diff --git a/tests/conda_env/support/advanced-pip/.gitignore b/tests/conda_env/support/advanced-pip/.gitignore
new file mode 100644
index 00000000000..85de9cf9334
--- /dev/null
+++ b/tests/conda_env/support/advanced-pip/.gitignore
@@ -0,0 +1 @@
+src
diff --git a/tests/conda_env/support/advanced-pip/another-project-requirements.txt b/tests/conda_env/support/advanced-pip/another-project-requirements.txt
new file mode 100644
index 00000000000..ffe2fce4989
--- /dev/null
+++ b/tests/conda_env/support/advanced-pip/another-project-requirements.txt
@@ -0,0 +1 @@
+six
diff --git a/tests/conda_env/support/advanced-pip/environment.yml b/tests/conda_env/support/advanced-pip/environment.yml
new file mode 100644
index 00000000000..3a67976643b
--- /dev/null
+++ b/tests/conda_env/support/advanced-pip/environment.yml
@@ -0,0 +1,29 @@
+name: advanced-pip-example
+
+dependencies:
+  - pip
+  - pip:
+
+    # Global options can be tweaked.
+    # For example, if you want to use a pypi mirror first:
+    - --index-url https://pypi.doubanio.com/simple
+    - --extra-index-url https://pypi.python.org/simple
+    # (check https://www.pypi-mirrors.org/)
+
+    # Current syntax still works
+    - xmltodict==0.10.2
+
+    # Install in editable mode.
+    # More natural than - "--editable=git+https://github.com/neithere/argh.git#egg=argh
+    - -e git+https://github.com/neithere/argh.git#egg=argh
+
+    # You could also specify a package in a directory.
+    # The directory can be relative to this environment file.
+    - -e ./module_to_install_in_editable_mode
+
+    # Use another requirements file.
+    # Note that here also we can use relative paths.
+    # pip will be run from the environment file directory, if provided.
+    - -r another-project-requirements.txt
+
+    # Anything else that pip requirement files allows should work seamlessly...
diff --git a/tests/conda_env/support/advanced-pip/module_to_install_in_editable_mode/setup.py b/tests/conda_env/support/advanced-pip/module_to_install_in_editable_mode/setup.py
new file mode 100644
index 00000000000..537550c86f0
--- /dev/null
+++ b/tests/conda_env/support/advanced-pip/module_to_install_in_editable_mode/setup.py
@@ -0,0 +1,6 @@
+from setuptools import setup
+
+setup(
+    name='module_to_install_in_editable_mode',
+    packages=[],
+)
diff --git a/tests/conda_env/test_create.py b/tests/conda_env/test_create.py
index ff9ade6b1f7..12ecd52d972 100644
--- a/tests/conda_env/test_create.py
+++ b/tests/conda_env/test_create.py
@@ -1,6 +1,7 @@
 # -*- coding: utf-8 -*-
 from __future__ import absolute_import, division, print_function
 
+from conda.egg_info import get_egg_info
 from conda.exports import text_type
 from contextlib import contextmanager
 from logging import getLogger, Handler
@@ -78,8 +79,8 @@ def make_temp_envs_dir():
         rmtree(envs_dir, ignore_errors=True)
 
 
-def package_is_installed(prefix, dist, exact=False):
-    packages = list(linked(prefix))
+def package_is_installed(prefix, dist, exact=False, pip=False):
+    packages = list(get_egg_info(prefix) if pip else linked(prefix))
     if '::' not in text_type(dist):
         packages = [p.dist_name for p in packages]
     if exact:
@@ -87,8 +88,8 @@ def package_is_installed(prefix, dist, exact=False):
     return any(p.startswith(dist) for p in packages)
 
 
-def assert_package_is_installed(prefix, package, exact=False):
-    if not package_is_installed(prefix, package, exact):
+def assert_package_is_installed(prefix, package, exact=False, pip=False):
+    if not package_is_installed(prefix, package, exact, pip):
         print(list(linked(prefix)))
         raise AssertionError("package {0} is not in prefix".format(package))
 
@@ -114,3 +115,17 @@ def test_create_update(self):
             run_command(Commands.UPDATE, envs_dir, env_name, utils.support_file('example/environment_pinned_updated.yml'))
             assert_package_is_installed(prefix, 'flask-0.10.1')
             assert not package_is_installed(prefix, 'flask-0.9')
+
+    def test_create_advanced_pip(self):
+        with make_temp_envs_dir() as envs_dir:
+            env_name = str(uuid4())[:8]
+            prefix = join(envs_dir, env_name)
+            python_path = join(prefix, PYTHON_BINARY)
+
+            run_command(Commands.CREATE, envs_dir, env_name,
+                        utils.support_file('advanced-pip/environment.yml'))
+            assert exists(python_path)
+            assert_package_is_installed(prefix, 'argh', exact=False, pip=True)
+            assert_package_is_installed(prefix, 'module-to-install-in-editable-mode', exact=False, pip=True)
+            assert_package_is_installed(prefix, 'six', exact=False, pip=True)
+            assert_package_is_installed(prefix, 'xmltodict-0.10.2-<pip>', exact=True, pip=True)