diff --git a/bin/babel/dir.js b/bin/babel/dir.js
index 6785f2e768..7a19d53063 100644
--- a/bin/babel/dir.js
+++ b/bin/babel/dir.js
@@ -6,10 +6,6 @@ var fs             = require("fs");
 var _              = require("lodash");
 
 module.exports = function (commander, filenames, opts) {
-  if (commander.sourceMapsInline) {
-    opts.sourceMap = "inline";
-  }
-
   var write = function (src, relative) {
     // remove extension and then append back on .js
     relative = relative.replace(/\.(\w*?)$/, "") + ".js";
@@ -20,7 +16,7 @@ module.exports = function (commander, filenames, opts) {
       sourceFileName: path.relative(dest + "/..", src)
     });
 
-    if (commander.sourceMaps) {
+    if (commander.sourceMaps && commander.sourceMaps !== "inline") {
       var mapLoc = dest + ".map";
       data.code = util.addSourceMappingUrl(data.code, mapLoc);
       outputFileSync(mapLoc, JSON.stringify(data.map));
diff --git a/bin/babel/file.js b/bin/babel/file.js
index c052f536b9..f61efde461 100644
--- a/bin/babel/file.js
+++ b/bin/babel/file.js
@@ -6,7 +6,11 @@ var util             = require("./util");
 var fs               = require("fs");
 var _                = require("lodash");
 
-module.exports = function (commander, filenames) {
+module.exports = function (commander, filenames, opts) {
+  if (commander.sourceMaps === "inline") {
+    opts.sourceMaps = true;
+  }
+
   var results = [];
 
   var buildResult = function () {
@@ -41,7 +45,7 @@ module.exports = function (commander, filenames) {
       }
     });
 
-    if (commander.sourceMapsInline || (!commander.outFile && commander.sourceMaps)) {
+    if (commander.sourceMaps === "inline" || (!commander.outFile && commander.sourceMaps)) {
       code += "\n" + convertSourceMap.fromObject(map).toComment();
     }
 
@@ -55,7 +59,7 @@ module.exports = function (commander, filenames) {
     var result = buildResult();
 
     if (commander.outFile) {
-      if (commander.sourceMaps) {
+      if (commander.sourceMaps && commander.sourceMaps !== "inline") {
         var mapLoc = commander.outFile + ".map";
         result.code = util.addSourceMappingUrl(result.code, mapLoc);
         fs.writeFileSync(mapLoc, JSON.stringify(result.map));
diff --git a/bin/babel/index.js b/bin/babel/index.js
index 99ab67d1f7..dc3e7e0553 100755
--- a/bin/babel/index.js
+++ b/bin/babel/index.js
@@ -91,12 +91,6 @@ if (commander.watch) {
   }
 }
 
