diff --git a/mim/commands/install.py b/mim/commands/install.py
index f1ab503..21dbee0 100644
--- a/mim/commands/install.py
+++ b/mim/commands/install.py
@@ -129,7 +129,15 @@ def install(package: str,
     target_pkg, target_version = split_package_version(package)
 
     # whether install from local repo
-    is_install_local_repo = osp.isdir(osp.abspath(target_pkg)) and not find_url
+    if looks_like_path(target_pkg):
+        if is_installable_dir(target_pkg):
+            is_install_local_repo = True
+        else:
+            raise ValueError(
+                highlighted_error(
+                    f'{target_pkg} is not a installable directory'))
+    else:
+        is_install_local_repo = False
 
     # whether install master branch from github
     is_install_master = bool(not target_version and find_url)
@@ -240,6 +248,38 @@ def install(package: str,
     echo_success(f'Successfully installed {target_pkg}.')
 
 
+def looks_like_path(name: str) -> bool:
+    """Checks whether the string "looks like" a path on the filesystem.
+
+    This does not check whether the target actually exists, only judge from the
+    appearance.
+
+    Args:
+        name (str): The string to be checked.
+    """
+    if osp.sep in name:
+        return True
+    if osp.altsep is not None and osp.altsep in name:
+        return True
+    if name.startswith('.'):
+        return True
+    return False
+
+
+def is_installable_dir(name: str) -> bool:
+    """Check whether path is a directory containing setup.py.
+
+    Args:
+        name (str): The string to be checked.
+    """
+    path = osp.abspath(name)
+    if osp.isdir(path):
+        setup_py = osp.join(path, 'setup.py')
+        return osp.isfile(setup_py)
+    else:
+        return False
+
+
 def infer_find_url(package: str) -> str:
     """Try to infer find_url if possible.
 
diff --git a/tests/test_install.py b/tests/test_install.py
index 2a23481..afc15f7 100644
--- a/tests/test_install.py
+++ b/tests/test_install.py
@@ -64,12 +64,8 @@ def test_mmrepo_install():
         result = runner.invoke(install, ['./mmclassification', '--yes'])
         assert result.exit_code == 0
 
-        # mim install mmclassification
-        result = runner.invoke(install, ['mmclassification', '--yes'])
-        assert result.exit_code == 0
-
-        # mim install -e mmclassification
-        result = runner.invoke(install, ['-e', 'mmclassification', '--yes'])
+        # mim install -e ./mmclassification
+        result = runner.invoke(install, ['-e', './mmclassification', '--yes'])
         assert result.exit_code == 0
 
         os.chdir(current_root)