diff --git a/pip/req/req_set.py b/pip/req/req_set.py
index a4e6b0e161b..820837ae0a2 100644
--- a/pip/req/req_set.py
+++ b/pip/req/req_set.py
@@ -718,6 +718,7 @@ def install(self, install_options, global_options=(), *args, **kwargs):
         the packages)
         """
         to_install = self._to_install()
+        editable_reinstall = False
 
         if to_install:
             logger.info(
@@ -734,6 +735,23 @@ def install(self, install_options, global_options=(), *args, **kwargs):
                     )
                     with indent_log():
                         requirement.uninstall(auto_confirm=True)
+
+                if requirement.installed_version and requirement.editable:
+                    # If we have an existing installation but are
+                    # re-installing as editable, make sure we remove
+                    # the existing version.  Note that with
+                    # setuptools<25 this is not strictly required, as
+                    # there setuptools will modify easy-install.pth to
+                    # put the "develop" mode install first in sys.path
+                    # (see SETUPTOOLS_SYS_PATH_TECHNIQUE), effectively
+                    # overwriting the prior installed version.
+                    logger.info(
+                        'Found prior install %s, reinstalling for develop mode'
+                        % requirement.installed_version)
+                    with indent_log():
+                        requirement.uninstall(auto_confirm=True)
+                        editable_reinstall = True
+
                 try:
                     requirement.install(
                         install_options,
@@ -743,12 +761,12 @@ def install(self, install_options, global_options=(), *args, **kwargs):
                     )
                 except:
                     # if install did not succeed, rollback previous uninstall
-                    if (requirement.conflicts_with and not
-                            requirement.install_succeeded):
+                    if ((requirement.conflicts_with or editable_reinstall) and
+                            not requirement.install_succeeded):
                         requirement.rollback_uninstall()
                     raise
                 else:
-                    if (requirement.conflicts_with and
+                    if ((requirement.conflicts_with or editable_reinstall) and
                             requirement.install_succeeded):
                         requirement.commit_uninstall()
                 requirement.remove_temporary_source()
diff --git a/tests/functional/test_install.py b/tests/functional/test_install.py
index 1440f3335f9..967487f4596 100644
--- a/tests/functional/test_install.py
+++ b/tests/functional/test_install.py
@@ -12,7 +12,7 @@
 from tests.lib import (pyversion, pyversion_tuple,
                        _create_test_package, _create_svn_repo, path_to_url,
                        requirements_file)
-from tests.lib.local_repos import local_checkout
+from tests.lib.local_repos import local_checkout, local_repo
 from tests.lib.path import Path
 
 
@@ -1026,3 +1026,25 @@ def test_double_install_fail(script, data):
     msg = ("Double requirement given: pip==7.1.2 (already in pip==*, "
            "name='pip')")
     assert msg in result.stderr
+
+
+@pytest.mark.network
+def test_update_to_develop(script, tmpdir):
+    """
+    Test updating from install to develop mode removes original package
+    """
+    path = local_repo(
+        'git+http://github.com/pypa/pip-test-package.git',
+        tmpdir.join("cache"),
+    )
+
+    # regular install, then re-install with develop mode
+    result = script.pip(
+        'install', '%s' % path, expect_error=False)
+    result = script.pip(
+        'install', '-e', '%s' % path, expect_error=False)
+
+    # make sure we have overwritten the non-develop install with the
+    # git version.
+    result = script.pip('freeze', expect_stderr=True)
+    assert 'pip-test-package.git' in result.stdout