diff --git a/commands/app.go b/commands/app.go
index 66030be2..31d62f87 100644
--- a/commands/app.go
+++ b/commands/app.go
@@ -121,7 +121,13 @@ func appAction(ctx *cli.Context) error {
 
 	// Allow custom contexts.
 	if caCtx := ctx.String("context"); caCtx != "" {
-		if err := step.Contexts().SetCurrent(caCtx); err != nil {
+		if _, ok := step.Contexts().Get(caCtx); ok {
+			if err := step.Contexts().SetCurrent(caCtx); err != nil {
+				return err
+			}
+		} else if token == "" {
+			return fmt.Errorf("context %q not found", caCtx)
+		} else if err := createContext(caCtx); err != nil {
 			return err
 		}
 	}
@@ -234,6 +240,26 @@ To get a linked authority token:
 	return nil
 }
 
+// createContext creates a new context using the given name for the context,
+// authority and profile.
+func createContext(name string) error {
+	if err := step.Contexts().Add(&step.Context{
+		Name: name, Authority: name, Profile: name,
+	}); err != nil {
+		return fmt.Errorf("error adding context: %w", err)
+	}
+	if err := step.Contexts().SaveCurrent(name); err != nil {
+		return fmt.Errorf("error saving context: %w", err)
+	}
+	if err := step.Contexts().SetCurrent(name); err != nil {
+		return fmt.Errorf("error setting context: %w", err)
+	}
+	if err := os.MkdirAll(step.Path(), 0700); err != nil {
+		return fmt.Errorf("error creating directory: %w", err)
+	}
+	return nil
+}
+
 // fatal writes the passed error on the standard error and exits with the exit
 // code 1. If the environment variable STEPDEBUG is set to 1 it shows the
 // stack trace of the error.