diff --git a/src/apps.js b/src/apps.js
index e3fb1efe8..553de4531 100644
--- a/src/apps.js
+++ b/src/apps.js
@@ -1486,6 +1486,11 @@ async function install(data, auditSource) {
     const appId = crypto.randomUUID();
     debug(`Installing app ${appId}`);
 
+    // if we have a sourceArchive rename it to appId to be picked up later in the apptask
+    if (data.sourceArchiveFilePath) {
+        if (!safe.fs.renameSync(data.sourceArchiveFilePath, `/tmp/${appId}.tar.gz`)) throw new BoxError(BoxError.FS_ERROR, 'Error moving source archive');
+    }
+
     const app = {
         accessRestriction,
         operators,
diff --git a/src/apptask.js b/src/apptask.js
index a7fe7d37f..12f8128ff 100644
--- a/src/apptask.js
+++ b/src/apptask.js
@@ -25,6 +25,7 @@ const apps = require('./apps.js'),
     docker = require('./docker.js'),
     ejs = require('ejs'),
     fs = require('node:fs'),
+    fsPromises = require('node:fs').promises,
     iputils = require('./iputils.js'),
     manifestFormat = require('@cloudron/manifest-format'),
     os = require('node:os'),
@@ -226,11 +227,35 @@ async function downloadImage(manifest) {
 
     if (diskUsage.available < (1024*1024*1024)) throw new BoxError(BoxError.DOCKER_ERROR, `Not enough disk space to pull docker image. available: ${diskUsage.available}`);
 
-    if (manifest.dockerImage.indexOf('local/') === 0) {
-        await docker.buildImage(manifest);
-    } else {
-        await docker.downloadImage(manifest);
+    await docker.downloadImage(manifest);
+}
+
+async function buildLocalImage(app) {
+    assert.strictEqual(typeof app, 'object');
+
+    // TODO some precondition checks like downloadImage maybe
+
+    const sourceFilePath = path.join(paths.APPS_DATA_DIR, app.id, 'source.tar.gz');
+
+    // if we have a newly uploaded source archive, use that
+    const uploadedSourceArchiveFilePath = `/tmp/${app.id}.tar.gz`;
+    if (fs.existsSync(uploadedSourceArchiveFilePath)) {
+        const [renameError] = await safe(fsPromises.rename(uploadedSourceArchiveFilePath, sourceFilePath));
+        if (renameError) {
+            if (renameError.code === 'EXDEV') {
+                // Cross-device rename not permitted, so copy and remove
+                let [error] = await safe(fsPromises.copyFile(uploadedSourceArchiveFilePath, sourceFilePath));
+                if (error) throw new BoxError(BoxError.FS_ERROR, error);
+
+                [error] = await safe(fsPromises.unlink(uploadedSourceArchiveFilePath));
+                if (error) throw new BoxError(BoxError.FS_ERROR, error);
+            } else {
+                throw new BoxError(BoxError.FS_ERROR, renameError);
+            }
+        }
     }
+
+    await docker.buildImage(app.manifest.dockerImage, sourceFilePath);
 }
 
 async function updateChecklist(app, newChecks, acknowledged = false) {
@@ -321,8 +346,11 @@ async function installCommand(app, args, progressCallback) {
         await dns.registerLocations([ { subdomain: app.subdomain, domain: app.domain }].concat(app.secondaryDomains).concat(app.redirectDomains).concat(app.aliasDomains), { overwriteDns }, progressCallback);
     }
 
-    await progressCallback({ percent: 40, message: 'Downloading image' });
-    await downloadImage(app.manifest);
+    // only download non-local images, local ones are built after restore
+    if (app.manifest.dockerImage.indexOf('local/') !== 0) {
+        await progressCallback({ percent: 40, message: 'Downloading image' });
+        await downloadImage(app.manifest);
+    }
 
     await progressCallback({ percent: 50, message: 'Creating app data directory' });
     await createAppDir(app);
@@ -360,6 +388,12 @@ async function installCommand(app, args, progressCallback) {
         await services.restoreAddons(app, app.manifest.addons);
     }
 
