diff --git a/tools/install-powershell.ps1 b/tools/install-powershell.ps1
index 12200ccb9e..1b5248b467 100644
--- a/tools/install-powershell.ps1
+++ b/tools/install-powershell.ps1
@@ -19,7 +19,6 @@
 [CmdletBinding()]
 param(
     [Parameter()]
-    [ValidateNotNullOrEmpty()]
     [string] $Destination,
 
     [Parameter()]
@@ -50,17 +49,34 @@ if (-not $Destination) {
         $Destination = "${Destination}-daily"
     }
 }
-
-if (Test-Path -Path $Destination) {
-    if ($DoNotOverwrite) {
-        throw "Destination folder '$Destination' already exist. Use a different path or omit '-DoNotOverwrite' to overwrite."
-    }
-    Remove-Item -Path $Destination -Recurse -Force
-}
-New-Item -ItemType Directory -Path $Destination -Force > $null
-$Destination = Resolve-Path -Path $Destination | ForEach-Object -MemberName Path
+$Destination = $PSCmdlet.SessionState.Path.GetUnresolvedProviderPathFromPSPath($Destination)
 Write-Verbose "Destination: $Destination" -Verbose
 
+Function Remove-Destination([string] $Destination) {
+    if (Test-Path -Path $Destination) {
+        if ($DoNotOverwrite) {
+            throw "Destination folder '$Destination' already exist. Use a different path or omit '-DoNotOverwrite' to overwrite."
+        }
+        Write-Verbose "Removing old installation: $Destination" -Verbose
+        if (Test-Path -Path "$Destination.old") {
+            Remove-Item "$Destination.old" -Recurse -Force
+        }
+        if ($IsWinEnv -and ($Destination -eq $PSHome)) {
+            # handle the case where the updated folder is currently in use
+            Get-ChildItem -Recurse -File -Path $PSHome | ForEach-Object {
+                if ($_.extension -eq "old") {
+                    Remove-Item $_
+                } else {
+                    Move-Item $_.fullname "$($_.fullname).old"
+                }
+            }
+        } else {
+            # Unix systems don't keep open file handles so you can just move files/folders even if in use
+            Move-Item "$Destination" "$Destination.old"
+        }
+    }
+}
+
 $architecture = if (-not $IsWinEnv) {
     "x64"
 } else {
@@ -79,7 +95,7 @@ try {
         }
 
         if ($architecture -ne "x64") {
-            throw "The OS architecture is '$architecture'. However, we currently only support daily package for x64 Windows."
+            throw "The OS architecture is '$architecture'. However, we currently only support daily package for x64."
         }
 
         ## Register source if not yet
@@ -99,10 +115,9 @@ try {
 
         $package = Find-Package -Source powershell-core-daily -AllowPrereleaseVersions -Name $packageName
         Write-Verbose "Daily package found. Name: $packageName; Version: $($package.Version)" -Verbose
-        Install-Package -InputObject $package -Destination $tempDir -ExcludeVersion > $null
 
+        Install-Package -InputObject $package -Destination $tempDir -ExcludeVersion > $null
         $contentPath = [System.IO.Path]::Combine($tempDir, $packageName, "content")
-        Copy-Item -Path $contentPath\* -Destination $Destination -Recurse -Force
     } else {
         $metadata = Invoke-RestMethod https://api.github.com/repos/powershell/powershell/releases/latest
         $release = $metadata.tag_name -replace '^v'
@@ -120,16 +135,29 @@ try {
 
         $packagePath = Join-Path -Path $tempDir -ChildPath $packageName
         Invoke-WebRequest -Uri $downloadURL -OutFile $packagePath
+        $contentPath = Join-Path -Path $tempDir -ChildPath "new"
 
+        New-Item -ItemType Directory -Path $contentPath > $null
         if ($IsWinEnv) {
-            Expand-Archive -Path $packagePath -DestinationPath $Destination
+            Expand-Archive -Path $packagePath -DestinationPath $contentPath
         } else {
-            tar zxf $packagePath -C $Destination
+            tar zxf $packagePath -C $contentPath
         }
     }
+    Remove-Destination $Destination
+    if (Test-Path $Destination) {
+        Write-Verbose "Copying files" -Verbose
+        # only copy files as folders will already exist at $Destination
+        Get-ChildItem -Recurse -Path "$contentPath" -File | ForEach-Object {
+            $DestinationFilePath = Join-Path $Destination $_.fullname.replace($contentPath,"")
+            Copy-Item $_.fullname -Destination $DestinationFilePath
+        }
+    } else {
+        Move-Item -Path $contentPath -Destination $Destination
+    }
 
     ## Change the mode of 'pwsh' to 'rwxr-xr-x' to allow execution
-    if (-not $IsWinEnv) { chmod 755 "$Destination/pwsh" }
+    if (-not $IsWinEnv) { chmod 755 $Destination/pwsh }
 
     if ($AddToPath) {
         if ($IsWinEnv -and (-not $env:Path.Contains($Destination))) {
@@ -179,6 +207,9 @@ try {
     }
 
     Write-Host "PowerShell Core has been installed at $Destination" -ForegroundColor Green
+    if ($Destination -eq $PSHome) {
+        Write-Host "Please restart pwsh" -ForegroundColor Magenta
+    }
 } finally {
     Remove-Item -Path $tempDir -Recurse -Force -ErrorAction SilentlyContinue
 }