])
+  grunt.registerTask('default', ['coffee', 'lint'])
+  grunt.registerTask('test', ['clean', 'default', 'shell:test'])
   grunt.registerTask('prepublish', ['clean', 'coffee', 'lint'])
diff --git a/spec/fixtures/install-multi-version.json b/spec/fixtures/install-multi-version.json
new file mode 100644
index 000000000..8bcf6134d
--- /dev/null
+++ b/spec/fixtures/install-multi-version.json
@@ -0,0 +1,26 @@
+{
+  "releases": {
+    "latest": "0.4.0"
+  },
+  "name": "multi-module",
+  "versions": {
+    "0.4.0": {
+      "engines": {
+        "atom": ">=2.0"
+      }
+    },
+    "0.3.0": {
+      "engines": {
+        "atom": ">=1.0"
+      },
+      "dist": {
+        "tarball": "http://localhost:3000/tarball/test-module-1.0.0.tgz"
+      }
+    },
+    "0.2.0": {
+      "engines": {
+        "atom": ">=1.0"
+      }
+    }
+  }
+}
diff --git a/spec/install-spec.coffee b/spec/install-spec.coffee
index 14bfe0ef0..a6cdbfb70 100644
--- a/spec/install-spec.coffee
+++ b/spec/install-spec.coffee
@@ -1,4 +1,5 @@
 path = require 'path'
+CSON = require 'season'
 fs = require 'fs-plus'
 temp = require 'temp'
 express = require 'express'
@@ -7,7 +8,7 @@ wrench = require 'wrench'
 apm = require '../lib/apm-cli'
 
 describe 'apm install', ->
-  atomHome = null
+  [atomHome, resourcePath] = []
 
   beforeEach ->
     spyOnToken()
@@ -16,6 +17,9 @@ describe 'apm install', ->
     atomHome = temp.mkdirSync('apm-home-dir-')
     process.env.ATOM_HOME = atomHome
 
+    resourcePath = temp.mkdirSync('atom-resource-path-')
+    process.env.ATOM_RESOURCE_PATH = resourcePath
+
   describe "when installing an atom package", ->
     server = null
 
@@ -41,6 +45,8 @@ describe 'apm install', ->
         response.sendfile path.join(__dirname, 'fixtures', 'test-module-with-symlink-5.0.0.tgz')
       app.get '/tarball/test-module-with-bin-2.0.0.tgz', (request, response) ->
         response.sendfile path.join(__dirname, 'fixtures', 'test-module-with-bin-2.0.0.tgz')
+      app.get '/packages/multi-module', (request, response) ->
+        response.sendfile path.join(__dirname, 'fixtures', 'install-multi-version.json')
 
       server =  http.createServer(app)
       server.listen(3000)
@@ -86,6 +92,35 @@ describe 'apm install', ->
           expect(fs.existsSync(path.join(testModuleDirectory, 'package.json'))).toBeTruthy()
           expect(callback.mostRecentCall.args[0]).toBeNull()
 
+      describe 'when multiple releases are available', ->
+        it 'installs the latest compatible version', ->
+          CSON.writeFileSync(path.join(resourcePath, 'package.json'), version: '1.5.0')
+          packageDirectory = path.join(atomHome, 'packages', 'test-module')
+
+          callback = jasmine.createSpy('callback')
+          apm.run(['install', 'multi-module'], callback)
+
+          waitsFor 'waiting for install to complete', 600000, ->
+            callback.callCount is 1
+
+          runs ->
+            expect(JSON.parse(fs.readFileSync(path.join(packageDirectory, 'package.json'))).version).toBe "1.0.0"
+            expect(callback.mostRecentCall.args[0]).toBeNull()
+
+        it 'logs an error when no compatible versions are available', ->
+          CSON.writeFileSync(path.join(resourcePath, 'package.json'), version: '0.9.0')
+          packageDirectory = path.join(atomHome, 'packages', 'test-module')
+
+          callback = jasmine.createSpy('callback')
+          apm.run(['install', 'multi-module'], callback)
+
+          waitsFor 'waiting for install to complete', 600000, ->
+            callback.callCount is 1
+
+          runs ->
+            expect(fs.existsSync(packageDirectory)).toBeFalsy()
+            expect(callback.mostRecentCall.args[0]).not.toBeNull()
+
     describe 'when multiple package names are specified', ->
       it 'installs all packages', ->
         testModuleDirectory = path.join(atomHome, 'packages', 'test-module')
@@ -200,3 +235,16 @@ describe 'apm install', ->
 