+    // now we have the local package tarball, so lets build
+    if (app.manifest.dockerImage.indexOf('local/') === 0) {
+        await progressCallback({ percent: 75, message: 'Building image' });
+        await buildLocalImage(app);
+    }
+
     await progressCallback({ percent: 80, message: 'Creating container' });
     await createContainer(app);
 
diff --git a/src/docker.js b/src/docker.js
index 0fe7bdbf9..e5240bd88 100644
--- a/src/docker.js
+++ b/src/docker.js
@@ -160,16 +160,15 @@ async function pullImage(imageRef) {
     });
 }
 
-async function buildImage(manifest) {
-    assert.strictEqual(typeof manifest, 'object');
+async function buildImage(dockerImage, sourceArchiveFilePath) {
+    assert.strictEqual(typeof dockerImage, 'string');
+    assert.strictEqual(typeof sourceArchiveFilePath, 'string');
 
-    const sourceArchivePath = '/tmp/' + manifest.dockerImage.slice('local/'.length);
+    debug(`buildImage: building ${dockerImage} from ${sourceArchiveFilePath}`);
 
-    debug(`buildImage: building ${manifest.dockerImage} from ${sourceArchivePath}`);
-
-    const tarStream = fs.createReadStream(sourceArchivePath);
-    const [error, stream] = await safe(gConnection.buildImage(tarStream, { t: manifest.dockerImage }));
-    if (error) throw new BoxError(BoxError.DOCKER_ERROR, `Unable to build image from ${sourceArchivePath}: ${error.message}`);
+    const tarStream = fs.createReadStream(sourceArchiveFilePath);
+    const [error, stream] = await safe(gConnection.buildImage(tarStream, { t: dockerImage }));
+    if (error) throw new BoxError(BoxError.DOCKER_ERROR, `Unable to build image from ${sourceArchiveFilePath}: ${error.message}`);
 
     return new Promise((resolve, reject) => {
         let buildError = null;
@@ -190,14 +189,14 @@ async function buildImage(manifest) {
                 debug(`buildImage: error ${buildError}`);
                 return reject(new BoxError(buildError.message.includes('no space') ? BoxError.FS_ERROR : BoxError.DOCKER_ERROR, buildError.message));
             } else {
-                debug(`buildImage: success ${manifest.dockerImage}`);
+                debug(`buildImage: success ${dockerImage}`);
             }
 
             resolve();
         });
 
         stream.on('error', (error) => {
-            debug(`buildImage: error building image ${manifest.dockerImage}: %o`, error);
+            debug(`buildImage: error building image ${dockerImage}: %o`, error);
             reject(new BoxError(BoxError.DOCKER_ERROR, error.message));
         });
     });
diff --git a/src/routes/apps.js b/src/routes/apps.js
index 821c13fe5..b20c35304 100644
--- a/src/routes/apps.js
+++ b/src/routes/apps.js
@@ -205,12 +205,11 @@ async function install(req, res, next) {
 
     data.appStoreId = result.appStoreId;
     data.manifest = result.manifest;
+    data.sourceArchiveFilePath = req.files.sourceArchive?.path || null;
 
     // if we have a source archive upload, craft a custom docker image URI for later
-    if (req.files.sourceArchive?.path) {
-        const newFileName = `${data.manifest.id}:${data.manifest.version}-${Date.now()}`;
-        if (!safe.fs.renameSync(req.files.sourceArchive?.path, `/tmp/${newFileName}`)) return next(new HttpError(500, 'unable to move source archive'));
-        data.manifest.dockerImage = `local/${newFileName}`;
+    if (data.sourceArchiveFilePath) {
+        data.manifest.dockerImage = `local/${data.manifest.id}:${data.manifest.version}-${Date.now()}`;
     }
 
     [error, result] = await safe(apps.install(data, AuditSource.fromRequest(req)));