diff --git a/repo2docker/buildpacks/conda/activate-conda.sh b/repo2docker/buildpacks/conda/activate-conda.sh
index 56c4354b..2af21a11 100755
--- a/repo2docker/buildpacks/conda/activate-conda.sh
+++ b/repo2docker/buildpacks/conda/activate-conda.sh
@@ -3,9 +3,16 @@ CONDA_PROFILE="${CONDA_DIR}/etc/profile.d/conda.sh"
 test -f $CONDA_PROFILE && . $CONDA_PROFILE
 if [[ "${KERNEL_PYTHON_PREFIX}" != "${NB_PYTHON_PREFIX}" ]]; then
     # if the kernel is a separate env, stack them
-    # so both are on PATH
+    # so both are on PATH, notebook first
     conda activate ${KERNEL_PYTHON_PREFIX}
     conda activate --stack ${NB_PYTHON_PREFIX}
+
+    # even though it's second on $PATH
+    # make sure CONDA_DEFAULT_ENV is the *kernel* env
+    # so that `!conda install PKG` installs in the kernel env
+    # where user packages are installed, not the notebook env
+    # which only contains UI when the two are different
+    export CONDA_DEFAULT_ENV="${KERNEL_PYTHON_PREFIX}"
 else
     conda activate ${NB_PYTHON_PREFIX}
 fi