diff --git a/.changeset/many-sloths-fry.md b/.changeset/many-sloths-fry.md
new file mode 100644
index 000000000..a64d094de
--- /dev/null
+++ b/.changeset/many-sloths-fry.md
@@ -0,0 +1,5 @@
+---
+"fnm": minor
+---
+
+`fnm install latest` will now tag the `latest` alias
diff --git a/e2e/__snapshots__/latest.test.ts.snap b/e2e/__snapshots__/latest.test.ts.snap
new file mode 100644
index 000000000..8b25da341
--- /dev/null
+++ b/e2e/__snapshots__/latest.test.ts.snap
@@ -0,0 +1,32 @@
+// Jest Snapshot v1, https://goo.gl/fbAQLP
+
+exports[`Bash installs latest: Bash 1`] = `
+"set -e
+eval "$(fnm env)"
+fnm install --latest
+(fnm ls) | grep latest || (echo "Expected output to contain latest" && exit 1)
+fnm use 'latest'"
+`;
+
+exports[`Fish installs latest: Fish 1`] = `
+"fnm env | source
+fnm install --latest
+begin; fnm ls; end | grep latest; or echo "Expected output to contain latest" && exit 1
+fnm use 'latest'"
+`;
+
+exports[`PowerShell installs latest: PowerShell 1`] = `
+"$ErrorActionPreference = "Stop"
+fnm env | Out-String | Invoke-Expression
+fnm install --latest
+$($__out__ = $(fnm ls | Select-String latest); if ($__out__ -eq $null) { exit 1 } else { $__out__ })
+fnm use 'latest'"
+`;
+
+exports[`Zsh installs latest: Zsh 1`] = `
+"set -e
+eval "$(fnm env)"
+fnm install --latest
+(fnm ls) | grep latest || (echo "Expected output to contain latest" && exit 1)
+fnm use 'latest'"
+`;
diff --git a/e2e/latest.test.ts b/e2e/latest.test.ts
new file mode 100644
index 000000000..8d2a0fdd6
--- /dev/null
+++ b/e2e/latest.test.ts
@@ -0,0 +1,19 @@
+import { script } from "./shellcode/script.js"
+import { Bash, Fish, PowerShell, Zsh } from "./shellcode/shells.js"
+import describe from "./describe.js"
+
+for (const shell of [Bash, Zsh, Fish, PowerShell]) {
+  describe(shell, () => {
+    test(`installs latest`, async () => {
+      await script(shell)
+        .then(shell.env({}))
+        .then(shell.call("fnm", ["install", "--latest"]))
+        .then(
+          shell.scriptOutputContains(shell.call("fnm", ["ls"]), "latest")
+        )
+        .then(shell.call("fnm", ["use", "'latest'"]))
+        .takeSnapshot(shell)
+        .execute(shell)
+    })
+  })
+}
diff --git a/src/commands/install.rs b/src/commands/install.rs
index 79013ad1d..a0539edca 100644
--- a/src/commands/install.rs
+++ b/src/commands/install.rs
@@ -156,25 +156,31 @@ impl Command for Install {
             enable_corepack(&version, config)?;
         }
 
-        if let UserVersion::Full(Version::Lts(lts_type)) = current_version {
-            let alias_name = Version::Lts(lts_type).v_str();
-            debug!(
-                "Tagging {} as alias for {}",
-                alias_name.cyan(),
-                version.v_str().cyan()
-            );
-            create_alias(config, &alias_name, &version)?;
-        }
-
         if !config.default_version_dir().exists() {
             debug!("Tagging {} as the default version", version.v_str().cyan());
             create_alias(config, "default", &version)?;
         }
 
+        if let Some(tagged_alias) = current_version.inferred_alias() {
+            tag_alias(config, &version, &tagged_alias)?;
+        }
+
         Ok(())
     }
 }
 
+fn tag_alias(config: &FnmConfig, matched_version: &Version, alias: &Version) -> Result<(), Error> {
+    let alias_name = alias.v_str();
+    debug!(
+        "Tagging {} as alias for {}",
+        alias_name.cyan(),
+        matched_version.v_str().cyan()
+    );
+    create_alias(config, &alias_name, matched_version)?;
+
+    Ok(())
+}
+
 fn enable_corepack(version: &Version, config: &FnmConfig) -> Result<(), Error> {
     let corepack_path = version.installation_path(config);
     let corepack_path = if cfg!(windows) {
diff --git a/src/user_version.rs b/src/user_version.rs
index 52c69a12f..eb43d7145 100644
--- a/src/user_version.rs
+++ b/src/user_version.rs
@@ -50,6 +50,15 @@ impl UserVersion {
             }
         }
     }
+
+    /// The inferred alias for the user version, if it exists.
+    pub fn inferred_alias(&self) -> Option<Version> {
+        match self {
+            UserVersion::Full(Version::Latest) => Some(Version::Latest),
+            UserVersion::Full(Version::Lts(lts_type)) => Some(Version::Lts(lts_type.clone())),
+            _ => None,
+        }
+    }
 }
 
 fn next_of<'a, T: FromStr, It: Iterator<Item = &'a str>>(i: &mut It) -> Option<T> {