diff --git a/fs/ext4/ialloc.c b/fs/ext4/ialloc.c
index 17bc043308f33bb28cdb4d63ea7393b0dfc310e1..98ac2f1f23b3d74ec29ac31eeb276da4f1de5605 100644
--- a/fs/ext4/ialloc.c
+++ b/fs/ext4/ialloc.c
@@ -1098,6 +1098,17 @@ struct inode *__ext4_new_inode(handle_t *handle, struct inode *dir,
 	if (err)
 		goto fail_drop;
 
+	/*
+	 * Since the encryption xattr will always be unique, create it first so
+	 * that it's less likely to end up in an external xattr block and
+	 * prevent its deduplication.
+	 */
+	if (encrypt) {
+		err = fscrypt_inherit_context(dir, inode, handle, true);
+		if (err)
+			goto fail_free_drop;
+	}
+
 	err = ext4_init_acl(handle, inode, dir);
 	if (err)
 		goto fail_free_drop;
@@ -1119,12 +1130,6 @@ struct inode *__ext4_new_inode(handle_t *handle, struct inode *dir,
 		ei->i_datasync_tid = handle->h_transaction->t_tid;
 	}
 
-	if (encrypt) {
-		err = fscrypt_inherit_context(dir, inode, handle, true);
-		if (err)
-			goto fail_free_drop;
-	}
-
 	err = ext4_mark_inode_dirty(handle, inode);
 	if (err) {
 		ext4_std_error(sb, err);