diff --git a/cmd/helm/install.go b/cmd/helm/install.go
index ec651140c..c1530db0f 100644
--- a/cmd/helm/install.go
+++ b/cmd/helm/install.go
@@ -207,6 +207,7 @@ func addInstallFlags(cmd *cobra.Command, f *pflag.FlagSet, client *action.Instal
 	f.BoolVar(&client.EnableDNS, "enable-dns", false, "enable DNS lookups when rendering templates")
 	f.BoolVar(&client.HideNotes, "hide-notes", false, "if set, do not show notes in install output. Does not affect presence in chart metadata")
 	f.BoolVar(&client.TakeOwnership, "take-ownership", false, "if set, install will ignore the check for helm annotations and take ownership of the existing resources")
+	f.BoolVar(&client.ThreeWayMergeForCustomResources, "three-way-merge-for-custom-resources", false, "also considers the state of custom resources and custom resource definitions in the cluster when adopting resources")
 	addValueOptionsFlags(f, valueOpts)
 	addChartPathOptionsFlags(f, &client.ChartPathOptions)
 
diff --git a/cmd/helm/rollback.go b/cmd/helm/rollback.go
index a65f30a1f..507fc9328 100644
--- a/cmd/helm/rollback.go
+++ b/cmd/helm/rollback.go
@@ -85,6 +85,7 @@ func newRollbackCmd(cfg *action.Configuration, out io.Writer) *cobra.Command {
 	f.BoolVar(&client.WaitForJobs, "wait-for-jobs", false, "if set and --wait enabled, will wait until all Jobs have been completed before marking the release as successful. It will wait for as long as --timeout")
 	f.BoolVar(&client.CleanupOnFail, "cleanup-on-fail", false, "allow deletion of new resources created in this rollback when rollback fails")
 	f.IntVar(&client.MaxHistory, "history-max", settings.MaxHistory, "limit the maximum number of revisions saved per release. Use 0 for no limit")
+	f.BoolVar(&client.ThreeWayMergeForCustomResources, "three-way-merge-for-custom-resources", false, "also considers the state of custom resources and custom resource definitions in the cluster when upgrading (or adopting) resources")
 
 	return cmd
 }
diff --git a/cmd/helm/root.go b/cmd/helm/root.go
index 45879b839..e2656ae90 100644
--- a/cmd/helm/root.go
+++ b/cmd/helm/root.go
@@ -161,8 +161,6 @@ func newRootCmd(actionConfig *action.Configuration, out io.Writer, args []string
 	}
 	actionConfig.RegistryClient = registryClient
 
-	actionConfig.ThreeWayMergeForUnstructured = settings.ThreeWayMergeForUnstructured
-
 	// Add subcommands
 	cmd.AddCommand(
 		// chart commands
diff --git a/cmd/helm/upgrade.go b/cmd/helm/upgrade.go
index 7b4267894..41625274d 100644
--- a/cmd/helm/upgrade.go
+++ b/cmd/helm/upgrade.go
@@ -291,6 +291,7 @@ func newUpgradeCmd(cfg *action.Configuration, out io.Writer) *cobra.Command {
 	f.BoolVar(&client.DependencyUpdate, "dependency-update", false, "update dependencies if they are missing before installing the chart")
 	f.BoolVar(&client.EnableDNS, "enable-dns", false, "enable DNS lookups when rendering templates")
 	f.BoolVar(&client.TakeOwnership, "take-ownership", false, "if set, upgrade will ignore the check for helm annotations and take ownership of the existing resources")
+	f.BoolVar(&client.ThreeWayMergeForCustomResources, "three-way-merge-for-custom-resources", false, "also considers the state of custom resources in the cluster when upgrading (or adopting) resources")
 	addChartPathOptionsFlags(f, &client.ChartPathOptions)
 	addValueOptionsFlags(f, valueOpts)
 	bindOutputFlag(cmd, &outfmt)
diff --git a/pkg/action/action.go b/pkg/action/action.go
index 638f96d30..8418a4c27 100644
--- a/pkg/action/action.go
+++ b/pkg/action/action.go
@@ -94,11 +94,6 @@ type Configuration struct {
 	// Capabilities describes the capabilities of the Kubernetes cluster.
 	Capabilities *chartutil.Capabilities
 
-	// ThreeWayMergeForUnstructured controls whether to use three way merge
-	// patch for unstructured objects (custom resource, custom definitions,
-	// etc).
-	ThreeWayMergeForUnstructured bool
-
 	Log func(string, ...interface{})
 }
 
