diff --git a/IPython/iplib.py b/IPython/iplib.py
index 612fa2e..90f2c38 100644
--- a/IPython/iplib.py
+++ b/IPython/iplib.py
@@ -1125,6 +1125,11 @@ class InteractiveShell(object,Magic):
                 print >> Term.cout
             print '*'*70
 
+        # Install mode should be re-entrant: if the install dir already exists,
+        # bail out cleanly
+        if mode == 'install' and os.path.isdir(ipythondir):
+            return
+
         cwd = os.getcwd()  # remember where we started
         glb = glob.glob
         print '*'*70
diff --git a/IPython/tests/test_iplib.py b/IPython/tests/test_iplib.py
index 42fa1b6..ce33d81 100644
--- a/IPython/tests/test_iplib.py
+++ b/IPython/tests/test_iplib.py
@@ -3,15 +3,25 @@
 
 import nose.tools as nt
 
+# Useful global ipapi object and main IPython one
+ip = _ip
+IP = ip.IP
+
 
 def test_reset():
     """reset must clear most namespaces."""
-    ip = _ip.IP
-    ip.reset()  # first, it should run without error
+    IP.reset()  # first, it should run without error
     # Then, check that most namespaces end up empty
-    for ns in ip.ns_refs_table:
-        if ns is ip.user_ns:
+    for ns in IP.ns_refs_table:
+        if ns is IP.user_ns:
             # The user namespace is reset with some data, so we can't check for
             # it being empty
             continue
         nt.assert_equals(len(ns),0)
+
+
+def test_user_setup():
+    """make sure that user_setup can be run re-entrantly in 'install' mode.
+    """
+    # This should basically run without errors or output.
+    IP.user_setup(ip.options.ipythondir,'','install')