diff --git a/CHANGES.md b/CHANGES.md
index 417075ca..36a6fd9a 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -14,6 +14,9 @@ next
 - Add `dune unstable-fmt` to format `dune` files. The interface and syntax are
   still subject to change, so use with caution. (#1130, fix #940, @emillon)
 
+- Improve error message for `dune utop` without a library name (#1154, fix
+  #1149, @emillon)
+
 1.1.1 (08/08/2018)
 ------------------
 
diff --git a/bin/main.ml b/bin/main.ml
index 24457577..f73e5517 100644
--- a/bin/main.ml
+++ b/bin/main.ml
@@ -1374,12 +1374,15 @@ let utop =
     ] in
   let term =
     let%map common = common
-    and dir = Arg.(value & pos 0 dir "" & Arg.info [] ~docv:"PATH")
+    and dir = Arg.(value & pos 0 string "" & Arg.info [] ~docv:"PATH")
     and ctx_name = context_arg ~doc:{|Select context where to build/run utop.|}
     and args = Arg.(value & pos_right 0 string [] (Arg.info [] ~docv:"ARGS"))
     in
     set_dirs common;
-    let utop_target = dir |> Path.of_string |> Utop.utop_exe |> Path.to_string in
+    let dir = Path.of_string dir in
+    if not (Path.is_directory dir) then
+      die "cannot find directory: %a" Path.pp dir;
+    let utop_target = dir |> Utop.utop_exe |> Path.to_string in
     set_common_other common ~targets:[utop_target];
     let log = Log.create common in
     let (build_system, context, utop_path) =
@@ -1387,10 +1390,10 @@ let utop =
        let context = Main.find_context_exn setup ~name:ctx_name in
        let setup = { setup with contexts = [context] } in
        let target =
-         match resolve_targets_exn ~log common setup [utop_target] with
-         | [] -> die "no libraries defined in %s" dir
-         | [File target] -> target
-         | _ -> assert false
+         match resolve_target common ~setup utop_target with
+         | Error _ -> die "no library is defined in %a" Path.pp dir
+         | Ok [File target] -> target
+         | Ok _ -> assert false
        in
        do_build setup [File target] >>| fun () ->
        (setup.build_system, context, Path.to_string target)
diff --git a/test/blackbox-tests/dune.inc b/test/blackbox-tests/dune.inc
index 14165f47..6fefde28 100644
--- a/test/blackbox-tests/dune.inc
+++ b/test/blackbox-tests/dune.inc
@@ -780,6 +780,14 @@
    test-cases/utop
    (progn (run %{exe:cram.exe} -test run.t) (diff? run.t run.t.corrected)))))
 
+(alias
+ (name utop-default)
+ (deps (package dune) (source_tree test-cases/utop-default))
+ (action
+  (chdir
+   test-cases/utop-default
+   (progn (run %{exe:cram.exe} -test run.t) (diff? run.t run.t.corrected)))))
+
 (alias
  (name windows-diff)
  (deps (package dune) (source_tree test-cases/windows-diff))
@@ -892,6 +900,7 @@
   (alias too-many-parens)
   (alias use-meta)
   (alias utop)
+  (alias utop-default)
   (alias windows-diff)
   (alias workspaces)))
 
@@ -979,6 +988,7 @@
   (alias tests-stanza)
   (alias too-many-parens)
   (alias use-meta)
+  (alias utop-default)
   (alias windows-diff)
   (alias workspaces)))
 
diff --git a/test/blackbox-tests/test-cases/utop-default/lib-in-root/dune b/test/blackbox-tests/test-cases/utop-default/lib-in-root/dune
new file mode 100644
index 00000000..f254aaa2
--- /dev/null
+++ b/test/blackbox-tests/test-cases/utop-default/lib-in-root/dune
@@ -0,0 +1 @@
+(library (name mylib))
diff --git a/test/blackbox-tests/test-cases/utop-default/lib-in-root/dune-project b/test/blackbox-tests/test-cases/utop-default/lib-in-root/dune-project
new file mode 100644
index 00000000..7655de07
--- /dev/null
+++ b/test/blackbox-tests/test-cases/utop-default/lib-in-root/dune-project
@@ -0,0 +1 @@
+(lang dune 1.1)
diff --git a/test/blackbox-tests/test-cases/utop-default/lib-in-root/utop-script b/test/blackbox-tests/test-cases/utop-default/lib-in-root/utop-script
new file mode 100644
index 00000000..e69de29b
diff --git a/test/blackbox-tests/test-cases/utop-default/nothing-in-root/dune-project b/test/blackbox-tests/test-cases/utop-default/nothing-in-root/dune-project
new file mode 100644
index 00000000..7655de07
--- /dev/null
+++ b/test/blackbox-tests/test-cases/utop-default/nothing-in-root/dune-project
@@ -0,0 +1 @@
+(lang dune 1.1)
diff --git a/test/blackbox-tests/test-cases/utop-default/nothing-in-root/lib/dune b/test/blackbox-tests/test-cases/utop-default/nothing-in-root/lib/dune
new file mode 100644
index 00000000..f0d0755b
--- /dev/null
+++ b/test/blackbox-tests/test-cases/utop-default/nothing-in-root/lib/dune
@@ -0,0 +1 @@
+(library (name private_lib_a))
diff --git a/test/blackbox-tests/test-cases/utop-default/run.t b/test/blackbox-tests/test-cases/utop-default/run.t
new file mode 100644
index 00000000..22080882
--- /dev/null
+++ b/test/blackbox-tests/test-cases/utop-default/run.t
@@ -0,0 +1,19 @@
+By default, dune utop tries to make a toplevel for the current directory:
+
+  $ echo 'exit 0;;' | dune utop --root lib-in-root | grep -v 'version'
+  Entering directory 'lib-in-root'
+  
+  # 
+
+If there is no library there, it displays an error message:
+
+  $ dune utop --root nothing-in-root
+  Entering directory 'nothing-in-root'
+  No library is defined in .
+  [1]
+
+The message where the library path does not exist is different:
+
+  $ dune utop --root nothing-in-root does-not-exist
+  Cannot find directory: does-not-exist
+  [1]