diff --git a/packages/create-react-app/createReactApp.js b/packages/create-react-app/createReactApp.js
index 1bf3bb0649d..f0111aebd63 100755
--- a/packages/create-react-app/createReactApp.js
+++ b/packages/create-react-app/createReactApp.js
@@ -49,6 +49,7 @@ const url = require('url');
 const hyperquest = require('hyperquest');
 const envinfo = require('envinfo');
 const os = require('os');
+const resolveFrom = require('resolve-from');
 const findMonorepo = require('react-dev-utils/workspaceUtils').findMonorepo;
 const packageJson = require('./package.json');
 
@@ -323,15 +324,12 @@ function run(
       );
     })
     .then(packageName => {
-      checkNodeVersion(packageName);
+      checkNodeVersion(root, packageName);
       setCaretRangeForRuntimeDeps(packageName);
 
-      const scriptsPath = path.resolve(
-        process.cwd(),
-        'node_modules',
-        packageName,
-        'scripts',
-        'init.js'
+      const scriptsPath = resolveFrom(
+        root,
+        path.join(packageName, 'scripts', 'init.js')
       );
       const init = require(scriptsPath);
       init(root, appName, verbose, originalDirectory, template);
@@ -511,12 +509,10 @@ function checkNpmVersion() {
   };
 }
 
-function checkNodeVersion(packageName) {
-  const packageJsonPath = path.resolve(
-    process.cwd(),
-    'node_modules',
-    packageName,
-    'package.json'
+function checkNodeVersion(root, packageName) {
+  const packageJsonPath = resolveFrom(
+    root,
+    path.join(packageName, 'package.json')
   );
   const packageJson = require(packageJsonPath);
   if (!packageJson.engines || !packageJson.engines.node) {
diff --git a/packages/create-react-app/package.json b/packages/create-react-app/package.json
index 86bd258f736..cbeb5a2ea25 100644
--- a/packages/create-react-app/package.json
+++ b/packages/create-react-app/package.json
@@ -28,6 +28,7 @@
     "fs-extra": "^5.0.0",
     "hyperquest": "^2.1.2",
     "react-dev-utils": "^5.0.0",
+    "resolve-from": "^4.0.0",
     "semver": "^5.0.3",
     "tar-pack": "^3.4.0",
     "tmp": "0.0.33",
diff --git a/packages/react-scripts/fixtures/monorepos/cra-app/.template.dependencies.json b/packages/react-scripts/fixtures/monorepos/cra-app/.template.dependencies.json
new file mode 100644
index 00000000000..93d99993f2f
--- /dev/null
+++ b/packages/react-scripts/fixtures/monorepos/cra-app/.template.dependencies.json
@@ -0,0 +1,5 @@
+{
+  "dependencies": {
+    "comp2": "^1.0.0"
+  }
+}
diff --git a/packages/react-scripts/fixtures/monorepos/cra-app/gitignore b/packages/react-scripts/fixtures/monorepos/cra-app/gitignore
new file mode 100644
index 00000000000..57078cd1367
--- /dev/null
+++ b/packages/react-scripts/fixtures/monorepos/cra-app/gitignore
@@ -0,0 +1,24 @@
+# See https://help.github.com/ignore-files/ for more about ignoring files.
+
+# generated test output
+testoutput.json
+
+# dependencies
+/node_modules
+
+# testing
+/coverage
+
+# production
+/build
+
+# misc
+.DS_Store
+.env.local
+.env.development.local
+.env.test.local
+.env.production.local
+
+npm-debug.log*
+yarn-debug.log*
+yarn-error.log*
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/public/favicon.ico b/packages/react-scripts/fixtures/monorepos/cra-app/public/favicon.ico
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/public/favicon.ico
rename to packages/react-scripts/fixtures/monorepos/cra-app/public/favicon.ico
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/public/index.html b/packages/react-scripts/fixtures/monorepos/cra-app/public/index.html
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/public/index.html
rename to packages/react-scripts/fixtures/monorepos/cra-app/public/index.html
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/public/manifest.json b/packages/react-scripts/fixtures/monorepos/cra-app/public/manifest.json
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/public/manifest.json
rename to packages/react-scripts/fixtures/monorepos/cra-app/public/manifest.json
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/App.css b/packages/react-scripts/fixtures/monorepos/cra-app/src/App.css
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/App.css
rename to packages/react-scripts/fixtures/monorepos/cra-app/src/App.css
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/App.js b/packages/react-scripts/fixtures/monorepos/cra-app/src/App.js
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/App.js
rename to packages/react-scripts/fixtures/monorepos/cra-app/src/App.js
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/App.test.js b/packages/react-scripts/fixtures/monorepos/cra-app/src/App.test.js
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/App.test.js
rename to packages/react-scripts/fixtures/monorepos/cra-app/src/App.test.js
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/index.css b/packages/react-scripts/fixtures/monorepos/cra-app/src/index.css
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/index.css
rename to packages/react-scripts/fixtures/monorepos/cra-app/src/index.css
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/index.js b/packages/react-scripts/fixtures/monorepos/cra-app/src/index.js
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/index.js
rename to packages/react-scripts/fixtures/monorepos/cra-app/src/index.js
diff --git a/packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/logo.svg b/packages/react-scripts/fixtures/monorepos/cra-app/src/logo.svg
similarity index 100%
rename from packages/react-scripts/fixtures/monorepos/packages/cra-app1/src/logo.svg
rename to packages/react-scripts/fixtures/monorepos/cra-app/src/logo.svg
diff --git a/packages/react-scripts/scripts/init.js b/packages/react-scripts/scripts/init.js
index ac695d167d9..5328ae2880d 100644
--- a/packages/react-scripts/scripts/init.js
+++ b/packages/react-scripts/scripts/init.js
@@ -21,6 +21,9 @@ const execSync = require('child_process').execSync;
 const spawn = require('react-dev-utils/crossSpawn');
 const { defaultBrowsers } = require('react-dev-utils/browsersHelper');
 const os = require('os');
+const resolveFrom = require('resolve-from');
+const paths = require('../config/paths');
+const { findMonorepo } = require('react-dev-utils/workspaceUtils');
 
