diff --git a/meteor/client/lib/virtualbox.js b/meteor/client/lib/virtualbox.js
index 4000289978..6d362492a9 100644
--- a/meteor/client/lib/virtualbox.js
+++ b/meteor/client/lib/virtualbox.js
@@ -1,5 +1,5 @@
 var fs = require('fs');
-var exec = require('exec');
+var child_process = require('child_process');
 var path = require('path');
 
 isVirtualBoxInstalled = function (callback) {
@@ -24,22 +24,15 @@ isResolverSetup = function (callback) {
   });
 };
 
-setupVirtualBoxAndResolver = function (skipVirtualBox, callback) {
+setupResolver = function (callback) {
   var installFile = path.join(getBinDir(), 'install');
   var cocoaSudo = path.join(getBinDir(), 'cocoasudo');
   var execCommand = cocoaSudo + ' --prompt="Kitematic Setup wants to make changes. Type your password to allow this." ' + installFile;
-  console.log(execCommand);
-  var env = {
-    VIRTUALBOX_PKG_PATH: path.join(getBinDir(), 'virtualbox-4.3.12.pkg')
-  };
-  if (!skipVirtualBox) {
-    env.INSTALL_VIRTUALBOX = true;
-  }
-  exec(execCommand, {env: env}, function (err, stdout) {
+  child_process.exec(execCommand, function (error, stdout, stderr) {
     console.log(stdout);
-    if (err) {
-      console.log(err);
-      callback(err);
+    if (error) {
+      console.log(error);
+      callback(error);
       return;
     }
     console.log('Virtualbox Installation & Resolver config complete.');
@@ -47,3 +40,16 @@ setupVirtualBoxAndResolver = function (skipVirtualBox, callback) {
   });
 };
 
+setupVirtualBox = function (callback) {
+  child_process.exec('open -W ' + path.join(getBinDir(), 'virtualbox-4.3.12.pkg'), function (error, stdout, stderr) {
+    console.log(stdout);
+    if (error) {
+      console.log(error);
+      callback(error);
+      return;
+    }
+    console.log('Virtualbox Installation running.');
+    callback();
+  });
+};
+
diff --git a/meteor/client/views/dashboard/setup/setup-install.html b/meteor/client/views/dashboard/setup/setup-install.html
index 62f666f6fa..b179a4f7d2 100644
--- a/meteor/client/views/dashboard/setup/setup-install.html
+++ b/meteor/client/views/dashboard/setup/setup-install.html
@@ -21,10 +21,17 @@
           {{/if}}
           {{#if $eq this.index currentInstallStep}}
             <span class="pull-left">
-              {{> spinner}}
+              {{#if $eq this.index failedStep}}
+                <img src="/step_failed.png">
+              {{else}}
+                {{> spinner}}
+              {{/if}}
             </span>
             <div class="media-body">
               {{this.message}}
+              {{#if $eq this.index failedStep}}
+                <p>{{failedError}}</p>
+              {{/if}}
             </div>
           {{/if}}
         </div>
diff --git a/meteor/client/views/dashboard/setup/setup-install.js b/meteor/client/views/dashboard/setup/setup-install.js
index 5ff517fa80..af562d2b91 100644
--- a/meteor/client/views/dashboard/setup/setup-install.js
+++ b/meteor/client/views/dashboard/setup/setup-install.js
@@ -8,13 +8,18 @@ var async = require('async');
 // - imperativeMessage: Message to show before running
 var steps = [
 
-  // Step 0, set up VirtualBox
+  // Set up VirtualBox
   {
     install: function (callback) {
       isVirtualBoxInstalled(function (err, virtualBoxInstalled) {
-        setupVirtualBoxAndResolver(virtualBoxInstalled, function () {
+        var installedYet = false;
+        if (!virtualBoxInstalled) {
+          setupVirtualBox(function (err) {
+            callback(err);
+          });
+        } else {
           callback();
-        });
+        }
       });
     },
     pastMessage: 'VirtualBox installed',
@@ -22,7 +27,19 @@ var steps = [
     imperativeMessage: 'Install VirtualBox if necessary'
   },
 