         runs ->
           expect(callback.mostRecentCall.args[0]).not.toBeNull()
+
+    describe 'when the package is bundled with Atom', ->
+      it 'logs a message to standard error', ->
+        CSON.writeFileSync(path.join(resourcePath, 'package.json'), packageDependencies: 'test-module': '1.0')
+
+        callback = jasmine.createSpy('callback')
+        apm.run(['install', 'test-module'], callback)
+
+        waitsFor 'waiting for install to complete', 600000, ->
+          callback.callCount is 1
+
+        runs ->
+          expect(console.error.mostRecentCall.args[0].length).toBeGreaterThan 0
diff --git a/src/apm-cli.coffee b/src/apm-cli.coffee
index d5d905396..ee66381a1 100644
--- a/src/apm-cli.coffee
+++ b/src/apm-cli.coffee
@@ -35,6 +35,7 @@ commandClasses = [
   require './login'
   require './publish'
   require './rebuild'
+  require './rebuild-module-cache'
   require './search'
   require './star'
   require './stars'
diff --git a/src/dedupe.coffee b/src/dedupe.coffee
index 3c42f8a16..9e4b88041 100644
--- a/src/dedupe.coffee
+++ b/src/dedupe.coffee
@@ -96,8 +96,9 @@ class Dedupe extends Command
     fs.makeTreeSync(@atomNodeDirectory)
 
   run: (options) ->
-    {callback} = options
+    {callback, cwd} = options
     options = @parseOptions(options.commandArgs)
+    options.cwd = cwd
 
     @createAtomDirectories()
 
diff --git a/src/install.coffee b/src/install.coffee
index 51374669c..d382a2daf 100644
--- a/src/install.coffee
+++ b/src/install.coffee
@@ -4,11 +4,13 @@ async = require 'async'
 _ = require 'underscore-plus'
 optimist = require 'optimist'
 CSON = require 'season'
+semver = require 'semver'
 temp = require 'temp'
 
 config = require './config'
 Command = require './command'
 fs = require './fs'
+RebuildModuleCache = require './rebuild-module-cache'
 request = require './request'
 
 module.exports =
@@ -125,6 +127,10 @@ class Install extends Command
             destination = path.join(@atomPackagesDirectory, child)
             do (source, destination) ->
               commands.push (callback) -> fs.cp(source, destination, callback)
+
+          commands.push (callback) => @buildModuleCache(pack.name, callback)
+          commands.push (callback) => @warmCompileCache(pack.name, callback)
+
           async.waterfall commands, (error) =>
             if error?
               @logFailure()
@@ -184,7 +190,7 @@ class Install extends Command
         message = body.message ? body.error ? body
         callback("Request for package information failed: #{message}")
       else
-        if latestVersion = body.releases.latest
+        if body.releases.latest
           callback(null, body)
         else
           callback("No releases available for #{packageName}")
@@ -273,14 +279,18 @@ class Install extends Command
         @logFailure()
         callback(error)
       else
-        commands = []
-        packageVersion ?= pack.releases.latest
+        packageVersion ?= @getLatestCompatibleVersion(pack)
+        unless packageVersion
+          @logFailure()
+          callback("No available version compatible with the installed Atom version: #{@installedAtomVersion}")
+
         {tarball} = pack.versions[packageVersion]?.dist ? {}
         unless tarball
           @logFailure()
           callback("Package version: #{packageVersion} not found")
           return
 
+        commands = []
         commands.push (callback) =>
           if packagePath = @getPackageCachePath(packageName, packageVersion)
             callback(null, packagePath)
@@ -376,6 +386,68 @@ class Install extends Command
     packages = fs.readFileSync(filePath, 'utf8')
     @sanitizePackageNames(packages.split(/\s/))
 
