diff --git a/src/LibraryManager/Json/LibraryStateToFileConverter.cs b/src/LibraryManager/Json/LibraryStateToFileConverter.cs
index ef77e5807..4c75f9738 100644
--- a/src/LibraryManager/Json/LibraryStateToFileConverter.cs
+++ b/src/LibraryManager/Json/LibraryStateToFileConverter.cs
@@ -1,4 +1,9 @@
-using Microsoft.Web.LibraryManager.Contracts;
+// Copyright (c) .NET Foundation. All rights reserved.
+// Licensed under the Apache License, Version 2.0. See License.txt in the project root for license information.
+
+using System.Diagnostics.CodeAnalysis;
+using System.Text;
+using Microsoft.Web.LibraryManager.Contracts;
 using Microsoft.Web.LibraryManager.LibraryNaming;
 
 namespace Microsoft.Web.LibraryManager.Json
@@ -22,10 +27,14 @@ public ILibraryInstallationState ConvertToLibraryInstallationState(LibraryInstal
             }
 
             string provider = string.IsNullOrEmpty(stateOnDisk.ProviderId) ? _defaultProvider : stateOnDisk.ProviderId;
-            string destination = string.IsNullOrEmpty(stateOnDisk.DestinationPath) ? _defaultDestination : stateOnDisk.DestinationPath;
+
+            (string name, string version) = LibraryIdToNameAndVersionConverter.Instance.GetLibraryNameAndVersion(stateOnDisk.LibraryId, provider);
+            string destination = string.IsNullOrEmpty(stateOnDisk.DestinationPath) ? ExpandDestination(_defaultDestination, name, version) : stateOnDisk.DestinationPath;
 
             var state = new LibraryInstallationState()
             {
+                Name = name,
+                Version = version,
                 IsUsingDefaultDestination = string.IsNullOrEmpty(stateOnDisk.DestinationPath),
                 IsUsingDefaultProvider = string.IsNullOrEmpty(stateOnDisk.ProviderId),
                 ProviderId = provider,
@@ -33,11 +42,34 @@ public ILibraryInstallationState ConvertToLibraryInstallationState(LibraryInstal
                 Files = stateOnDisk.Files
             };
 
-            (state.Name, state.Version) = LibraryIdToNameAndVersionConverter.Instance.GetLibraryNameAndVersion(stateOnDisk.LibraryId, provider);
-
             return state;
         }
 