-if (commander.sourceMaps) {
-  if (!commander.outFile && !commander.outDir) {
-    errors.push("--source-maps requires --out-file or --out-dir");
-  }
-}
-
 if (errors.length) {
   console.error(errors.join(". "));
   process.exit(2);
diff --git a/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/in-files/src/bar/bar.js b/test/fixtures/bin/babel/dir --out-dir --source-maps inline/in-files/src/bar/bar.js
similarity index 100%
rename from test/fixtures/bin/babel/dir --out-dir --source-maps-inline/in-files/src/bar/bar.js
rename to test/fixtures/bin/babel/dir --out-dir --source-maps inline/in-files/src/bar/bar.js
diff --git a/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/in-files/src/foo.js b/test/fixtures/bin/babel/dir --out-dir --source-maps inline/in-files/src/foo.js
similarity index 100%
rename from test/fixtures/bin/babel/dir --out-dir --source-maps-inline/in-files/src/foo.js
rename to test/fixtures/bin/babel/dir --out-dir --source-maps inline/in-files/src/foo.js
diff --git a/test/fixtures/bin/babel/dir --out-dir --source-maps inline/options.json b/test/fixtures/bin/babel/dir --out-dir --source-maps inline/options.json
new file mode 100644
index 0000000000..a8ab883961
--- /dev/null
+++ b/test/fixtures/bin/babel/dir --out-dir --source-maps inline/options.json	
@@ -0,0 +1,3 @@
+{
+  "args": ["src", "--source-maps", "inline", "--out-dir", "lib"]
+}
diff --git a/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/out-files/lib/bar/bar.js b/test/fixtures/bin/babel/dir --out-dir --source-maps inline/out-files/lib/bar/bar.js
similarity index 100%
rename from test/fixtures/bin/babel/dir --out-dir --source-maps-inline/out-files/lib/bar/bar.js
rename to test/fixtures/bin/babel/dir --out-dir --source-maps inline/out-files/lib/bar/bar.js
diff --git a/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/out-files/lib/foo.js b/test/fixtures/bin/babel/dir --out-dir --source-maps inline/out-files/lib/foo.js
similarity index 100%
rename from test/fixtures/bin/babel/dir --out-dir --source-maps-inline/out-files/lib/foo.js
rename to test/fixtures/bin/babel/dir --out-dir --source-maps inline/out-files/lib/foo.js
diff --git a/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/stdout.txt b/test/fixtures/bin/babel/dir --out-dir --source-maps inline/stdout.txt
similarity index 100%
rename from test/fixtures/bin/babel/dir --out-dir --source-maps-inline/stdout.txt
rename to test/fixtures/bin/babel/dir --out-dir --source-maps inline/stdout.txt
diff --git a/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/options.json b/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/options.json
deleted file mode 100644
index c1a895be21..0000000000
--- a/test/fixtures/bin/babel/dir --out-dir --source-maps-inline/options.json	
+++ /dev/null
@@ -1,3 +0,0 @@
-{
-  "args": ["src", "--source-maps-inline", "--out-dir", "lib"]
-}
diff --git a/test/fixtures/bin/babel/filename --out-file --source-maps-inline/in-files/script.js b/test/fixtures/bin/babel/filename --out-file --source-maps inline/in-files/script.js
similarity index 100%
rename from test/fixtures/bin/babel/filename --out-file --source-maps-inline/in-files/script.js
rename to test/fixtures/bin/babel/filename --out-file --source-maps inline/in-files/script.js
diff --git a/test/fixtures/bin/babel/filename --out-file --source-maps inline/options.json b/test/fixtures/bin/babel/filename --out-file --source-maps inline/options.json
new file mode 100644
index 0000000000..d62fc24401
--- /dev/null
+++ b/test/fixtures/bin/babel/filename --out-file --source-maps inline/options.json	
@@ -0,0 +1,3 @@
+{
+  "args": ["script.js", "--source-maps", "inline", "--out-file", "script2.js"]
+}
diff --git a/test/fixtures/bin/babel/filename --out-file --source-maps-inline/out-files/script2.js b/test/fixtures/bin/babel/filename --out-file --source-maps inline/out-files/script2.js
similarity index 100%
rename from test/fixtures/bin/babel/filename --out-file --source-maps-inline/out-files/script2.js
rename to test/fixtures/bin/babel/filename --out-file --source-maps inline/out-files/script2.js
diff --git a/test/fixtures/bin/babel/filename --out-file --source-maps-inline/options.json b/test/fixtures/bin/babel/filename --out-file --source-maps-inline/options.json
deleted file mode 100644
index 45b018e525..0000000000
--- a/test/fixtures/bin/babel/filename --out-file --source-maps-inline/options.json	
+++ /dev/null
@@ -1,3 +0,0 @@
-{
-  "args": ["script.js", "--source-maps-inline", "--out-file", "script2.js"]
-}
diff --git a/test/fixtures/bin/babel/filenames --out-file --source-maps-inline/in-files/script.js b/test/fixtures/bin/babel/filenames --out-file --source-maps inline/in-files/script.js
similarity index 100%
rename from test/fixtures/bin/babel/filenames --out-file --source-maps-inline/in-files/script.js
rename to test/fixtures/bin/babel/filenames --out-file --source-maps inline/in-files/script.js
diff --git a/test/fixtures/bin/babel/filenames --out-file --source-maps-inline/in-files/script2.js b/test/fixtures/bin/babel/filenames --out-file --source-maps inline/in-files/script2.js
similarity index 100%
rename from test/fixtures/bin/babel/filenames --out-file --source-maps-inline/in-files/script2.js
rename to test/fixtures/bin/babel/filenames --out-file --source-maps inline/in-files/script2.js
diff --git a/test/fixtures/bin/babel/filenames --out-file --source-maps inline/options.json b/test/fixtures/bin/babel/filenames --out-file --source-maps inline/options.json
new file mode 100644
index 0000000000..4c967d3de1
--- /dev/null
+++ b/test/fixtures/bin/babel/filenames --out-file --source-maps inline/options.json	
@@ -0,0 +1,3 @@
+{
+  "args": ["script.js", "script2.js", "--source-maps", "inline", "--out-file", "script3.js"]
+}
diff --git a/test/fixtures/bin/babel/filenames --out-file --source-maps-inline/out-files/script3.js b/test/fixtures/bin/babel/filenames --out-file --source-maps inline/out-files/script3.js
similarity index 100%
rename from test/fixtures/bin/babel/filenames --out-file --source-maps-inline/out-files/script3.js
rename to test/fixtures/bin/babel/filenames --out-file --source-maps inline/out-files/script3.js
diff --git a/test/fixtures/bin/babel/filenames --out-file --source-maps-inline/options.json b/test/fixtures/bin/babel/filenames --out-file --source-maps-inline/options.json
deleted file mode 100644
index 4c5998f346..0000000000
--- a/test/fixtures/bin/babel/filenames --out-file --source-maps-inline/options.json	
+++ /dev/null
@@ -1,3 +0,0 @@
-{
-  "args": ["script.js", "script2.js", "--source-maps-inline", "--out-file", "script3.js"]
-}
diff --git a/test/fixtures/bin/babel/stdin --source-maps inline/options.json b/test/fixtures/bin/babel/stdin --source-maps inline/options.json
new file mode 100644
index 0000000000..e3938d3734
--- /dev/null
+++ b/test/fixtures/bin/babel/stdin --source-maps inline/options.json	
@@ -0,0 +1,3 @@
+{
+  "args": ["--source-maps", "inline"]
+}
diff --git a/test/fixtures/bin/babel/stdin --source-maps-inline/stdin.txt b/test/fixtures/bin/babel/stdin --source-maps inline/stdin.txt
similarity index 100%
rename from test/fixtures/bin/babel/stdin --source-maps-inline/stdin.txt
rename to test/fixtures/bin/babel/stdin --source-maps inline/stdin.txt
diff --git a/test/fixtures/bin/babel/stdin --source-maps-inline/stdout.txt b/test/fixtures/bin/babel/stdin --source-maps inline/stdout.txt
similarity index 100%
rename from test/fixtures/bin/babel/stdin --source-maps-inline/stdout.txt
rename to test/fixtures/bin/babel/stdin --source-maps inline/stdout.txt
diff --git a/test/fixtures/bin/babel/stdin --source-maps-inline/options.json b/test/fixtures/bin/babel/stdin --source-maps-inline/options.json
deleted file mode 100644
index a0d3fe33fb..0000000000
--- a/test/fixtures/bin/babel/stdin --source-maps-inline/options.json	
+++ /dev/null
@@ -1,3 +0,0 @@
-{
-  "args": ["--source-maps-inline"]
-}