diff --git a/lib/cli/src/automigrate/fixes/npm7.test.ts b/lib/cli/src/automigrate/fixes/npm7.test.ts
new file mode 100644
index 000000000000..83346ccdfaf1
--- /dev/null
+++ b/lib/cli/src/automigrate/fixes/npm7.test.ts
@@ -0,0 +1,47 @@
+import { NPMProxy } from '../../js-package-manager/NPMProxy';
+import { npm7 } from './npm7';
+
+const mockExecuteCommand = jest.fn();
+class MockedNPMProxy extends NPMProxy {
+  executeCommand(...args) {
+    return mockExecuteCommand(...args);
+  }
+}
+
+function mockExecuteResults(map: Record<string, string>) {
+  mockExecuteCommand.mockImplementation((command, args) => {
+    const commandString = `${command} ${args.join(' ')}`;
+    if (map[commandString]) return map[commandString];
+
+    throw new Error(`Unexpected execution of '${commandString}'`);
+  });
+}
+
+describe('npm7 fix', () => {
+  describe('npm < 7', () => {
+    it('does not match', async () => {
+      mockExecuteResults({ 'npm --version': '6.0.0' });
+      expect(await npm7.check({ packageManager: new MockedNPMProxy() })).toEqual(null);
+    });
+  });
+
+  describe('npm 7+', () => {
+    it('matches if config is not installed', async () => {
+      mockExecuteResults({
+        'npm --version': '7.0.0',
+        'npm config get legacy-peer-deps --location=project': 'false',
+      });
+      expect(await npm7.check({ packageManager: new MockedNPMProxy() })).toEqual({
+        npmVersion: '7.0.0',
+      });
+    });
+
+    it('does not match if config is installed', async () => {
+      mockExecuteResults({
+        'npm --version': '7.0.0',
+        'npm config get legacy-peer-deps --location=project': 'true',
+      });
+      expect(await npm7.check({ packageManager: new MockedNPMProxy() })).toEqual(null);
+    });
+  });
+});
diff --git a/lib/cli/src/automigrate/fixes/npm7.ts b/lib/cli/src/automigrate/fixes/npm7.ts
new file mode 100644
index 000000000000..74f40e6723d8
--- /dev/null
+++ b/lib/cli/src/automigrate/fixes/npm7.ts
@@ -0,0 +1,41 @@
+import chalk from 'chalk';
+import dedent from 'ts-dedent';
+import { Fix } from '../types';
+import { NPMProxy } from '../../js-package-manager/NPMProxy';
+
+interface Npm7RunOptions {
+  npmVersion: string;
+}
+
+/**
+ * Is the user using npm7+? If so create a .npmrc with legacy-peer-deps=true
+ */
+export const npm7: Fix<Npm7RunOptions> = {
+  id: 'npm7',
+
+  async check({ packageManager }) {
+    if (packageManager.type !== 'npm') return null;
+
+    const npmVersion = (packageManager as NPMProxy).getNpmVersion();
+    if ((packageManager as NPMProxy).needsLegacyPeerDeps(npmVersion)) {
+      return { npmVersion };
+    }
+    return null;
+  },
+
+  prompt({ npmVersion }) {
+    const npmFormatted = chalk.cyan(`npm ${npmVersion}`);
+    return dedent`
+      We've detected you are running ${npmFormatted} which has peer dependency semantics which Storybook is incompatible with.
+
+      In order to work with Storybook's package structure, you'll need to run \`npm\` with the
+      \`--legacy-peer-deps=true\` flag. We can generate an \`.npmrc\` which will do that automatically.
+      
+      More info: ${chalk.yellow('https://github.com/storybookjs/storybook/issues/18298')}
+    `;
+  },
+
+  async run({ packageManager }) {
+    (packageManager as NPMProxy).setLegacyPeerDeps();
+  },
+};
diff --git a/lib/cli/src/js-package-manager/NPMProxy.ts b/lib/cli/src/js-package-manager/NPMProxy.ts
index 052bb6fcd255..a75d7d2b69fd 100644
--- a/lib/cli/src/js-package-manager/NPMProxy.ts
+++ b/lib/cli/src/js-package-manager/NPMProxy.ts
@@ -18,10 +18,28 @@ export class NPMProxy extends JsPackageManager {
     return `npm run ${command}`;
   }
 
+  getNpmVersion(): string {
+    return this.executeCommand('npm', ['--version']);
+  }
+
+  hasLegacyPeerDeps() {
+    return (
+      this.executeCommand('npm', ['config', 'get', 'legacy-peer-deps', '--location=project']) ===
+      'true'
+    );
+  }
+
+  setLegacyPeerDeps() {
+    this.executeCommand('npm', ['config', 'set', 'legacy-peer-deps=true', '--location=project']);
+  }
+
+  needsLegacyPeerDeps(version: string) {
+    return semver.gte(version, '7.0.0') && !this.hasLegacyPeerDeps();
+  }
+
   getInstallArgs(): string[] {
     if (!this.installArgs) {
-      const version = this.executeCommand('npm', ['--version']);
-      this.installArgs = semver.gte(version, '7.0.0')
+      this.installArgs = this.needsLegacyPeerDeps(this.getNpmVersion())
         ? ['install', '--legacy-peer-deps']
         : ['install'];
     }