diff --git a/dvc/stage.py b/dvc/stage.py
index 30098c977..8aeff60a5 100644
--- a/dvc/stage.py
+++ b/dvc/stage.py
@@ -284,10 +284,17 @@ class Output(Dependency):
                 md5 = file_md5(path)[0]
                 cache = self.project.cache.get(md5)
                 cache_info = os.path.join(self.cache, relpath)
+                cache_dir = os.path.dirname(cache_info)
 
-                self.hardlink(path, cache)
+                if os.path.exists(cache):
+                    self._remove(path, None)
+                    self.hardlink(cache, path)
+                else:
+                    self.hardlink(path, cache)
+
+                if not os.path.exists(cache_dir):
+                    os.makedirs(cache_dir)
 
-                os.makedirs(os.path.dirname(cache_info))
                 with open(cache_info, 'w') as fd:
                     yaml.safe_dump({self.PARAM_MD5: md5}, fd, default_flow_style=False)
 
diff --git a/test-requirements.txt b/test-requirements.txt
index a719f4228..5e847837e 100644
--- a/test-requirements.txt
+++ b/test-requirements.txt
@@ -2,3 +2,4 @@ coverage==4.3.1
 codeclimate-test-reporter==0.2.3
 xmltodict==0.11.0
 awscli==1.14.18
+pywin32; sys_platform == 'nt'
diff --git a/tests/test_add.py b/tests/test_add.py
index 0f823bbfd..9b5b1e0a8 100644
--- a/tests/test_add.py
+++ b/tests/test_add.py
@@ -1,4 +1,5 @@
 import os
+import stat
 import shutil
 import filecmp
 from checksumdir import dirhash
@@ -59,6 +60,25 @@ class TestAddTrackedFile(TestDvc):
             self.dvc.add(fname)
 
 
+class TestAddDirWithExistingCache(TestDvc):
+    def test(self):
+        dname = 'a'
+        fname = os.path.join(dname, 'b')
+        os.mkdir(dname)
+        shutil.copyfile(self.FOO, fname)
+
+        self.dvc.add(self.FOO)
+        self.dvc.add(dname)
+
+
+class TestAddModifiedDir(TestDvc):
+    def test(self):
+        self.dvc.add(self.DATA_DIR)
+        os.chmod(self.DATA, stat.S_IWRITE)
+        os.unlink(self.DATA)
+        self.dvc.add(self.DATA_DIR)
+
+
 class TestCmdAdd(TestDvc):
     def test(self):
         ret = main(['add',