diff --git a/lld/MachO/Driver.cpp b/lld/MachO/Driver.cpp
--- a/lld/MachO/Driver.cpp
+++ b/lld/MachO/Driver.cpp
@@ -827,8 +827,6 @@
     symtab->addDynamicLookup(arg->getValue());
 
   config->outputFile = args.getLastArgValue(OPT_o, "a.out");
-  config->installName =
-      args.getLastArgValue(OPT_install_name, config->outputFile);
   config->headerPad = args::getHex(args, OPT_headerpad, /*Default=*/32);
   config->headerPadMaxInstallNames =
       args.hasArg(OPT_headerpad_max_install_names);
@@ -850,6 +848,15 @@
   config->demangle = args.hasArg(OPT_demangle);
   config->implicitDylibs = !args.hasArg(OPT_no_implicit_dylibs);
 
+  if (const Arg *arg = args.getLastArg(OPT_install_name)) {
+    if (config->outputType != MH_DYLIB)
+      warn(arg->getAsString(args) + ": ignored, only has effect with -dylib");
+    else
+      config->installName = arg->getValue();
+  } else if (config->outputType == MH_DYLIB) {
+    config->installName = config->outputFile;
+  }
+
   if (args.hasArg(OPT_mark_dead_strippable_dylib)) {
     if (config->outputType != MH_DYLIB)
       warn("-mark_dead_strippable_dylib: ignored, only has effect with -dylib");
diff --git a/lld/test/MachO/install-name.s b/lld/test/MachO/install-name.s
new file mode 100644
--- /dev/null
+++ b/lld/test/MachO/install-name.s
@@ -0,0 +1,29 @@
+# REQUIRES: x86
+
+# RUN: llvm-mc -filetype=obj -triple=x86_64-apple-macos -o %t.o %s
+
+# RUN: %no_fatal_warnings_lld -o %t.exec %t.o -install_name foo 2>&1 \
+# RUN:     | FileCheck --check-prefix=WARN %s
+# RUN: llvm-objdump --macho --all-headers %t.exec \
+# RUN:     | FileCheck --check-prefix=NO-ID %s
+
+# RUN: %no_fatal_warnings_lld -bundle -o %t.bundle %t.o -install_name foo 2>&1 \
+# RUN:     | FileCheck --check-prefix=WARN %s
+# RUN: llvm-objdump --macho --all-headers %t.bundle \
+# RUN:     | FileCheck --check-prefix=NO-ID %s
+
+# RUN: %lld -dylib -o %t.dylib %t.o -install_name foo 2>&1
+# RUN: llvm-objdump --macho --all-headers %t.dylib \
+# RUN:     | FileCheck --check-prefix=ID %s
+
+# WARN: warning: -install_name foo: ignored, only has effect with -dylib
+
+# NO-ID-NOT: LC_ID_DYLIB
+
+# ID:          cmd LC_ID_DYLIB
+# ID-NEXT: cmdsize
+# LID-NEXT:   name foo
+
+.globl _main
+_main:
+  ret