diff --git a/importlib_metadata/__init__.py b/importlib_metadata/__init__.py
index ac0969d3..ada58d43 100644
--- a/importlib_metadata/__init__.py
+++ b/importlib_metadata/__init__.py
@@ -1030,7 +1030,6 @@ def __bool__(self):
         return bool(self.name)
 
 
-@install
 class MetadataPathFinder(NullFinder, DistributionFinder):
     """A degenerate finder for distribution packages on the file system.
 
@@ -1309,3 +1308,6 @@ def importable_name(name):
         return '.' not in name
 
     return filter(importable_name, opt_names)
+
+
+install(MetadataPathFinder)
diff --git a/importlib_metadata/_compat/__init__.py b/importlib_metadata/_compat/__init__.py
index fe9a721e..8eead9d1 100644
--- a/importlib_metadata/_compat/__init__.py
+++ b/importlib_metadata/_compat/__init__.py
@@ -6,15 +6,22 @@
 
 def install(cls):
     """
-    Class decorator for installation on sys.meta_path.
+    Install cls on sys.meta_path.
 
     Adds the backport DistributionFinder to sys.meta_path and
     attempts to disable the finder functionality of the stdlib
     DistributionFinder.
+
+    Call this only once the calling module is fully initialized, from
+    its end. The installed finder resolves PathDistribution from that
+    module's globals, so installing it any earlier publishes a finder
+    that anything walking sys.meta_path would trip over (#525).
+
+    Returns nothing, so that use as a class decorator fails outright
+    rather than reopening that window.
     """
     sys.meta_path.append(cls())
     disable_stdlib_finder()
-    return cls
 
 
 def disable_stdlib_finder():
diff --git a/newsfragments/525.bugfix.rst b/newsfragments/525.bugfix.rst
new file mode 100644
index 00000000..b8a8c85f
--- /dev/null
+++ b/newsfragments/525.bugfix.rst
@@ -0,0 +1,6 @@
+``MetadataPathFinder`` is now installed on ``sys.meta_path`` only after the
+module is fully initialized. Previously it was installed partway through, so
+anything walking ``sys.meta_path`` during that window, such as another thread
+calling ``entry_points()``, would raise ``NameError: name 'PathDistribution'
+is not defined``. An import interrupted in that window left the half-built
+finder installed for the life of the process, failing every subsequent lookup.
diff --git a/tests/compat/test_install.py b/tests/compat/test_install.py
new file mode 100644
index 00000000..13457239
--- /dev/null
+++ b/tests/compat/test_install.py
@@ -0,0 +1,39 @@
+"""
+The finder installed on ``sys.meta_path`` is particular to the backport;
+the stdlib reaches ``MetadataPathFinder`` through its own ``PathFinder``
+and so never publishes a finder of its own (#525).
+"""
+
+import contextlib
+import importlib.util
+import os
+import sys
+import unittest
+from unittest import mock
+
+from importlib_metadata import _compat
+
+
+class FinderInstallTests(unittest.TestCase):
+    def test_installed_after_module_initialized(self):
+        """
+        Install the finder only after the module can satisfy it.
+
+        An installed finder resolves ``PathDistribution`` from the module
+        globals, so a finder installed before the module body completes is
+        one that anything walking ``sys.meta_path`` would trip over.
+        """
+        snapshots = []
+
+        def capture(cls):
+            snapshots.append(set(sys._getframe(1).f_globals))
+
+        spec = importlib.util.find_spec('importlib_metadata')
+        with contextlib.ExitStack() as stack:
+            stack.enter_context(mock.patch.object(_compat, 'install', capture))
+            # Don't let the re-executed module leak a fork handler.
+            stack.enter_context(mock.patch.object(os, 'register_at_fork', create=True))
+            spec.loader.exec_module(importlib.util.module_from_spec(spec))
+
+        (globals_at_install,) = snapshots
+        assert 'PathDistribution' in globals_at_install