+        /// <summary>
+        /// Expands [Name] and [Version] tokens in the DefaultDestination
+        /// </summary>
+        /// <param name="destination">The default destination string</param>
+        /// <param name="name">Package name</param>
+        /// <param name="version">Package version</param>
+        /// <returns></returns>
+        [SuppressMessage("Globalization", "CA1307:Specify StringComparison for clarity", Justification = "Not available on net481, not needed here (caseless)")]
+        private string ExpandDestination(string destination, string name, string version)
+        {
+            if (!destination.Contains("["))
+            {
+                return destination;
+            }
+
+            // if the name contains a slash (either filesystem or scoped packages),
+            // trim that and only take the last segment.
+            int cutIndex = name.LastIndexOfAny(['/', '\\']);
+
+            StringBuilder stringBuilder = new StringBuilder(destination);
+            stringBuilder.Replace("[Name]", cutIndex == -1 ? name : name.Substring(cutIndex + 1));
+            stringBuilder.Replace("[Version]", version);
+            return stringBuilder.ToString();
+        }
+
         public LibraryInstallationStateOnDisk ConvertToLibraryInstallationStateOnDisk(ILibraryInstallationState state)
         {
             if (state == null)
diff --git a/test/LibraryManager.Test/Json/LibraryStateToFileConverterTests.cs b/test/LibraryManager.Test/Json/LibraryStateToFileConverterTests.cs
new file mode 100644
index 000000000..20b0cd23f
--- /dev/null
+++ b/test/LibraryManager.Test/Json/LibraryStateToFileConverterTests.cs
@@ -0,0 +1,109 @@
+// Copyright (c) .NET Foundation. All rights reserved.
+// Licensed under the Apache License, Version 2.0. See License.txt in the project root for license information.
+
+using System;
+using System.IO;
+using Microsoft.VisualStudio.TestTools.UnitTesting;
+using Microsoft.Web.LibraryManager.Contracts;
+using Microsoft.Web.LibraryManager.Json;
+using Microsoft.Web.LibraryManager.LibraryNaming;
+using Microsoft.Web.LibraryManager.Mocks;
+using Microsoft.Web.LibraryManager.Providers.Cdnjs;
+
+namespace Microsoft.Web.LibraryManager.Test.Json
+{
+    [TestClass]
+    public class LibraryStateToFileConverterTests
+    {
+        [TestInitialize]
+        public void Setup()
+        {
+            string cacheFolder = Environment.ExpandEnvironmentVariables(@"%localappdata%\Microsoft\Library\");
+            string projectFolder = Path.Combine(Path.GetTempPath(), "LibraryManager");
+            var hostInteraction = new HostInteraction(projectFolder, cacheFolder);
+            var dependencies = new Dependencies(hostInteraction, new CdnjsProviderFactory());
+            IProvider provider = dependencies.GetProvider("cdnjs");
+            LibraryIdToNameAndVersionConverter.Instance.EnsureInitialized(dependencies);
+        }
+
+        [TestMethod]
+        public void ConvertToLibraryInstallationState_NullStateOnDisk()
+        {
+            LibraryStateToFileConverter converter = new LibraryStateToFileConverter("provider", "destination");
+
+            ILibraryInstallationState result = converter.ConvertToLibraryInstallationState(null);
+
+            Assert.IsNull(result);
+        }
+
+        [TestMethod]
+        public void ConvertToLibraryInstallationState_UseDefaultProviderAndDestination()
+        {
+            LibraryStateToFileConverter converter = new LibraryStateToFileConverter("defaultProvider", "defaultDestination");
+
+            var stateOnDisk = new LibraryInstallationStateOnDisk
+            {
+                LibraryId = "libraryId",
+            };
+
+            ILibraryInstallationState result = converter.ConvertToLibraryInstallationState(stateOnDisk);
+
+            Assert.AreEqual("defaultProvider", result.ProviderId);
+            Assert.AreEqual("defaultDestination", result.DestinationPath);
+        }
+
+        [TestMethod]
+        public void ConvertToLibraryInstallationState_OverrideProviderAndDestination()
+        {
+            LibraryStateToFileConverter converter = new LibraryStateToFileConverter("defaultProvider", "defaultDestination");
+
+            var stateOnDisk = new LibraryInstallationStateOnDisk
+            {
+                LibraryId = "libraryId",
+                ProviderId = "provider",
+                DestinationPath = "destination",
+            };
+
+            ILibraryInstallationState result = converter.ConvertToLibraryInstallationState(stateOnDisk);
+
+            Assert.AreEqual("provider", result.ProviderId);
+            Assert.AreEqual("destination", result.DestinationPath);
+        }
+
+        [TestMethod]
+        public void ConvertToLibraryInstallationState_ExpandTokensInDefaultDestination()
+        {
+            LibraryStateToFileConverter converter = new LibraryStateToFileConverter("defaultProvider", "lib/[Name]/[Version]");
+
+            var stateOnDisk = new LibraryInstallationStateOnDisk
+            {
+                LibraryId = "testLibraryId@1.0",
+                // it needs to be a provider that uses the versioned naming scheme
+                ProviderId = "cdnjs",
+            };
+
+            ILibraryInstallationState result = converter.ConvertToLibraryInstallationState(stateOnDisk);
+
+            Assert.AreEqual("lib/testLibraryId/1.0", result.DestinationPath);
+        }
+
+        [TestMethod]
+        [DataRow("filesystem", "c:\\path\\to\\library")]
+        [DataRow("filesystem", "/path/to/library")]
+        [DataRow("cdnjs", "@scope/library@1.0.0")]
+        public void ConvertToLibraryInstallationState_ExpandTokensInDefaultDestination_NamesWithSlashes(string provider, string libraryId)
+        {
+            LibraryStateToFileConverter converter = new LibraryStateToFileConverter("defaultProvider", "lib/[Name]");
+
+            var stateOnDisk = new LibraryInstallationStateOnDisk
+            {
+                LibraryId = libraryId,
+                ProviderId = provider,
+            };
+
+            ILibraryInstallationState result = converter.ConvertToLibraryInstallationState(stateOnDisk);
+
+            Assert.AreEqual("lib/library", result.DestinationPath);
+        }
+    }
+}