diff --git a/src/uu/cp/src/cp.rs b/src/uu/cp/src/cp.rs
index 1bbc0e4a79..3052486e5b 100644
--- a/src/uu/cp/src/cp.rs
+++ b/src/uu/cp/src/cp.rs
@@ -1869,15 +1869,6 @@ pub(crate) fn copy_attributes(
     let source_metadata =
         fs::symlink_metadata(source).map_err(|e| CpError::IoErrContext(e, context.to_owned()))?;
 
-    let mode_explicitly_disabled = matches!(attributes.mode, Preserve::No { explicit: true });
-
-    // preserve is true by default if the destination is created by us and it's a directory
-    let mode = if !mode_explicitly_disabled && dest_is_freshly_created_dir {
-        Preserve::Yes { required: false }
-    } else {
-        attributes.mode
-    };
-
     // Track whether `chown` to the source's uid succeeded. If it did not
     // (typical case: non-root user copying a root-owned setuid file), the
     // mode preservation below must strip setuid/setgid so the destination
@@ -1924,7 +1915,7 @@ pub(crate) fn copy_attributes(
         Ok(())
     })?;
 
-    handle_preserve(mode, || -> CopyResult<()> {
+    handle_preserve(attributes.mode, || -> CopyResult<()> {
         // The `chmod()` system call that underlies the
         // `fs::set_permissions()` call is unable to change the
         // permissions of a symbolic link. In that case, we just
@@ -1962,6 +1953,24 @@ pub(crate) fn copy_attributes(
         Ok(())
     })?;
 
+    #[cfg(unix)]
+    if dest_is_freshly_created_dir
+        && matches!(attributes.mode, Preserve::No { .. })
+        && !dest.is_symlink()
+    {
+        use std::os::unix::fs::PermissionsExt;
+        let mut perms = source_metadata.permissions();
+        let umask = uucore::mode::get_umask();
+        let target_mode = match attributes.mode {
+            Preserve::No { explicit: true } => 0o777 & !umask,
+            Preserve::No { explicit: false } => (perms.mode() & 0o777) & !umask,
+            _ => unreachable!(),
+        };
+        perms.set_mode(target_mode);
+        fs::set_permissions(dest, perms)
+            .map_err(|e| CpError::IoErrContext(e, context.to_owned()))?;
+    }
+
     handle_preserve(attributes.timestamps, || -> CopyResult<()> {
         let (atime, mtime) = source_times(&source_metadata, context)?;
         // `set_file_times` opens the destination (O_RDONLY) before calling
diff --git a/tests/by-util/test_cp.rs b/tests/by-util/test_cp.rs
index 35371d2a75..52e8cf1868 100644
--- a/tests/by-util/test_cp.rs
+++ b/tests/by-util/test_cp.rs
@@ -7595,6 +7595,70 @@ fn test_no_preserve_mode_with_later_preserve() {
     assert_eq!(dst5_mode, 0o755);
 }
 
+#[test]
+#[cfg(unix)]
+#[cfg_attr(
+    wasi_runner,
+    ignore = "WASI: no chmod syscall, so required mode/ownership preservation always fails"
+)]
+fn test_cp_recursive_dir_umask() {
+    let scene = TestScenario::new(util_name!());
+    let at = &scene.fixtures;
+
+    at.mkdir("src");
+    at.mkdir("src/dir777");
+    at.set_mode("src/dir777", 0o777);
+    at.mkdir("src/dir750");
+    at.set_mode("src/dir750", 0o750);
+    at.mkdir("src/dir700");
+    at.set_mode("src/dir700", 0o700);
+    at.touch("src/dir777/f");
+    at.set_mode("src/dir777/f", 0o666);
+
+    // 1. Default cp -r under umask 077: apply source_mode & !umask
+    scene
+        .ucmd()
+        .umask(0o077)
+        .args(&["-r", "src", "dst1"])
+        .succeeds();
+    assert_eq!(at.metadata("dst1/dir777").mode() & 0o777, 0o700);
+    assert_eq!(at.metadata("dst1/dir750").mode() & 0o777, 0o700);
+    assert_eq!(at.metadata("dst1/dir700").mode() & 0o777, 0o700);
+    assert_eq!(at.metadata("dst1/dir777/f").mode() & 0o777, 0o600);
+
+    // 2. Default cp -r under umask 022: apply source_mode & !umask
+    scene
+        .ucmd()
+        .umask(0o022)
+        .args(&["-r", "src", "dst2"])
+        .succeeds();
+    assert_eq!(at.metadata("dst2/dir777").mode() & 0o777, 0o755);
+    assert_eq!(at.metadata("dst2/dir750").mode() & 0o777, 0o750);
+    assert_eq!(at.metadata("dst2/dir700").mode() & 0o777, 0o700);
+    assert_eq!(at.metadata("dst2/dir777/f").mode() & 0o777, 0o644);
+
+    // 3. cp -r -a under umask 077: mode is preserved and umask is bypassed
+    scene
+        .ucmd()
+        .umask(0o077)
+        .args(&["-a", "src", "dst3"])
+        .succeeds();
+    assert_eq!(at.metadata("dst3/dir777").mode() & 0o777, 0o777);
+    assert_eq!(at.metadata("dst3/dir750").mode() & 0o777, 0o750);
+    assert_eq!(at.metadata("dst3/dir700").mode() & 0o777, 0o700);
+    assert_eq!(at.metadata("dst3/dir777/f").mode() & 0o777, 0o666);
+
+    // 4. cp -r --no-preserve=mode under umask 022: directories get 0777 & !umask
+    scene
+        .ucmd()
+        .umask(0o022)
+        .args(&["-r", "--no-preserve=mode", "src", "dst4"])
+        .succeeds();
+    assert_eq!(at.metadata("dst4/dir777").mode() & 0o777, 0o755);
+    assert_eq!(at.metadata("dst4/dir750").mode() & 0o777, 0o755);
+    assert_eq!(at.metadata("dst4/dir700").mode() & 0o777, 0o755);
+}
+
 /// Test the behavior of preserving permissions when copying through a symlink
 #[test]
 #[cfg(unix)]