diff --git a/fs/nfs/inode.c b/fs/nfs/inode.c
index 440b9cb..50a03f1 100644
--- a/fs/nfs/inode.c
+++ b/fs/nfs/inode.c
@@ -490,6 +490,11 @@
 #else
 		server->flags &= ~NFS_MOUNT_NOACL;
 #endif /* CONFIG_NFS_V3_ACL */
+		/*
+		 * The VFS shouldn't apply the umask to mode bits. We will
+		 * do so ourselves when necessary.
+		 */
+		sb->s_flags |= MS_POSIXACL;
 		if (server->namelen == 0 || server->namelen > NFS3_MAXNAMLEN)
 			server->namelen = NFS3_MAXNAMLEN;
 		sb->s_time_gran = 1;
diff --git a/fs/nfs/nfs3acl.c b/fs/nfs/nfs3acl.c
index 393ba79..89b6468 100644
--- a/fs/nfs/nfs3acl.c
+++ b/fs/nfs/nfs3acl.c
@@ -301,3 +301,32 @@
 fail:
 	return PTR_ERR(alloc);
 }
+
+int nfs3_proc_set_default_acl(struct inode *dir, struct inode *inode,
+		mode_t mode)
+{
+	struct posix_acl *dfacl, *acl;
+	int error = 0;
+
+	dfacl = nfs3_proc_getacl(dir, ACL_TYPE_DEFAULT);
+	if (IS_ERR(dfacl)) {
+		error = PTR_ERR(dfacl);
+		return (error == -EOPNOTSUPP) ? 0 : error;
+	}
+	if (!dfacl)
+		return 0;
+	acl = posix_acl_clone(dfacl, GFP_KERNEL);
+	error = -ENOMEM;
+	if (!acl)
+		goto out_release_dfacl;
+	error = posix_acl_create_masq(acl, &mode);
+	if (error < 0)
+		goto out_release_acl;
+	error = nfs3_proc_setacls(inode, acl, S_ISDIR(inode->i_mode) ?
+						      dfacl : NULL);
+out_release_acl:
+	posix_acl_release(acl);
+out_release_dfacl:
+	posix_acl_release(dfacl);
+	return error;
+}
diff --git a/fs/nfs/nfs3proc.c b/fs/nfs/nfs3proc.c
index d03bac0..a9ddc196 100644
--- a/fs/nfs/nfs3proc.c
+++ b/fs/nfs/nfs3proc.c
@@ -314,7 +314,8 @@
 		.fh		= &fhandle,
 		.fattr		= &fattr
 	};
-	int			status;
+	mode_t mode = sattr->ia_mode;
+	int status;
 
 	dprintk("NFS call  create %s\n", dentry->d_name.name);
 	arg.createmode = NFS3_CREATE_UNCHECKED;
@@ -324,6 +325,8 @@
 		arg.verifier[1] = current->pid;
 	}
 
+	sattr->ia_mode &= ~current->fs->umask;
+
 again:
 	dir_attr.valid = 0;
 	fattr.valid = 0;
@@ -370,6 +373,9 @@
 		nfs_refresh_inode(dentry->d_inode, &fattr);
 		dprintk("NFS reply setattr (post-create): %d\n", status);
 	}
+	if (status != 0)
+		goto out;
+	status = nfs3_proc_set_default_acl(dir, dentry->d_inode, mode);
 out:
 	dprintk("NFS reply create: %d\n", status);
 	return status;
@@ -539,15 +545,24 @@
 		.fh		= &fhandle,
 		.fattr		= &fattr
 	};
-	int			status;
+	int mode = sattr->ia_mode;
+	int status;
 
 	dprintk("NFS call  mkdir %s\n", dentry->d_name.name);
 	dir_attr.valid = 0;
 	fattr.valid = 0;
+
+	sattr->ia_mode &= ~current->fs->umask;
+
 	status = rpc_call(NFS_CLIENT(dir), NFS3PROC_MKDIR, &arg, &res, 0);
 	nfs_refresh_inode(dir, &dir_attr);
-	if (status == 0)
-		status = nfs_instantiate(dentry, &fhandle, &fattr);
+	if (status != 0)
+		goto out;
+	status = nfs_instantiate(dentry, &fhandle, &fattr);
+	if (status != 0)
+		goto out;
+	status = nfs3_proc_set_default_acl(dir, dentry->d_inode, mode);
+out:
 	dprintk("NFS reply mkdir: %d\n", status);
 	return status;
 }
@@ -642,6 +657,7 @@
 		.fh		= &fh,
 		.fattr		= &fattr
 	};
+	mode_t mode = sattr->ia_mode;
 	int status;
 
 	switch (sattr->ia_mode & S_IFMT) {
@@ -654,12 +670,20 @@
 
 	dprintk("NFS call  mknod %s %u:%u\n", dentry->d_name.name,
 			MAJOR(rdev), MINOR(rdev));
+
+	sattr->ia_mode &= ~current->fs->umask;
+
 	dir_attr.valid = 0;
 	fattr.valid = 0;
 	status = rpc_call(NFS_CLIENT(dir), NFS3PROC_MKNOD, &arg, &res, 0);
 	nfs_refresh_inode(dir, &dir_attr);
-	if (status == 0)
-		status = nfs_instantiate(dentry, &fh, &fattr);
+	if (status != 0)
+		goto out;
+	status = nfs_instantiate(dentry, &fh, &fattr);
+	if (status != 0)
+		goto out;
+	status = nfs3_proc_set_default_acl(dir, dentry->d_inode, mode);
+out:
 	dprintk("NFS reply mknod: %d\n", status);
 	return status;
 }