-  // Step 1: Set up the VM for running Kitematic apps
+  // Set up the routing.
+  {
+    install: function (callback) {
+      setupResolver(function (err) {
+        callback(err);
+      });
+    },
+    pastMessage: 'Container routing set up (root required).',
+    message: 'Setting up container routing (root required).',
+    imperativeMessage: 'Set up container routing to VM (root required).'
+  },
+
+  // Set up the VM for running Kitematic apps
   {
     install: function (callback) {
       console.log('Checking if vm exists...');
@@ -49,7 +66,7 @@ var steps = [
     imperativeMessage: 'Set up the Kitematic VM'
   },
 
-  // Step 2: Start the Kitematic VM
+  // Start the Kitematic VM
   {
     install: function (callback) {
       startBoot2Docker(function (err) {
@@ -61,7 +78,7 @@ var steps = [
     imperativeMessage: 'Start the Kitematic VM'
   },
 
-  // Step 3: Set up the default Kitematic images
+  // Set up the default Kitematic images
   {
     install: function (callback) {
       Meteor.call('reloadDefaultContainers', function (err) {
@@ -93,8 +110,10 @@ runSetup = function (callback) {
   }, function (err) {
     if (err) {
       // if any of the steps fail
-      console.log('Kitematic setup failed at step' + currentStep);
+      console.log('Kitematic setup failed at step ' + currentStep);
       console.log(err);
+      Session.set('failedStep', currentStep);
+      Session.set('failedError', err);
       callback(err);
     } else {
       // Setup Finished
@@ -121,10 +140,6 @@ Template.setup_install.rendered = function() {
   }
 };
 
-Template.setup_install.events({
-
-});
-
 Template.setup_install.steps = function () {
   return steps.map(function (step, index) {
     step.index = index;
@@ -135,11 +150,15 @@ Template.setup_install.steps = function () {
 Template.setup_install.helpers({
   currentInstallStep: function () {
     return Session.get('currentInstallStep');
+  },
+  installComplete: function () {
+    return Session.get('currentInstallStep') === steps.length;
+  },
+  failedStep: function () {
+    return Session.get('failedStep');
+  },
+  failedError: function () {
+    return Session.get('failedError');
   }
 });
 
-Template.setup_install.helpers({
-  installComplete: function () {
-    return Session.get('currentInstallStep') === steps.length;
-  }
-});
diff --git a/meteor/public/step_failed.png b/meteor/public/step_failed.png
new file mode 100644
index 0000000000..d8b8fb64bb
Binary files /dev/null and b/meteor/public/step_failed.png differ
diff --git a/meteor/public/step_failed@2x.png b/meteor/public/step_failed@2x.png
new file mode 100644
index 0000000000..47ef272a64
Binary files /dev/null and b/meteor/public/step_failed@2x.png differ
diff --git a/resources/install b/resources/install
index ab0ae8eb4f..ad6951aebf 100755
--- a/resources/install
+++ b/resources/install
@@ -3,10 +3,8 @@
 # Lookup the Kitematic VM resolver for .dev domains
 echo "nameserver 172.17.42.1" > /etc/resolver/dev
 
-# Install virtualbox
-if [ -n "$INSTALL_VIRTUALBOX" ]; then
-  /usr/sbin/installer -pkg $VIRTUALBOX_PKG_PATH -target /
-fi
+DIR=$(dirname "$0")
+USER=`w -h | sort -u -t' ' -k1,1 | awk '{print $1}'`
 
 /bin/rm -rf /Library/LaunchAgents/com.kitematic.route.plist
 
@@ -37,9 +35,6 @@ echo '<?xml version="1.0" encoding="UTF-8"?>
 </dict>
 </plist>' > /Library/LaunchAgents/com.kitematic.route.plist
 
-DIR=$(dirname "$0")
-USER=`w -h | sort -u -t' ' -k1,1 | awk '{print $1}'`
-
 sudo -u $USER $DIR/boot2docker init --lowerip=192.168.59.103 --upperip=192.168.59.103
 
 # Add entries to routing table for Kitematic VM