diff --git a/fs/btrfs/inode.c b/fs/btrfs/inode.c
index 95ea58cb3065caf577aac23d4db5cf8fb30281e8..5792816d4fca8f40c5be6dad4945b8f6dfc29b38 100644
--- a/fs/btrfs/inode.c
+++ b/fs/btrfs/inode.c
@@ -3472,7 +3472,14 @@ static struct inode *btrfs_new_inode(struct btrfs_trans_handle *trans,
 		root->highest_inode = objectid;
 
 	inode->i_uid = current_fsuid();
-	inode->i_gid = current_fsgid();
+
+	if (dir->i_mode & S_ISGID) {
+		inode->i_gid = dir->i_gid;
+		if (S_ISDIR(mode))
+			mode |= S_ISGID;
+	} else
+		inode->i_gid = current_fsgid();
+
 	inode->i_mode = mode;
 	inode->i_ino = objectid;
 	inode_set_bytes(inode, 0);