diff --git a/lib/init.js b/lib/init.js
index 50e3bbc47..3e2dc1624 100755
--- a/lib/init.js
+++ b/lib/init.js
@@ -3,6 +3,8 @@ var fs = require('fs');
 var util = require('util');
 var path = require('path');
 var glob = require('glob');
+var exec = require('child_process').exec;
+var EventEmitter = require('events').EventEmitter;
 
 var helper = require('./helper');
 var logger = require('./logger');
@@ -43,6 +45,48 @@ var COLORS_OFF = {
   }
 };
 
+var logQueue = [];
+
+var printLogQueue = function() {
+  while (logQueue.length) {
+    logQueue.shift()();
+  }
+};
+
+var NODE_MODULES_DIR = path.resolve(__dirname, '../..');
+
+// Karma is not in node_modules, probably a symlink,
+// use current working dir.
+if (!/node_modules$/.test(NODE_MODULES_DIR)) {
+  NODE_MODULES_DIR = path.resolve('node_modules');
+}
+
+var installPackage = function(pkgName) {
+  log.debug('Missing plugin "%s". Installing...', pkgName);
+
+  var options = {
+    cwd: path.resolve(NODE_MODULES_DIR, '..')
+  };
+
+  exec('npm install ' + pkgName + ' --save-dev', options, function(err, stdout, stderr) {
+    // Put the logs into the queue and print them after answering current question.
+    // Otherwise the log would clobber the interactive terminal.
+    logQueue.push(function() {
+      if (!err) {
+        log.debug('%s successfully installed.', pkgName);
+      } else if (/is not in the npm registry/.test(stderr)) {
+        log.warn('Failed to install "%s". It is not in the NPM registry!\n' +
+                 '  Please install it manually.', pkgName);
+      } else if (/Error: EACCES/.test(stderr)) {
+        log.warn('Failed to install "%s". No permissions to write in %s!\n' +
+                 '  Please install it manually.', pkgName, options.cwd);
+      } else {
+        log.warn('Failed to install "%s"\n  Please install it manually.', pkgName);
+      }
+    });
+  });
+};
+
 var validatePattern = function(value) {
   if (!glob.sync(value).length) {
     log.warn('There is no file matching this pattern.\n' + colors.NYAN);
@@ -51,24 +95,23 @@ var validatePattern = function(value) {
 
 
 var validateBrowser = function(name) {
-  var moduleName = 'karma-' + name.toLowerCase().replace('canary', '') + '-launcher';
+  var pkgName = 'karma-' + name.toLowerCase().replace('canary', '') + '-launcher';
 
   try {
-    require(moduleName);
+    require(NODE_MODULES_DIR + '/' + pkgName);
   } catch (e) {
-    log.warn('Missing "%s" plugin.\n  npm install %s --save-dev' + colors.NYAN, moduleName,
-        moduleName);
+    installPackage(pkgName);
   }
 
   // TODO(vojta): check if the path resolves to a binary
 };
 
 var validateFramework = function(name) {
+  var pkgName = 'karma-' + name;
   try {
-    require('karma-' + name);
+    require(NODE_MODULES_DIR + '/' + pkgName);
   } catch (e) {
-    log.warn('Missing "karma-%s" plugin.\n  npm install karma-%s --save-dev' + colors.NYAN, name,
-        name);
+    installPackage(pkgName);
   }
 };
 
@@ -141,6 +184,8 @@ var StateMachine = function(rli) {
   var pendingQuestionId;
   var done;
 
+  EventEmitter.call(this);
+
   this.onKeypress = function(key) {
     if (!currentOptions || !key) {
       return;
@@ -221,6 +266,8 @@ var StateMachine = function(rli) {
       currentQuestion = questions.shift();
     }
 
+    this.emit('next_question', currentQuestion);
+
     if (currentQuestion) {
       pendingQuestionId = null;
 
@@ -251,6 +298,8 @@ var StateMachine = function(rli) {
   };
 };
 
+util.inherits(StateMachine, EventEmitter);
+
 
 var quote = function(value) {
   return '\'' + value + '\'';
@@ -355,6 +404,8 @@ exports.init = function(config) {
     process.exit(0);
   });
 
+  sm.on('next_question', printLogQueue);
+
   sm.process(questions, function(answers) {
     var cwd = process.cwd();
     var configFile = config.configFile || 'karma.conf.js';