diff --git a/lib/ansible/inventory/__init__.py b/lib/ansible/inventory/__init__.py
index abb8b0b082f..2ac869cc0bd 100644
--- a/lib/ansible/inventory/__init__.py
+++ b/lib/ansible/inventory/__init__.py
@@ -439,10 +439,14 @@ class Inventory(object):
         for group in groups.values():
             if pattern == 'all':
                 for host in group.get_hosts():
+                    if host.implicit:
+                        continue
                     __append_host_to_results(host)
             else:
                 if self._match(group.name, pattern) and group.name not in ('all', 'ungrouped'):
                     for host in group.get_hosts():
+                        if host.implicit:
+                            continue
                         __append_host_to_results(host)
                 else:
                     matching_hosts = self._match_list(group.get_hosts(), 'name', pattern)
@@ -457,6 +461,7 @@ class Inventory(object):
     def _create_implicit_localhost(self, pattern):
         new_host = Host(pattern)
         new_host.address = "127.0.0.1"
+        new_host.implicit = True
         new_host.vars = self.get_host_vars(new_host)
         new_host.set_variable("ansible_connection", "local")
         if "ansible_python_interpreter" not in new_host.vars:
diff --git a/lib/ansible/inventory/group.py b/lib/ansible/inventory/group.py
index 482fe2a18fc..63c297aaa47 100644
--- a/lib/ansible/inventory/group.py
+++ b/lib/ansible/inventory/group.py
@@ -140,10 +140,14 @@ class Group:
             for kk in kid_hosts:
                 if kk not in seen:
                     seen[kk] = 1
+                    if self.name == 'all' and kk.implicit:
+                        continue
                     hosts.append(kk)
         for mine in self.hosts:
             if mine not in seen:
                 seen[mine] = 1
+                if self.name == 'all' and mine.implicit:
+                    continue
                 hosts.append(mine)
         return hosts
 
diff --git a/lib/ansible/inventory/host.py b/lib/ansible/inventory/host.py
index 6263dcbc80d..36cc90f5377 100644
--- a/lib/ansible/inventory/host.py
+++ b/lib/ansible/inventory/host.py
@@ -60,6 +60,7 @@ class Host:
             uuid=self._uuid,
             gathered_facts=self._gathered_facts,
             groups=groups,
+            implicit=self.implicit,
         )
 
     def deserialize(self, data):
@@ -69,6 +70,7 @@ class Host:
         self.vars    = data.get('vars', dict())
         self.address = data.get('address', '')
         self._uuid   = data.get('uuid', uuid.uuid4())
+        self.implicit= data.get('implicit', False)
 
         groups = data.get('groups', [])
         for group_data in groups:
@@ -89,6 +91,7 @@ class Host:
 
         self._gathered_facts = False
         self._uuid = uuid.uuid4()
+        self.implicit = False
 
     def __repr__(self):
         return self.get_name()