diff --git a/Cabal/src/Distribution/Simple.hs b/Cabal/src/Distribution/Simple.hs
index ada1d6c7aad..3533cf78336 100644
--- a/Cabal/src/Distribution/Simple.hs
+++ b/Cabal/src/Distribution/Simple.hs
@@ -1094,6 +1094,7 @@ defaultInstallHook_setupHooks inst_hooks pkg_descr localbuildinfo _ flags = do
         defaultRegisterFlags
           { regInPlace = installInPlace flags
           , regPackageDB = installPackageDB flags
+          , registerCommonFlags = installCommonFlags flags
           }
   when (hasLibs pkg_descr) $
     register pkg_descr localbuildinfo registerFlags
diff --git a/cabal-testsuite/PackageTests/Install/DistPrefInstall/CHANGELOG.md b/cabal-testsuite/PackageTests/Install/DistPrefInstall/CHANGELOG.md
new file mode 100644
index 00000000000..3d5552b0ba5
--- /dev/null
+++ b/cabal-testsuite/PackageTests/Install/DistPrefInstall/CHANGELOG.md
@@ -0,0 +1,5 @@
+# Revision history for DistPrefInstall
+
+## 0.1.0.0 -- YYYY-mm-dd
+
+* First version. Released on an unsuspecting world.
diff --git a/cabal-testsuite/PackageTests/Install/DistPrefInstall/DistPrefInstall.cabal b/cabal-testsuite/PackageTests/Install/DistPrefInstall/DistPrefInstall.cabal
new file mode 100644
index 00000000000..536d26b3648
--- /dev/null
+++ b/cabal-testsuite/PackageTests/Install/DistPrefInstall/DistPrefInstall.cabal
@@ -0,0 +1,18 @@
+cabal-version:   3.12
+name:            DistPrefInstall
+version:         0.1.0.0
+license:         NONE
+author:          Matthew Pickering
+maintainer:      matthewtpickering@gmail.com
+build-type:      Simple
+extra-doc-files: CHANGELOG.md
+
+common warnings
+    ghc-options: -Wall
+
+library
+    import:           warnings
+    exposed-modules:  MyLib
+    build-depends:    base
+    hs-source-dirs:   src
+    default-language: Haskell2010
diff --git a/cabal-testsuite/PackageTests/Install/DistPrefInstall/Setup.hs b/cabal-testsuite/PackageTests/Install/DistPrefInstall/Setup.hs
new file mode 100644
index 00000000000..9a994af677b
--- /dev/null
+++ b/cabal-testsuite/PackageTests/Install/DistPrefInstall/Setup.hs
@@ -0,0 +1,2 @@
+import Distribution.Simple
+main = defaultMain
diff --git a/cabal-testsuite/PackageTests/Install/DistPrefInstall/setup.test.hs b/cabal-testsuite/PackageTests/Install/DistPrefInstall/setup.test.hs
new file mode 100644
index 00000000000..27b709e7070
--- /dev/null
+++ b/cabal-testsuite/PackageTests/Install/DistPrefInstall/setup.test.hs
@@ -0,0 +1,8 @@
+import Test.Cabal.Prelude
+
+main = setupTest $ recordMode DoNotRecord $ withPackageDb $ do
+    setup "configure" []
+    setup "build" []
+    setup "copy" []
+    setup "install" []
+    setup "sdist" []
diff --git a/cabal-testsuite/PackageTests/Install/DistPrefInstall/src/MyLib.hs b/cabal-testsuite/PackageTests/Install/DistPrefInstall/src/MyLib.hs
new file mode 100644
index 00000000000..e657c4403f6
--- /dev/null
+++ b/cabal-testsuite/PackageTests/Install/DistPrefInstall/src/MyLib.hs
@@ -0,0 +1,4 @@
+module MyLib (someFunc) where
+
+someFunc :: IO ()
+someFunc = putStrLn "someFunc"
diff --git a/changelog.d/t10416 b/changelog.d/t10416
new file mode 100644
index 00000000000..730ce47009a
--- /dev/null
+++ b/changelog.d/t10416
@@ -0,0 +1,11 @@
+synopsis: Fix ./setup install command
+packages: Cabal
+prs: #10417
+issues: #10416
+significance: high
+
+description: {
+
+- `./setup install` was failing with a `fromFlag NoFlag` error. It is now fixed.
+
+}