diff --git a/src/uu/install/src/install.rs b/src/uu/install/src/install.rs
index 6267ed94f..a4f1ca6e6 100644
--- a/src/uu/install/src/install.rs
+++ b/src/uu/install/src/install.rs
@@ -356,13 +356,17 @@ fn directory(paths: Vec<String>, b: Behavior) -> i32 {
     } else {
         let mut all_successful = true;
 
-        for directory in paths.iter() {
-            let path = Path::new(directory);
-
+        for path in paths.iter().map(Path::new) {
             // if the path already exist, don't try to create it again
             if !path.exists() {
-                if let Err(e) = fs::create_dir(directory) {
-                    show_info!("{}: {}", path.display(), e.to_string());
+                // Differently than the primary functionality (MainFunction::Standard), the directory
+                // functionality should create all ancestors (or components) of a directory regardless
+                // of the presence of the "-D" flag.
+                // NOTE: the GNU "install" sets the expected mode only for the target directory. All
+                // created ancestor directories will have the default mode. Hence it is safe to use
+                // fs::create_dir_all and then only modify the target's dir mode.
+                if let Err(e) = fs::create_dir_all(path) {
+                    show_info!("{}: {}", path.display(), e);
                     all_successful = false;
                     continue;
                 }
diff --git a/tests/by-util/test_install.rs b/tests/by-util/test_install.rs
index af48a0e66..8ac6396fd 100644
--- a/tests/by-util/test_install.rs
+++ b/tests/by-util/test_install.rs
@@ -87,20 +87,81 @@ fn test_install_unimplemented_arg() {
 }
 
 #[test]
-fn test_install_component_directories() {
+fn test_install_ancestors_directories() {
     let (at, mut ucmd) = at_and_ucmd!();
-    let component1 = "component1";
-    let component2 = "component2";
-    let component3 = "component3";
+    let ancestor1 = "ancestor1";
+    let ancestor2 = "ancestor1/ancestor2";
+    let target_dir = "ancestor1/ancestor2/target_dir";
     let directories_arg = "-d";
 
-    ucmd.args(&[directories_arg, component1, component2, component3])
+    ucmd.args(&[directories_arg, target_dir])
         .succeeds()
         .no_stderr();
 
-    assert!(at.dir_exists(component1));
-    assert!(at.dir_exists(component2));
-    assert!(at.dir_exists(component3));
+    assert!(at.dir_exists(ancestor1));
+    assert!(at.dir_exists(ancestor2));
+    assert!(at.dir_exists(target_dir));
+}
+
+#[test]
+fn test_install_ancestors_mode_directories() {
+    let (at, mut ucmd) = at_and_ucmd!();
+    let ancestor1 = "ancestor1";
+    let ancestor2 = "ancestor1/ancestor2";
+    let target_dir = "ancestor1/ancestor2/target_dir";
+    let directories_arg = "-d";
+    let mode_arg = "--mode=700";
+
+    ucmd.args(&[mode_arg, directories_arg, target_dir])
+        .succeeds()
+        .no_stderr();
+
+    assert!(at.dir_exists(ancestor1));
+    assert!(at.dir_exists(ancestor2));
+    assert!(at.dir_exists(target_dir));
+
+    assert_ne!(0o40700 as u32, at.metadata(ancestor1).permissions().mode());
+    assert_ne!(0o40700 as u32, at.metadata(ancestor2).permissions().mode());
+
+    // Expected mode only on the target_dir.
+    assert_eq!(0o40700 as u32, at.metadata(target_dir).permissions().mode());
+}
+
+#[test]
+fn test_install_parent_directories() {
+    let (at, mut ucmd) = at_and_ucmd!();
+    let ancestor1 = "ancestor1";
+    let ancestor2 = "ancestor1/ancestor2";
+    let target_dir = "ancestor1/ancestor2/target_dir";
+    let directories_arg = "-d";
+
+    // Here one of the ancestors already exist and only the target_dir and
+    // its parent must be created.
+    at.mkdir(ancestor1);
+
+    ucmd.args(&[directories_arg, target_dir])
+        .succeeds()
+        .no_stderr();
+
+    assert!(at.dir_exists(ancestor2));
+    assert!(at.dir_exists(target_dir));
+}
+
+#[test]
+fn test_install_several_directories() {
+    let (at, mut ucmd) = at_and_ucmd!();
+    let dir1 = "dir1";
+    let dir2 = "dir2";
+    let dir3 = "dir3";
+    let directories_arg = "-d";
+
+    ucmd.args(&[directories_arg, dir1, dir2, dir3])
+        .succeeds()
+        .no_stderr();
+
+    assert!(at.dir_exists(dir1));
+    assert!(at.dir_exists(dir2));
+    assert!(at.dir_exists(dir3));
 }
 
 #[test]