diff --git a/ipaserver/install/installutils.py b/ipaserver/install/installutils.py
index 5dab043ee..c2b7ae512 100644
--- a/ipaserver/install/installutils.py
+++ b/ipaserver/install/installutils.py
@@ -491,7 +491,7 @@ def get_server_ip_address(host_name, fstore, unattended, setup_dns, ip_addresses
         hosts_record = record_in_hosts(str(ip_address))
 
         if hosts_record is None:
-            if ip_add_to_hosts:
+            if ip_add_to_hosts or setup_dns:
                 print "Adding ["+str(ip_address)+" "+host_name+"] to your /etc/hosts file"
                 fstore.backup_file(paths.HOSTS)
                 add_record_to_hosts(str(ip_address), host_name)