@@ -378,7 +373,6 @@ func (cfg *Configuration) recordRelease(r *release.Release) {
 func (cfg *Configuration) Init(getter genericclioptions.RESTClientGetter, namespace, helmDriver string, log DebugLog) error {
 	kc := kube.New(getter)
 	kc.Log = log
-	kc.ThreeWayMergeForUnstructured = cfg.ThreeWayMergeForUnstructured
 
 	lazyClient := &lazyClient{
 		namespace: namespace,
diff --git a/pkg/action/install.go b/pkg/action/install.go
index 490e18963..e1c957ca7 100644
--- a/pkg/action/install.go
+++ b/pkg/action/install.go
@@ -112,7 +112,9 @@ type Install struct {
 	UseReleaseName bool
 	// TakeOwnership will ignore the check for helm annotations and take ownership of the resources.
 	TakeOwnership bool
-	PostRenderer  postrender.PostRenderer
+	// Also considers the state of custom resources and custom resource definitions in the cluster when adopting resources.
+	ThreeWayMergeForCustomResources bool
+	PostRenderer                    postrender.PostRenderer
 	// Lock to control raceconditions when the process receives a SIGTERM
 	Lock sync.Mutex
 }
@@ -455,7 +457,7 @@ func (i *Install) performInstall(rel *release.Release, toBeAdopted kube.Resource
 	if len(toBeAdopted) == 0 && len(resources) > 0 {
 		_, err = i.cfg.KubeClient.Create(resources)
 	} else if len(resources) > 0 {
-		_, err = i.cfg.KubeClient.Update(toBeAdopted, resources, i.Force)
+		_, err = i.cfg.KubeClient.Update(toBeAdopted, resources, i.Force, i.ThreeWayMergeForCustomResources)
 	}
 	if err != nil {
 		return rel, err
diff --git a/pkg/action/rollback.go b/pkg/action/rollback.go
index 12dee35ce..a7d6944f7 100644
--- a/pkg/action/rollback.go
+++ b/pkg/action/rollback.go
@@ -45,6 +45,8 @@ type Rollback struct {
 	Force         bool // will (if true) force resource upgrade through uninstall/recreate if needed
 	CleanupOnFail bool
 	MaxHistory    int // MaxHistory limits the maximum number of revisions saved per release
+	// Also considers the state of custom resources and custom resource definitions in the cluster when upgrading (or adopting) resources.
+	ThreeWayMergeForCustomResources bool
 }
 
 // NewRollback creates a new Rollback object with the given configuration.
@@ -188,7 +190,7 @@ func (r *Rollback) performRollback(currentRelease, targetRelease *release.Releas
 	if err != nil {
 		return targetRelease, errors.Wrap(err, "unable to set metadata visitor from target release")
 	}
-	results, err := r.cfg.KubeClient.Update(current, target, r.Force)
+	results, err := r.cfg.KubeClient.Update(current, target, r.Force, r.ThreeWayMergeForCustomResources)
 
 	if err != nil {
 		msg := fmt.Sprintf("Rollback %q failed: %s", targetRelease.Name, err)
diff --git a/pkg/action/upgrade.go b/pkg/action/upgrade.go
index f93bf29b1..a50c007de 100644
--- a/pkg/action/upgrade.go
+++ b/pkg/action/upgrade.go
@@ -119,6 +119,8 @@ type Upgrade struct {
 	EnableDNS bool
 	// TakeOwnership will skip the check for helm annotations and adopt all existing resources.
 	TakeOwnership bool
+	// Also considers the state of custom resources and custom resource definitions in the cluster when upgrading (or adopting) resources.
+	ThreeWayMergeForCustomResources bool
 }
 
 type resultMessage struct {
@@ -426,7 +428,7 @@ func (u *Upgrade) releasingUpgrade(c chan<- resultMessage, upgradedRelease *rele
 		u.cfg.Log("upgrade hooks disabled for %s", upgradedRelease.Name)
 	}
 
