diff --git a/fast-import.c b/fast-import.c
index 6d491b92fe..016d2456f6 100644
--- a/fast-import.c
+++ b/fast-import.c
@@ -170,6 +170,11 @@ Format of STDIN stream:
 #define DEPTH_BITS 13
 #define MAX_DEPTH ((1<<DEPTH_BITS)-1)
 
+/*
+ * We abuse the setuid bit on directories to mean "do not delta".
+ */
+#define NO_DELTA S_ISUID
+
 struct object_entry {
 	struct pack_idx_entry idx;
 	struct object_entry *next;
@@ -1416,8 +1421,9 @@ static void mktree(struct tree_content *t, int v, struct strbuf *b)
 		struct tree_entry *e = t->entries[i];
 		if (!e->versions[v].mode)
 			continue;
-		strbuf_addf(b, "%o %s%c", (unsigned int)e->versions[v].mode,
-					e->name->str_dat, '\0');
+		strbuf_addf(b, "%o %s%c",
+			(unsigned int)(e->versions[v].mode & ~NO_DELTA),
+			e->name->str_dat, '\0');
 		strbuf_add(b, e->versions[v].sha1, 20);
 	}
 }
@@ -1427,7 +1433,7 @@ static void store_tree(struct tree_entry *root)
 	struct tree_content *t = root->tree;
 	unsigned int i, j, del;
 	struct last_object lo = { STRBUF_INIT, 0, 0, /* no_swap */ 1 };
-	struct object_entry *le;
+	struct object_entry *le = NULL;
 
 	if (!is_null_sha1(root->versions[1].sha1))
 		return;
@@ -1437,7 +1443,8 @@ static void store_tree(struct tree_entry *root)
 			store_tree(t->entries[i]);
 	}
 
-	le = find_object(root->versions[0].sha1);
+	if (!(root->versions[0].mode & NO_DELTA))
+		le = find_object(root->versions[0].sha1);
 	if (S_ISDIR(root->versions[0].mode) && le && le->pack_id == pack_id) {
 		mktree(t, 0, &old_tree);
 		lo.data = old_tree;
@@ -1471,6 +1478,7 @@ static void tree_content_replace(
 {
 	if (!S_ISDIR(mode))
 		die("Root cannot be a non-directory");
+	hashclr(root->versions[0].sha1);
 	hashcpy(root->versions[1].sha1, sha1);
 	if (root->tree)
 		release_tree_content_recursive(root->tree);
@@ -1515,6 +1523,23 @@ static int tree_content_set(
 				if (e->tree)
 					release_tree_content_recursive(e->tree);
 				e->tree = subtree;
+
+				/*
+				 * We need to leave e->versions[0].sha1 alone
+				 * to avoid modifying the preimage tree used
+				 * when writing out the parent directory.
+				 * But after replacing the subdir with a
+				 * completely different one, it's not a good
+				 * delta base any more, and besides, we've
+				 * thrown away the tree entries needed to
+				 * make a delta against it.
+				 *
+				 * So let's just explicitly disable deltas
+				 * for the subtree.
+				 */
+				if (S_ISDIR(e->versions[0].mode))
+					e->versions[0].mode |= NO_DELTA;
+
 				hashclr(root->versions[1].sha1);
 				return 1;
 			}
@@ -2938,7 +2963,7 @@ static void print_ls(int mode, const unsigned char *sha1, const char *path)
 		/* mode SP type SP object_name TAB path LF */
 		strbuf_reset(&line);
 		strbuf_addf(&line, "%06o %s %s\t",
-				mode, type, sha1_to_hex(sha1));
+				mode & ~NO_DELTA, type, sha1_to_hex(sha1));
 		quote_c_style(path, &line, NULL, 0);
 		strbuf_addch(&line, '\n');
 	}
diff --git a/t/t9300-fast-import.sh b/t/t9300-fast-import.sh
index 4ef7624646..dbe109963e 100755
--- a/t/t9300-fast-import.sh
+++ b/t/t9300-fast-import.sh
@@ -833,6 +833,47 @@ test_expect_success \
 	 git diff-tree --abbrev --raw L^ L >output &&
 	 test_cmp expect output'
 
+cat >input <<INPUT_END
+blob
+mark :1
+data <<EOF
+the data
+EOF
+
+commit refs/heads/L2
+committer C O Mitter <committer@example.com> 1112912473 -0700
+data <<COMMIT
+init L2
+COMMIT
+M 644 :1 a/b/c
+M 644 :1 a/b/d
+M 644 :1 a/e/f
+
+commit refs/heads/L2
+committer C O Mitter <committer@example.com> 1112912473 -0700
+data <<COMMIT
+update L2
+COMMIT
+C a g
+C a/e g/b
+M 644 :1 g/b/h
+INPUT_END
+
+cat <<EOF >expect
+g/b/f
+g/b/h
+EOF
+
+test_expect_success \
+    'L: nested tree copy does not corrupt deltas' \
+	'git fast-import <input &&
+	git ls-tree L2 g/b/ >tmp &&
+	cat tmp | cut -f 2 >actual &&
+	test_cmp expect actual &&
+	git fsck `git rev-parse L2`'
+
+git update-ref -d refs/heads/L2
+
 ###
 ### series M
 ###