diff --git a/bin/compile b/bin/compile
index 6df321dd..eab72fff 100755
--- a/bin/compile
+++ b/bin/compile
@@ -216,7 +216,7 @@ prune_devdependencies() {
     yarn_prune_devdependencies "$BUILD_DIR"
   else
     npm_prune_devdependencies "$BUILD_DIR"
-  fi 
+  fi
 }
 
 header "Pruning devDependencies"
diff --git a/lib/dependencies.sh b/lib/dependencies.sh
index 6c1d109c..9492c694 100644
--- a/lib/dependencies.sh
+++ b/lib/dependencies.sh
@@ -87,26 +87,31 @@ log_build_scripts() {
 
 yarn_node_modules() {
   local build_dir=${1:-}
+  local production=${YARN_PRODUCTION:-false}
 
   echo "Installing node modules (yarn.lock)"
   cd "$build_dir"
-  yarn install --frozen-lockfile --ignore-engines 2>&1
+  yarn install --production=$production --frozen-lockfile --ignore-engines 2>&1
 }
 
 yarn_prune_devdependencies() {
   local build_dir=${1:-} 
 
-  echo "Pruning devDependencies (yarn.lock)"
-  cd "$build_dir" 
-  if yarn_supports_frozen_lockfile; then
+  if [ $NODE_ENV != "production" ]; then
+    echo "Skipping because NODE_ENV != 'production'"
+    return 0
+  elif [ -n "$YARN_PRODUCTION" ] && [ "$YARN_PRODUCTION" != "true" ]; then
+    echo "Skipping because YARN_PRODUCTION != 'true'"
+    return 0
+  else 
+    cd "$build_dir" 
     yarn install --frozen-lockfile --ignore-engines --ignore-scripts --prefer-offline 2>&1
-  else
-    yarn install --pure-lockfile --ignore-engines --ignore-scripts --prefer-offline 2>&1
   fi
 }
 
 npm_node_modules() {
   local build_dir=${1:-}
+  local production=${NPM_CONFIG_PRODUCTION:-false}
 
   if [ -e $build_dir/package.json ]; then
     cd $build_dir
@@ -118,7 +123,7 @@ npm_node_modules() {
     else
       echo "Installing node modules (package.json)"
     fi
-    npm install --production=false --unsafe-perm --userconfig $build_dir/.npmrc 2>&1
+    npm install --production=$production --unsafe-perm --userconfig $build_dir/.npmrc 2>&1
   else
     echo "Skipping (no package.json)"
   fi
@@ -144,7 +149,21 @@ npm_rebuild() {
 
 npm_prune_devdependencies() {
   local build_dir=${1:-} 
-
-  cd "$build_dir" 
-  npm prune --userconfig $build_dir/.npmrc 2>&1
+  local npm_version=$(npm --version)
+
+  if [ $NODE_ENV != "production" ]; then
+    echo "Skipping because NODE_ENV != 'production'"
+    return 0
+  elif [ -n "$NPM_CONFIG_PRODUCTION" ] && [ "$NPM_CONFIG_PRODUCTION" != "true" ]; then
+    echo "Skipping because NPM_CONFIG_PRODUCTION != 'true'"
+    return 0
+  elif [ $npm_version == "5.3.0" ]; then
+    mcount "skip-prune-issue-npm-5.3.0"
+    echo "Skipping because npm 5.3.0 fails when running 'npm prune' due to a known issue"
+    echo "https://github.com/npm/npm/issues/17781"
+    return 0
+  else
+    cd "$build_dir" 
+    npm prune --userconfig $build_dir/.npmrc 2>&1
+  fi
 }
diff --git a/lib/environment.sh b/lib/environment.sh
index 0c63c93c..7f1b42d0 100644
--- a/lib/environment.sh
+++ b/lib/environment.sh
@@ -16,7 +16,6 @@ platform="$os-$cpu"
 export JQ="$BP_DIR/vendor/jq-$os"
 
 create_default_env() {
-  export NPM_CONFIG_PRODUCTION=${NPM_CONFIG_PRODUCTION:-true}
   export NPM_CONFIG_LOGLEVEL=${NPM_CONFIG_LOGLEVEL:-error}
   export NODE_MODULES_CACHE=${NODE_MODULES_CACHE:-true}
   export NODE_ENV=${NODE_ENV:-production}
diff --git a/lib/failure.sh b/lib/failure.sh
index 1eb23b08..f6e38c37 100644
--- a/lib/failure.sh
+++ b/lib/failure.sh
@@ -122,8 +122,7 @@ fail_yarn_outdated() {
   local log_file="$1"
   local yarn_engine=$(read_json "$BUILD_DIR/package.json" ".engines.yarn")
 