-	results, err := u.cfg.KubeClient.Update(current, target, u.Force)
+	results, err := u.cfg.KubeClient.Update(current, target, u.Force, u.ThreeWayMergeForCustomResources)
 	if err != nil {
 		u.cfg.recordRelease(originalRelease)
 		u.reportToPerformUpgrade(c, upgradedRelease, results.Created, err)
diff --git a/pkg/cli/environment.go b/pkg/cli/environment.go
index ef0e8d53d..3f2dc00b2 100644
--- a/pkg/cli/environment.go
+++ b/pkg/cli/environment.go
@@ -89,10 +89,6 @@ type EnvSettings struct {
 	BurstLimit int
 	// QPS is queries per second which may be used to avoid throttling.
 	QPS float32
-	// ThreeWayMergeForUnstructured controls whether to use three way merge
-	// patch for unstructured objects (custom resource, custom definitions,
-	// etc).
-	ThreeWayMergeForUnstructured bool
 }
 
 func New() *EnvSettings {
@@ -115,7 +111,6 @@ func New() *EnvSettings {
 		QPS:                       envFloat32Or("HELM_QPS", defaultQPS),
 	}
 	env.Debug, _ = strconv.ParseBool(os.Getenv("HELM_DEBUG"))
-	env.ThreeWayMergeForUnstructured, _ = strconv.ParseBool(os.Getenv("HELM_THREE_WAY_MERGE_FOR_UNSTRUCTURED"))
 
 	// bind to kubernetes config flags
 	config := &genericclioptions.ConfigFlags{
@@ -165,7 +160,6 @@ func (s *EnvSettings) AddFlags(fs *pflag.FlagSet) {
 	fs.StringVar(&s.RepositoryCache, "repository-cache", s.RepositoryCache, "path to the directory containing cached repository indexes")
 	fs.IntVar(&s.BurstLimit, "burst-limit", s.BurstLimit, "client-side default throttling limit")
 	fs.Float32Var(&s.QPS, "qps", s.QPS, "queries per second used when communicating with the Kubernetes API, not including bursting")
-	fs.BoolVar(&s.ThreeWayMergeForUnstructured, "three-way-merge-for-unstructured", s.ThreeWayMergeForUnstructured, "use a three way merge patch for unstructured objects (custom resources, custom resource definitions, etc.)")
 }
 
 func envOr(name, def string) string {
diff --git a/pkg/kube/client.go b/pkg/kube/client.go
index 178473289..12dea58c8 100644
--- a/pkg/kube/client.go
+++ b/pkg/kube/client.go
@@ -85,11 +85,6 @@ type Client struct {
 	// Namespace allows to bypass the kubeconfig file for the choice of the namespace
 	Namespace string
 
-	// ThreeWayMergeForUnstructured controls whether to use three way merge
-	// patch for unstructured objects (custom resource, custom definitions,
-	// etc).
-	ThreeWayMergeForUnstructured bool
-
 	kubeClient *kubernetes.Clientset
 }
 
@@ -393,7 +388,7 @@ func (c *Client) BuildTable(reader io.Reader, validate bool) (ResourceList, erro
 // occurs, a Result will still be returned with the error, containing all
 // resource updates, creations, and deletions that were attempted. These can be
 // used for cleanup or other logging purposes.
-func (c *Client) Update(original, target ResourceList, force bool) (*Result, error) {
+func (c *Client) Update(original, target ResourceList, force bool, threeWayMergeForCRs bool) (*Result, error) {
 	updateErrors := []string{}
 	res := &Result{}
 
@@ -428,7 +423,7 @@ func (c *Client) Update(original, target ResourceList, force bool) (*Result, err
 			return errors.Errorf("no %s with the name %q found", kind, info.Name)
 		}
 
-		if err := updateResource(c, info, originalInfo.Object, force); err != nil {
+		if err := updateResource(c, info, originalInfo.Object, force, threeWayMergeForCRs); err != nil {
 			c.Log("error updating the resource %q:\n\t %v", info.Name, err)
 			updateErrors = append(updateErrors, err.Error())
 		}
@@ -624,7 +619,7 @@ func deleteResource(info *resource.Info, policy metav1.DeletionPropagation) erro
 		})
 }
 
-func createPatch(target *resource.Info, current runtime.Object, threeWayMergeForUnstructured bool) ([]byte, types.PatchType, error) {
+func createPatch(target *resource.Info, current runtime.Object, threeWayMergeForCRs bool) ([]byte, types.PatchType, error) {
 	oldData, err := json.Marshal(current)
 	if err != nil {
 		return nil, types.StrategicMergePatchType, errors.Wrap(err, "serializing current configuration")
@@ -660,7 +655,7 @@ func createPatch(target *resource.Info, current runtime.Object, threeWayMergeFor
 	_, isCRD := versionedObject.(*apiextv1beta1.CustomResourceDefinition)
 
 	if isUnstructured || isCRD {
-		if threeWayMergeForUnstructured {
+		if threeWayMergeForCRs {
 			// from https://github.com/kubernetes/kubectl/blob/b83b2ec7d15f286720bccf7872b5c72372cb8e80/pkg/cmd/apply/patcher.go#L129
 			preconditions := []mergepatch.PreconditionFunc{
 				mergepatch.RequireKeyUnchanged("apiVersion"),
@@ -687,7 +682,7 @@ func createPatch(target *resource.Info, current runtime.Object, threeWayMergeFor
 	return patch, types.StrategicMergePatchType, err
 }
 
