diff --git a/hadoop-yarn-project/CHANGES.txt b/hadoop-yarn-project/CHANGES.txt
index bce2fcd3340..8359b76efc1 100644
--- a/hadoop-yarn-project/CHANGES.txt
+++ b/hadoop-yarn-project/CHANGES.txt
@@ -71,7 +71,10 @@ Release 0.23.4 - UNRELEASED
 
   IMPROVEMENTS
 
-     Change package of YarnClient to org.apache.hadoop. (Bikas Saha via vinodkv)
+    Change package of YarnClient to org.apache.hadoop. (Bikas Saha via vinodkv)
+
+    YARN-108. FSDownload can create cache directories with the wrong
+    permissions (Jason Lowe via bobby)
 
   OPTIMIZATIONS
 
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/main/java/org/apache/hadoop/yarn/util/FSDownload.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/main/java/org/apache/hadoop/yarn/util/FSDownload.java
index 24a23c8c0c2..a6c7b6e62a3 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/main/java/org/apache/hadoop/yarn/util/FSDownload.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/main/java/org/apache/hadoop/yarn/util/FSDownload.java
@@ -82,6 +82,13 @@ public class FSDownload implements Callable<Path> {
     return resource;
   }
 
+  private void createDir(Path path, FsPermission perm) throws IOException {
+    files.mkdir(path, perm, false);
+    if (!perm.equals(files.getUMask().applyUMask(perm))) {
+      files.setPermission(path, perm);
+    }
+  }
+
   private Path copy(Path sCopy, Path dstdir) throws IOException {
     FileSystem sourceFs = sCopy.getFileSystem(conf);
     Path dCopy = new Path(dstdir, sCopy.getName() + ".tmp");
@@ -144,9 +151,9 @@ public class FSDownload implements Callable<Path> {
     } while (files.util().exists(tmp));
     destDirPath = tmp;
 
-    files.mkdir(destDirPath, cachePerms, false);
+    createDir(destDirPath, cachePerms);
     final Path dst_work = new Path(destDirPath + "_tmp");
-    files.mkdir(dst_work, cachePerms, false);
+    createDir(dst_work, cachePerms);
 
     Path dFinal = files.makeQualified(new Path(dst_work, sCopy.getName()));
     try {
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/test/java/org/apache/hadoop/yarn/util/TestFSDownload.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/test/java/org/apache/hadoop/yarn/util/TestFSDownload.java
index fe1f3ac0031..e7da8ca57ec 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/test/java/org/apache/hadoop/yarn/util/TestFSDownload.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-common/src/test/java/org/apache/hadoop/yarn/util/TestFSDownload.java
@@ -42,6 +42,7 @@ import junit.framework.Assert;
 import org.apache.commons.logging.Log;
 import org.apache.commons.logging.LogFactory;
 import org.apache.hadoop.conf.Configuration;
+import org.apache.hadoop.fs.CommonConfigurationKeys;
 import org.apache.hadoop.fs.FSDataOutputStream;
 import org.apache.hadoop.fs.FileContext;
 import org.apache.hadoop.fs.FileStatus;
@@ -115,6 +116,7 @@ public class TestFSDownload {
   public void testDownload() throws IOException, URISyntaxException,
       InterruptedException {
     Configuration conf = new Configuration();
+    conf.set(CommonConfigurationKeys.FS_PERMISSIONS_UMASK_KEY, "077");
     FileContext files = FileContext.getLocalFSFileContext(conf);
     final Path basedir = files.makeQualified(new Path("target",
       TestFSDownload.class.getSimpleName()));
@@ -162,8 +164,14 @@ public class TestFSDownload {
         Path localized = p.getValue().get();
         assertEquals(sizes[Integer.valueOf(localized.getName())], p.getKey()
             .getSize());
-        FileStatus status = files.getFileStatus(localized);
+
+        FileStatus status = files.getFileStatus(localized.getParent());
         FsPermission perm = status.getPermission();
+        assertEquals("Cache directory permissions are incorrect",
+            new FsPermission((short)0755), perm);
+
+        status = files.getFileStatus(localized);
+        perm = status.getPermission();
         System.out.println("File permission " + perm + 
             " for rsrc vis " + p.getKey().getVisibility().name());
         assert(rsrcVis.containsKey(p.getKey()));