-  if grep -qi 'error: unknown option .--frozen-lockfile' "$log_file"; then
-    echo "ran"
+  if grep -qi 'error .install. has been replaced with .add. to add new dependencies' "$log_file"; then
     mcount "failures.outdated-yarn"
     echo ""
     warn "Outdated Yarn version: $yarn_engine
diff --git a/test/fixtures/dev-dependencies/README.md b/test/fixtures/dependencies-yarn/README.md
similarity index 100%
rename from test/fixtures/dev-dependencies/README.md
rename to test/fixtures/dependencies-yarn/README.md
diff --git a/test/fixtures/dependencies-yarn/package.json b/test/fixtures/dependencies-yarn/package.json
new file mode 100644
index 00000000..41804472
--- /dev/null
+++ b/test/fixtures/dependencies-yarn/package.json
@@ -0,0 +1,22 @@
+{
+  "name": "node-buildpack-test-app",
+  "version": "0.0.1",
+  "description": "node buildpack integration test app",
+  "repository": {
+    "type": "git",
+    "url": "http://github.com/example/example.git"
+  },
+  "dependencies": {
+    "hashish": "*"
+  },
+  "license": "MIT",
+  "engines": {
+    "yarn": "1.4.0"
+  },
+  "devDependencies": {
+    "lodash": "^2.4.1"
+  },
+  "scripts": {
+    "heroku-postbuild": "ls node_modules"
+  }
+}
diff --git a/test/fixtures/dependencies-yarn/yarn.lock b/test/fixtures/dependencies-yarn/yarn.lock
new file mode 100644
index 00000000..b1e8c7bb
--- /dev/null
+++ b/test/fixtures/dependencies-yarn/yarn.lock
@@ -0,0 +1,17 @@
+# THIS IS AN AUTOGENERATED FILE. DO NOT EDIT THIS FILE DIRECTLY.
+# yarn lockfile v1
+
+
+hashish@*:
+  version "0.0.4"
+  resolved "https://registry.yarnpkg.com/hashish/-/hashish-0.0.4.tgz#6d60bc6ffaf711b6afd60e426d077988014e6554"
+  dependencies:
+    traverse ">=0.2.4"
+
+lodash@^2.4.1:
+  version "2.4.2"
+  resolved "https://registry.yarnpkg.com/lodash/-/lodash-2.4.2.tgz#fadd834b9683073da179b3eae6d9c0d15053f73e"
+
+traverse@>=0.2.4:
+  version "0.6.6"
+  resolved "https://registry.yarnpkg.com/traverse/-/traverse-0.6.6.tgz#cbdf560fd7b9af632502fed40f918c157ea97137"
diff --git a/test/fixtures/dependencies/README.md b/test/fixtures/dependencies/README.md
new file mode 100644
index 00000000..cda334ae
--- /dev/null
+++ b/test/fixtures/dependencies/README.md
@@ -0,0 +1 @@
+A fake README, to keep npm from polluting stderr.
\ No newline at end of file
diff --git a/test/fixtures/dev-dependencies/package.json b/test/fixtures/dependencies/package.json
similarity index 80%
rename from test/fixtures/dev-dependencies/package.json
rename to test/fixtures/dependencies/package.json
index 020ca43d..7ccd8356 100644
--- a/test/fixtures/dev-dependencies/package.json
+++ b/test/fixtures/dependencies/package.json
@@ -10,9 +10,12 @@
     "hashish": "*"
   },
   "engines": {
-    "node": "~0.10.0"
+    "node": "8.x"
   },
   "devDependencies": {
     "lodash": "^2.4.1"
+  },
+  "scripts": {
+    "heroku-postbuild": "ls node_modules"
   }
 }
diff --git a/test/fixtures/dev-dependencies-2/package.json b/test/fixtures/dev-dependencies-2/package.json
deleted file mode 100644
index 798a87d0..00000000
--- a/test/fixtures/dev-dependencies-2/package.json
+++ /dev/null
@@ -1,16 +0,0 @@
-{
-  "name": "missing-devdeps-1",
-  "version": "1.0.0",
-  "description": "",
-  "main": "index.js",
-  "scripts": {
-    "postinstall": "node postinstall.js",
-    "heroku-postbuild": "node postinstall.js"
-  },
-  "keywords": [],
-  "author": "",
-  "license": "ISC",
-  "devDependencies": {
-    "lodash": "4.13.1"
-  }
-}
diff --git a/test/fixtures/dev-dependencies-2/postinstall.js b/test/fixtures/dev-dependencies-2/postinstall.js
deleted file mode 100644
index 39975bc8..00000000
--- a/test/fixtures/dev-dependencies-2/postinstall.js
+++ /dev/null
@@ -1 +0,0 @@
-const lodash = require('lodash');
diff --git a/test/run b/test/run
index 9ccd70b5..f58b5c7a 100755
--- a/test/run
+++ b/test/run
@@ -125,7 +125,7 @@ testOldYarn() {
   compile "yarn-old-deprecated-version"
   assertCaptured "Resolving yarn version ~0.16"
   assertCaptured "installing yarn (0.16."
-  assertCaptured "error: unknown option \`--frozen-lockfile'"
+  assertCaptured "error \`install\` has been replaced with \`add\`"
   assertCaptured "Outdated Yarn version"
   assertCaptured "Your application is specifying a requirement on an old version of Yarn"
   assertCaptured "https://devcenter.heroku.com/articles/nodejs-support#specifying-a-yarn-version"
@@ -644,13 +644,6 @@ testEnvVars() {
   assertCapturedSuccess
 }
 