 function isInGitRepository() {
   try {
@@ -83,9 +86,12 @@ module.exports = function(
 ) {
   const ownPackageName = require(path.join(__dirname, '..', 'package.json'))
     .name;
-  const ownPath = path.join(appPath, 'node_modules', ownPackageName);
+  const ownPath = path.join(
+    resolveFrom(appPath, path.join(ownPackageName, 'package.json')),
+    '..'
+  );
   const appPackage = require(path.join(appPath, 'package.json'));
-  const useYarn = fs.existsSync(path.join(appPath, 'yarn.lock'));
+  const useYarn = paths.useYarn;
 
   // Copy over some of the devDependencies
   appPackage.dependencies = appPackage.dependencies || {};
@@ -172,10 +178,19 @@ module.exports = function(
     fs.unlinkSync(templateDependenciesPath);
   }
 
+  // yarn ws not creating app/node_modules/.bin link to hoisted react-scripts
+  // -- workaround: install react-scripts again to create link
+  // -- bug in yarn 1.3.2, fix verified in nightly 1.4.1-20180211.2236 and 1.5.1
+  // TODO: remove this workaround when CRA enforces min yarn version
+  const rerunYarn = useYarn && findMonorepo(appPath).isAppIncluded;
+  if (rerunYarn) {
+    console.log('Detected app in yarn workspace, running install again');
+  }
+
   // Install react and react-dom for backward compatibility with old CRA cli
   // which doesn't install react and react-dom along with react-scripts
   // or template is presetend (via --internal-testing-template)
-  if (!isReactInstalled(appPackage) || template) {
+  if (!isReactInstalled(appPackage) || template || rerunYarn) {
     console.log(`Installing react and react-dom using ${command}...`);
     console.log();
 
diff --git a/tasks/e2e-monorepos.sh b/tasks/e2e-monorepos.sh
index 635badcf219..480bb016df5 100755
--- a/tasks/e2e-monorepos.sh
+++ b/tasks/e2e-monorepos.sh
@@ -110,25 +110,46 @@ pushd "$temp_app_path"
 cp -r "$root_path/packages/react-scripts/fixtures/monorepos/yarn-ws" .
 cd "yarn-ws"
 cp -r "$root_path/packages/react-scripts/fixtures/monorepos/packages" .
-yarn
 
 # Test cra-app1
-cd packages/cra-app1
+pushd packages/cra-app1
+cp -r "$root_path/packages/react-scripts/fixtures/monorepos/cra-app/"* .
+yarn
+verifyBuild
+yarn start --smoke-test
+verifyTest
+popd
+
+# ******************************************************************************
+# Test clean create-react-app inside workspace
+# ******************************************************************************
+pushd packages
+npx create-react-app newapp
+cd newapp
+yarn build
+yarn start --smoke-test
+CI=true yarn test --watch=no
+popd
+
+# ******************************************************************************
+# Test create-react-app w/ shared comps inside workspace
+# ******************************************************************************
+pushd packages
+npx create-react-app --internal-testing-template="$root_path"/packages/react-scripts/fixtures/monorepos/cra-app cra-app2
+cd cra-app2
 verifyBuild
 yarn start --smoke-test
 verifyTest
 
 # Test eject
+# TODO: veriy tests can be run from other apps after eject
+# -- will currently fail due to picking up ejected scripts/test.js
 echo yes | npm run eject
 verifyBuild
 yarn start --smoke-test
 verifyTest
+popd
 
-# ******************************************************************************
-# Test create-react-app inside workspace
-# ******************************************************************************
-# npx create-react-app --internal-testing-template="$root_path"/packages/react-scripts/fixtures/yarn-ws/ws/cra-app1 cra-app2
-# -- above needs https://github.com/facebookincubator/create-react-app/pull/3435 to user create-react-app
 popd
 
 # Cleanup