diff --git a/CMakeLists.txt b/CMakeLists.txt
index cf22a846e..51a17d9aa 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -19,9 +19,6 @@ set(PYBIND11_MASTER_PROJECT OFF)
 if (CMAKE_CURRENT_SOURCE_DIR STREQUAL CMAKE_SOURCE_DIR)
   set(PYBIND11_MASTER_PROJECT ON)
 endif()
-if (NOT PYBIND11_EXPORT_NAME)
-  set(PYBIND11_EXPORT_NAME "${PROJECT_NAME}Targets")
-endif ()
 
 option(PYBIND11_INSTALL "Install pybind11 header files?" ${PYBIND11_MASTER_PROJECT})
 option(PYBIND11_TEST    "Build pybind11 test suite?"     ${PYBIND11_MASTER_PROJECT})
@@ -133,6 +130,10 @@ if (PYBIND11_INSTALL)
           DESTINATION ${PYBIND11_CMAKECONFIG_INSTALL_DIR})
 
   if(NOT (CMAKE_VERSION VERSION_LESS 3.0))
+    if(NOT PYBIND11_EXPORT_NAME)
+      set(PYBIND11_EXPORT_NAME "${PROJECT_NAME}Targets")
+    endif()
+
     install(TARGETS pybind11 module embed
             EXPORT "${PYBIND11_EXPORT_NAME}")
     if(PYBIND11_MASTER_PROJECT)
diff --git a/tests/test_cmake_build/subdirectory_embed/CMakeLists.txt b/tests/test_cmake_build/subdirectory_embed/CMakeLists.txt
index 7b3babbcb..88ba60dd5 100644
--- a/tests/test_cmake_build/subdirectory_embed/CMakeLists.txt
+++ b/tests/test_cmake_build/subdirectory_embed/CMakeLists.txt
@@ -1,9 +1,25 @@
 cmake_minimum_required(VERSION 3.0)
 project(test_subdirectory_embed CXX)
 
+set(PYBIND11_INSTALL ON CACHE BOOL "")
+set(PYBIND11_EXPORT_NAME test_export)
+
 add_subdirectory(${PYBIND11_PROJECT_DIR} pybind11)
 
+# Test basic target functionality
 add_executable(test_cmake_build ../embed.cpp)
 target_link_libraries(test_cmake_build PRIVATE pybind11::embed)
 
 add_custom_target(check $<TARGET_FILE:test_cmake_build> ${PROJECT_SOURCE_DIR}/../test.py)
+
+# Test custom export group -- PYBIND11_EXPORT_NAME
+add_library(test_embed_lib ../embed.cpp)
+target_link_libraries(test_embed_lib PRIVATE pybind11::embed)
+
+install(TARGETS test_embed_lib
+        EXPORT  test_export
+        ARCHIVE DESTINATION bin
+        LIBRARY DESTINATION lib
+        RUNTIME DESTINATION lib)
+install(EXPORT      test_export
+        DESTINATION lib/cmake/test_export/test_export-Targets.cmake)