-testNoEnvVars() {
-  env_dir=$(mktmpdir)
-  compile "stable-node" "$(mktmpdir)" $env_dir
-  assertCaptured "NPM_CONFIG_PRODUCTION=true"
-  assertCapturedSuccess
-}
-
 testNonFileEnvVars() {
   export NPM_CONFIG_FOO=bar
   export NPM_CONFIG_PRODUCTION=false
@@ -663,30 +656,71 @@ testNonFileEnvVars() {
 }
 
 testDevDependenciesInstalled() {
-  compile "dev-dependencies"
+  compile "dependencies"
   assertCaptured "lodash"
+  assertCaptured "Pruning devDependencies"
+  assertCaptured "removed 1 package"
   assertCapturedSuccess
-  compile "dev-dependencies-2"
+}
+
+testDevDependenciesInstalledYarn() {
+  compile "dependencies-yarn"
+  assertCaptured "lodash"
+  assertCaptured "Pruning devDependencies"
   assertCapturedSuccess
 }
 
-testDevDependenciesNotInstalled() {
+testDevDepenenciesWithNoPruning() {
   env_dir=$(mktmpdir)
-  echo "true" > $env_dir/NPM_CONFIG_PRODUCTION
-  compile "dev-dependencies" "$(mktmpdir)" $env_dir
-  assertNotCaptured "lodash"
-  assertNotCaptured "Pruning devDependencies"
+  echo "false" > $env_dir/NPM_CONFIG_PRODUCTION
+  compile "dependencies" "$(mktmpdir)" $env_dir
+  assertCaptured "lodash"
+  assertCaptured "Skipping because NPM_CONFIG_PRODUCTION != 'true'"
   assertCapturedSuccess
 }
 
-testDevDependencies() {
+testDevDepenenciesWithNoPruningYarn() {
   env_dir=$(mktmpdir)
-  echo "false" > $env_dir/NPM_CONFIG_PRODUCTION
-  compile "dev-dependencies" "$(mktmpdir)" $env_dir
+  echo "false" > $env_dir/YARN_PRODUCTION
+  compile "dependencies-yarn" "$(mktmpdir)" $env_dir
+  assertCaptured "lodash"
+  assertCaptured "Skipping because YARN_PRODUCTION != 'true'"
+  assertCapturedSuccess
+}
+
+testNodeEnvTestDepenencies() {
+  env_dir=$(mktmpdir)
+  echo "test" > $env_dir/NODE_ENV
+  compile "dependencies" "$(mktmpdir)" $env_dir
   assertCaptured "lodash"
+  assertCaptured "Skipping because NODE_ENV != 'production'"
   assertCapturedSuccess
 }
 
+testNodeEnvTestDepenenciesYarn() {
+  env_dir=$(mktmpdir)
+  echo "test" > $env_dir/NODE_ENV
+  compile "dependencies-yarn" "$(mktmpdir)" $env_dir
+  assertCaptured "lodash"
+  assertCaptured "Skipping because NODE_ENV != 'production'"
+  assertCapturedSuccess
+}
+
+testOnlyDependenciesInstalled() {
+  env_dir=$(mktmpdir)
+  echo "true" > $env_dir/NPM_CONFIG_PRODUCTION
+  compile "dependencies" "$(mktmpdir)" $env_dir
+  assertNotCaptured "lodash"
+  assertCapturedSuccess
+}
+
+testOnlyDependenciesInstalledYarn() {
+  env_dir=$(mktmpdir)
+  echo "true" > $env_dir/YARN_PRODUCTION
+  compile "dependencies-yarn" "$(mktmpdir)" $env_dir
+  assertNotCaptured "lodash"
+  assertCapturedSuccess
+}
 
 testOptionalDependencies() {
   env_dir=$(mktmpdir)
@@ -768,6 +802,7 @@ testNodeEnv() {
   assertCaptured "preinstall: production"
   assertCaptured "postinstall: production"
   assertCaptured "heroku-postbuild: production"
+  # cat $STD_OUT
   assertCapturedSuccess
 }
 
@@ -786,6 +821,9 @@ testNodeEnvNpmConfigProductionFalse() {
 # https://github.com/npm/npm/issues/17781
 testNpmPrune53Issue() {
   compile "npm-prune-5-3-issue"
+  assertCaptured "npm 5.3.0 installed"
+  assertCaptured "Skipping because npm 5.3.0 fails"
+  assertCaptured "https://github.com/npm/npm/issues/17781"
   assertCapturedSuccess
 }
 
@@ -849,6 +887,10 @@ compileTest() {
   for f in ${compile_dir}/.profile.d/*; do source $f > /dev/null 2> /dev/null ; done
 
   capture ${bp_dir}/bin/test ${compile_dir}
+
+  unset HOME
+  unset NODE_ENV
+  unset NODE_HOME
 }
 
 compileDir() {