diff --git a/src/serve.rs b/src/serve.rs
index 5febd56..0018d0d 100644
--- a/src/serve.rs
+++ b/src/serve.rs
@@ -168,7 +168,7 @@ fn init_with_yubikey_challenge(rt: &Runtime, sub_arg_matches: &ArgMatches) {
     let mut yubikey_challenge = sub_arg_matches.value_of("yubikey-challenge").map(ToString::to_string);
     let init_encrypted_master_key = sub_arg_matches.value_of("init-encrypted-master-key");
 
-    if yubikey_challenge.is_none() {
+    if init_encrypted_master_key.is_some() && yubikey_challenge.is_none() {
         yubikey_challenge = rpassword::prompt_password("Yubikey challenge: ").ok();
     }