-func updateResource(c *Client, target *resource.Info, currentObj runtime.Object, force bool) error {
+func updateResource(c *Client, target *resource.Info, currentObj runtime.Object, force bool, threeWayMergeForCRs bool) error {
 	var (
 		obj    runtime.Object
 		helper = resource.NewHelper(target.Client, target.Mapping).WithFieldManager(getManagedFieldsManager())
@@ -703,7 +698,7 @@ func updateResource(c *Client, target *resource.Info, currentObj runtime.Object,
 		}
 		c.Log("Replaced %q with kind %s for kind %s", target.Name, currentObj.GetObjectKind().GroupVersionKind().Kind, kind)
 	} else {
-		patch, patchType, err := createPatch(target, currentObj, c.ThreeWayMergeForUnstructured)
+		patch, patchType, err := createPatch(target, currentObj, threeWayMergeForCRs)
 		if err != nil {
 			return errors.Wrap(err, "failed to create patch")
 		}
diff --git a/pkg/kube/client_test.go b/pkg/kube/client_test.go
index fb851947a..94a78f77e 100644
--- a/pkg/kube/client_test.go
+++ b/pkg/kube/client_test.go
@@ -282,7 +282,7 @@ func TestUpdate(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	result, err := c.Update(first, second, false)
+	result, err := c.Update(first, second, false, false)
 	if err != nil {
 		t.Fatal(err)
 	}
diff --git a/pkg/kube/fake/fake.go b/pkg/kube/fake/fake.go
index a60d9f34e..5808ff9b9 100644
--- a/pkg/kube/fake/fake.go
+++ b/pkg/kube/fake/fake.go
@@ -107,11 +107,11 @@ func (f *FailingKubeClient) WatchUntilReady(resources kube.ResourceList, d time.
 }
 
 // Update returns the configured error if set or prints
-func (f *FailingKubeClient) Update(r, modified kube.ResourceList, ignoreMe bool) (*kube.Result, error) {
+func (f *FailingKubeClient) Update(r, modified kube.ResourceList, ignoreMe bool, threeWayMergeForCRs bool) (*kube.Result, error) {
 	if f.UpdateError != nil {
 		return &kube.Result{}, f.UpdateError
 	}
-	return f.PrintingKubeClient.Update(r, modified, ignoreMe)
+	return f.PrintingKubeClient.Update(r, modified, ignoreMe, threeWayMergeForCRs)
 }
 
 // Build returns the configured error if set or prints
diff --git a/pkg/kube/fake/printer.go b/pkg/kube/fake/printer.go
index b38e8c084..01f0ab616 100644
--- a/pkg/kube/fake/printer.go
+++ b/pkg/kube/fake/printer.go
@@ -90,7 +90,7 @@ func (p *PrintingKubeClient) WatchUntilReady(resources kube.ResourceList, _ time
 }
 
 // Update implements KubeClient Update.
-func (p *PrintingKubeClient) Update(_, modified kube.ResourceList, _ bool) (*kube.Result, error) {
+func (p *PrintingKubeClient) Update(_, modified kube.ResourceList, _ bool, _ bool) (*kube.Result, error) {
 	_, err := io.Copy(p.Out, bufferize(modified))
 	if err != nil {
 		return nil, err
diff --git a/pkg/kube/interface.go b/pkg/kube/interface.go
index ce42ed950..25e3bdc3f 100644
--- a/pkg/kube/interface.go
+++ b/pkg/kube/interface.go
@@ -54,7 +54,7 @@ type Interface interface {
 
 	// Update updates one or more resources or creates the resource
 	// if it doesn't exist.
-	Update(original, target ResourceList, force bool) (*Result, error)
+	Update(original, target ResourceList, force bool, threeWayMergeForCRs bool) (*Result, error)
 
 	// Build creates a resource list from a Reader.
 	//