diff --git a/bin/asdf b/bin/asdf
index 439fd1814..25279c5b1 100755
--- a/bin/asdf
+++ b/bin/asdf
@@ -7,6 +7,8 @@ fi
 
 # shellcheck source=lib/utils.bash
 . "$(dirname "$(dirname "$0")")/lib/utils.bash"
+# shellcheck source=lib/functions/versions.bash
+. "$(dirname "$(dirname "$0")")/lib/functions/versions.bash"
 
 find_cmd() {
   local cmd_dir="$1"
diff --git a/lib/commands/command-current.bash b/lib/commands/command-current.bash
index f4724626e..973d6cb8e 100644
--- a/lib/commands/command-current.bash
+++ b/lib/commands/command-current.bash
@@ -21,7 +21,8 @@ plugin_current_command() {
   local description=""
 
   IFS=' ' read -r -a versions <<<"$full_version"
-  for version in "${versions[@]}"; do
+  for version_spec in "${versions[@]}"; do
+    version="$(resolve_version_spec "$version_spec")"
     if ! (check_if_version_exists "$plugin_name" "$version"); then
       version_not_installed="$version"
     fi
diff --git a/lib/functions/versions.bash b/lib/functions/versions.bash
index 7d1d941d6..b796408a5 100644
--- a/lib/functions/versions.bash
+++ b/lib/functions/versions.bash
@@ -37,27 +37,7 @@ version_command() {
   declare -a resolved_versions
   local item
   for item in "${!versions[@]}"; do
-    IFS=':' read -r -a version_info <<<"${versions[$item]}"
-    if [ "${version_info[0]}" = "latest" ] && [ -n "${version_info[1]}" ]; then
-      version=$(latest_command "$plugin_name" "${version_info[1]}")
-    elif [ "${version_info[0]}" = "latest" ] && [ -z "${version_info[1]}" ]; then
-      version=$(latest_command "$plugin_name")
-    else
-      # if branch handles ref: || path: || normal versions
-      version="${versions[$item]}"
-    fi
-
-    # check_if_version_exists should probably handle if either param is empty string
-    if [ -z "$version" ]; then
-      exit 1
-    fi
-
-    if ! (check_if_version_exists "$plugin_name" "$version"); then
-      version_not_installed_text "$plugin_name" "$version" 1>&2
-      exit 1
-    fi
-
-    resolved_versions+=("$version")
+    resolved_versions+=("$(resolve_version_spec "${versions[$item]}")")
   done
 
   if [ -f "$file" ] && grep -q "^$plugin_name " "$file"; then
@@ -79,6 +59,32 @@ version_command() {
   fi
 }
 
+resolve_version_spec() {
+  local version_spec=$1
+
+  IFS=':' read -r -a version_info <<<"$version_spec"
+  if [ "${version_info[0]}" = "latest" ] && [ -n "${version_info[1]}" ]; then
+    version=$(latest_command "$plugin_name" "${version_info[1]}")
+  elif [ "${version_info[0]}" = "latest" ] && [ -z "${version_info[1]}" ]; then
+    version=$(latest_command "$plugin_name")
+  else
+    # if branch handles ref: || path: || normal versions
+    version="${versions[$item]}"
+  fi
+
+  # check_if_version_exists should probably handle if either param is empty string
+  if [ -z "$version" ]; then
+    exit 1
+  fi
+
+  if ! (check_if_version_exists "$plugin_name" "$version"); then
+    version_not_installed_text "$plugin_name" "$version" 1>&2
+    exit 1
+  fi
+
+  printf "%s\n" "$version"
+}
+
 list_all_command() {
   local plugin_name=$1
   local query=$2
diff --git a/lib/utils.bash b/lib/utils.bash
index 21978a929..8b40bf548 100644
--- a/lib/utils.bash
+++ b/lib/utils.bash
@@ -736,7 +736,8 @@ select_version() {
     version_and_path=$(find_versions "$plugin_name" "$search_path")
     IFS='|' read -r version_string _path <<<"$version_and_path"
     IFS=' ' read -r -a usable_plugin_versions <<<"$version_string"
-    for plugin_version in "${usable_plugin_versions[@]}"; do
+    for version_spec in "${usable_plugin_versions[@]}"; do
+      plugin_version="$(resolve_version_spec "$version_spec")"
       for plugin_and_version in "${shim_versions[@]}"; do
         local plugin_shim_name
         local plugin_shim_version
diff --git a/test/current_command.bats b/test/current_command.bats
index 687bc9da8..caf3659f0 100755
--- a/test/current_command.bats
+++ b/test/current_command.bats
@@ -47,6 +47,18 @@ teardown() {
   [ "$output" = "$expected" ]
 }
 
+@test "current should not error on version specifications like 'latest:'" {
+  cd "$PROJECT_DIR"
+  echo "dummy 1.2.0 latest:1.1" >>"$PROJECT_DIR/.tool-versions"
+  expected="dummy           1.2.0 latest:1.1 $PROJECT_DIR/.tool-versions"
+
+  asdf current "dummy"
+  echo "$expected"
+  run asdf current "dummy"
+  [ "$status" -eq 0 ]
+  [ "$output" = "$expected" ]
+}
+
 @test "current should derive from the legacy file if enabled" {
   cd "$PROJECT_DIR"
   echo 'legacy_version_file = yes' >"$HOME/.asdfrc"
diff --git a/test/install_command.bats b/test/install_command.bats
index bad99898a..418808762 100644
--- a/test/install_command.bats
+++ b/test/install_command.bats
@@ -45,6 +45,15 @@ teardown() {
   [ "$(cat "$ASDF_DIR/installs/dummy/1.2.0/version")" = "1.2.0" ]
 }
 
+@test "install_command installs the 'latest:' version in .tool-versions" {
+  cd "$PROJECT_DIR"
+  echo -n 'dummy latest:1.1' >".tool-versions"
+  run asdf install dummy
+  ls "$ASDF_DIR/installs/dummy/"
+  [ "$status" -eq 0 ]
+  [ "$(cat "$ASDF_DIR/installs/dummy/1.1.0/version")" = "1.1.0" ]
+}
+
 @test "install_command set ASDF_CONCURRENCY" {
   run asdf install dummy 1.0.0
   [ "$status" -eq 0 ]