+  getResourcePath: (callback) ->
+    if @resourcePath
+      process.nextTick => callback(@resourcePath)
+    else
+      config.getResourcePath (@resourcePath) => callback(@resourcePath)
+
+  buildModuleCache: (packageName, callback) ->
+    packageDirectory = path.join(@atomPackagesDirectory, packageName)
+    rebuildCacheCommand = new RebuildModuleCache()
+    rebuildCacheCommand.rebuild packageDirectory, ->
+      # Ignore cache errors and just finish the install
+      callback()
+
+  warmCompileCache: (packageName, callback) ->
+    packageDirectory = path.join(@atomPackagesDirectory, packageName)
+
+    @getResourcePath (resourcePath) ->
+      try
+        CoffeeCache = require(path.join(resourcePath, 'src', 'coffee-cache'))
+
+        onDirectory = (directoryPath) ->
+          path.basename(directoryPath) isnt 'node_modules'
+
+        onFile = (filePath) ->
+          CoffeeCache.addPathToCache(filePath)
+
+        fs.traverseTreeSync(packageDirectory, onFile, onDirectory)
+      callback(null)
+
+  isBundledPackage: (packageName, callback) ->
+    @getResourcePath (resourcePath) ->
+      try
+        atomMetadata = JSON.parse(fs.readFileSync(path.join(resourcePath, 'package.json')))
+      catch error
+        return callback(false)
+
+      callback(atomMetadata?.packageDependencies?.hasOwnProperty(packageName))
+
+  getLatestCompatibleVersion: (pack) ->
+    return pack.releases.latest unless @installedAtomVersion
+
+    latestVersion = null
+    for version, metadata of pack.versions ? {}
+      continue unless semver.valid(version)
+      continue unless metadata
+
+      engine = metadata.engines?.atom ? '*'
+      continue unless semver.validRange(engine)
+      continue unless semver.satisfies(@installedAtomVersion, engine)
+
+      latestVersion ?= version
+      latestVersion = version if semver.gt(version, latestVersion)
+
+    latestVersion
+
+  loadInstalledAtomVersion: (callback) ->
+    @getResourcePath (resourcePath) =>
+      try
+        {version} = require(path.join(resourcePath, 'package.json')) ? {}
+        @installedAtomVersion = version if semver.valid(version)
+      callback()
+
   run: (options) ->
     {callback} = options
     options = @parseOptions(options.commandArgs)
@@ -393,9 +465,16 @@ class Install extends Command
         if atIndex > 0
           version = name.substring(atIndex + 1)
           name = name.substring(0, atIndex)
-        @installPackage({name, version}, options, callback)
 
-    commands = []
+        @isBundledPackage name, (isBundledPackage) =>
+          if isBundledPackage
+            console.error """
+              The #{name} package is bundled with Atom and should not be explicitly installed.
+              You can run `apm uninstall #{name}` to uninstall it and then the version bundled
+              with Atom will be used.
+            """.yellow
+          @installPackage({name, version}, options, callback)
+
     if packagesFilePath
       try
         packageNames = @packageNamesFromPath(packagesFilePath)
@@ -404,6 +483,9 @@ class Install extends Command
     else
       packageNames = @packageNamesFromArgv(options.argv)
       packageNames.push('.') if packageNames.length is 0
+
+    commands = []
+    commands.push (callback) => @loadInstalledAtomVersion(callback)
     packageNames.forEach (packageName) ->
       commands.push (callback) -> installPackage(packageName, callback)
     async.waterfall(commands, callback)
diff --git a/src/links.coffee b/src/links.coffee
index ec8f0cfe7..55e36e984 100644
--- a/src/links.coffee
+++ b/src/links.coffee
@@ -47,6 +47,9 @@ class Links extends Command
         realpath = '???'.red
       "#{path.basename(link).yellow} -> #{realpath}"
 
-  run: ->
+  run: (options) ->
+    {callback} = options
+
     @logLinks(@devPackagesPath)
     @logLinks(@packagesPath)
+    callback()
diff --git a/src/rebuild-module-cache.coffee b/src/rebuild-module-cache.coffee
new file mode 100644
index 000000000..6d7341116
--- /dev/null
+++ b/src/rebuild-module-cache.coffee
@@ -0,0 +1,48 @@
+path = require 'path'
+async = require 'async'
+Command = require './command'
+config = require './config'
+fs = require './fs'
+
+module.exports =
+class RebuildModuleCache extends Command
+  @commandNames: ['rebuild-module-cache']
+
+  constructor: ->
+    @atomPackagesDirectory = path.join(config.getAtomDirectory(), 'packages')
+
+  getResourcePath: (callback) ->
+    if @resourcePath
+      process.nextTick => callback(@resourcePath)
+    else
+      config.getResourcePath (@resourcePath) => callback(@resourcePath)
+
+  rebuild: (packageDirectory, callback) ->
+    @getResourcePath (resourcePath) =>
+      try
+        @moduleCache ?= require(path.join(resourcePath, 'src', 'module-cache'))
+        @moduleCache.create(packageDirectory)
+      catch error
+        return callback(error)
+
+      callback()
+
+  run: (options) ->
+    {callback} = options
+
+    commands = []
+    fs.list(@atomPackagesDirectory).forEach (packageName) =>
+      packageDirectory = path.join(@atomPackagesDirectory, packageName)
+      return if fs.isSymbolicLinkSync(packageDirectory)
+      return unless fs.isDirectorySync(packageDirectory)
+
+      commands.push (callback) =>
+        process.stdout.write "Rebuilding #{packageName} module cache "
+        @rebuild packageDirectory, (error) =>
+          if error?
+            @logFailure()
+          else
+            @logSuccess()
+          callback(error)
+
+    async.waterfall(commands, callback)