diff --git a/poetry/factory.py b/poetry/factory.py
index 90c9cec3295..aab9489b364 100644
--- a/poetry/factory.py
+++ b/poetry/factory.py
@@ -185,7 +185,7 @@ def create_poetry(
         # Always put PyPI last to prefer private repositories
         # but only if we have no other default source
         if not poetry.pool.has_default():
-            poetry.pool.add_repository(PyPiRepository(), True)
+            poetry.pool.add_repository(PyPiRepository(), default=False)
         else:
             if io.is_debug():
                 io.write_line("Deactivating the PyPI repository")
diff --git a/tests/fixtures/with_custom_source/README.rst b/tests/fixtures/with_custom_source/README.rst
new file mode 100644
index 00000000000..f7fe15470f9
--- /dev/null
+++ b/tests/fixtures/with_custom_source/README.rst
@@ -0,0 +1,2 @@
+My Package
+==========
diff --git a/tests/fixtures/with_custom_source/pyproject.toml b/tests/fixtures/with_custom_source/pyproject.toml
new file mode 100644
index 00000000000..d4d127de7e1
--- /dev/null
+++ b/tests/fixtures/with_custom_source/pyproject.toml
@@ -0,0 +1,60 @@
+[tool.poetry]
+name = "my-package"
+version = "1.2.3"
+description = "Some description."
+authors = [
+    "Sébastien Eustace <sebastien@eustace.io>"
+]
+license = "MIT"
+
+readme = "README.rst"
+
+homepage = "https://python-poetry.org"
+repository = "https://github.com/python-poetry/poetry"
+documentation = "https://python-poetry.org/docs"
+
+keywords = ["packaging", "dependency", "poetry"]
+
+classifiers = [
+    "Topic :: Software Development :: Build Tools",
+    "Topic :: Software Development :: Libraries :: Python Modules"
+]
+
+# Requirements
+[tool.poetry.dependencies]
+python = "~2.7 || ^3.6"
+cleo = "^0.6"
+pendulum = { git = "https://github.com/sdispater/pendulum.git", branch = "2.0" }
+requests = { version = "^2.18", optional = true, extras=[ "security" ] }
+pathlib2 = { version = "^2.2", python = "~2.7" }
+
+orator = { version = "^0.9", optional = true }
+
+# File dependency
+demo = { path = "../distributions/demo-0.1.0-py2.py3-none-any.whl" }
+
+# Dir dependency with setup.py
+my-package = { path = "../project_with_setup/" }
+
+# Dir dependency with pyproject.toml
+simple-project = { path = "../simple_project/" }
+
+
+[tool.poetry.extras]
+db = [ "orator" ]
+
+[tool.poetry.dev-dependencies]
+pytest = "~3.4"
+
+
+[tool.poetry.scripts]
+my-script = "my_package:main"
+
+
+[tool.poetry.plugins."blogtool.parsers"]
+".rst" = "some_module::SomeClass"
+
+
+[[tool.poetry.source]]
+name = "foo"
+url = "https://foo.bar/simple/"
diff --git a/tests/test_factory.py b/tests/test_factory.py
index bf3493ae5fa..a334ef9b9ef 100644
--- a/tests/test_factory.py
+++ b/tests/test_factory.py
@@ -155,6 +155,14 @@ def test_poetry_with_two_default_sources():
     assert "Only one repository can be the default" == str(e.value)
 
 
+def test_poetry_with_custom_source():
+    poetry = Factory().create_poetry(fixtures_dir / "with_custom_source")
+
+    assert ["foo", "PyPI"] == [
+        repository.name for repository in poetry.pool.repositories
+    ]
+
+
 def test_validate():
     complete = TomlFile(fixtures_dir / "complete.toml")
     content = complete.read()["tool"]["poetry"]