diff --git a/src/uu/mktemp/src/mktemp.rs b/src/uu/mktemp/src/mktemp.rs
index 54283b9af..f999d6675 100644
--- a/src/uu/mktemp/src/mktemp.rs
+++ b/src/uu/mktemp/src/mktemp.rs
@@ -79,7 +79,11 @@ pub fn uumain(args: impl uucore::Args) -> UResult<()> {
     let template = matches.value_of(ARG_TEMPLATE).unwrap();
     let tmpdir = matches.value_of(OPT_TMPDIR).unwrap_or_default();
 
-    let (template, mut tmpdir) = if matches.is_present(OPT_TMPDIR)
+    // Treat the template string as a path to get the directory
+    // containing the last component.
+    let path = PathBuf::from(template);
+
+    let (template, tmpdir) = if matches.is_present(OPT_TMPDIR)
         && !PathBuf::from(tmpdir).is_dir() // if a temp dir is provided, it must be an actual path
         && tmpdir.contains("XXX")
     // If this is a template, it has to contain at least 3 X
@@ -97,8 +101,24 @@ pub fn uumain(args: impl uucore::Args) -> UResult<()> {
         let tmp = env::temp_dir();
         (tmpdir, tmp)
     } else if !matches.is_present(OPT_TMPDIR) {
-        let tmp = env::temp_dir();
-        (template, tmp)
+        // In this case, the command line was `mktemp -t XXX`, so we
+        // treat the argument `XXX` as though it were a filename
+        // regardless of whether it has path separators in it.
+        if matches.is_present(OPT_T) {
+            let tmp = env::temp_dir();
+            (template, tmp)
+        // In this case, the command line was `mktemp XXX`, so we need
+        // to parse out the parent directory and the filename from the
+        // argument `XXX`, since it may be include path separators.
+        } else {
+            let tmp = match path.parent() {
+                None => PathBuf::from("."),
+                Some(d) => PathBuf::from(d),
+            };
+            let filename = path.file_name();
+            let template = filename.unwrap().to_str().unwrap();
+            (template, tmp)
+        }
     } else {
         (template, PathBuf::from(tmpdir))
     };
@@ -113,10 +133,6 @@ pub fn uumain(args: impl uucore::Args) -> UResult<()> {
         return Err(MkTempError::InvalidTemplate(template.into()).into());
     }
 
-    if matches.is_present(OPT_T) {
-        tmpdir = env::temp_dir();
-    }
-
     let res = if dry_run {
         dry_exec(tmpdir, prefix, rand, suffix)
     } else {
@@ -272,5 +288,19 @@ fn exec(dir: &Path, prefix: &str, rand: usize, suffix: &str, make_dir: bool) ->
             .map_err(|e| MkTempError::PersistError(e.file.path().to_path_buf()))?
             .1
     };
+
+    // Get just the last component of the path to the created
+    // temporary file or directory.
+    let filename = path.file_name();
+    let filename = filename.unwrap().to_str().unwrap();
+
+    // Join the directory to the path to get the path to print. We
+    // cannot use the path returned by the `Builder` because it gives
+    // the absolute path and we need to return a filename that matches
+    // the template given on the command-line which might be a
+    // relative path.
+    let mut path = dir.to_path_buf();
+    path.push(filename);
+
     println_verbatim(path).map_err_context(|| "failed to print directory name".to_owned())
 }
diff --git a/tests/by-util/test_mktemp.rs b/tests/by-util/test_mktemp.rs
index e824df061..13d7c8e21 100644
--- a/tests/by-util/test_mktemp.rs
+++ b/tests/by-util/test_mktemp.rs
@@ -411,3 +411,71 @@ fn test_mktemp_directory_tmpdir() {
     result.no_stderr().stdout_contains("apt-key-gpghome.");
     assert!(PathBuf::from(result.stdout_str().trim()).is_dir());
 }
+
+/// Decide whether a string matches a given template.
+///
+/// In the template, the character `'X'` is treated as a wildcard,
+/// that is, it matches anything. All other characters in `template`
+/// and `s` must match exactly.
+///
+/// # Examples
+///
+/// ```rust,ignore
+/// # These all match.
+/// assert!(matches_template("abc", "abc"));
+/// assert!(matches_template("aXc", "abc"));
+/// assert!(matches_template("XXX", "abc"));
+///
+/// # None of these match
+/// assert!(matches_template("abc", "abcd"));
+/// assert!(matches_template("abc", "ab"));
+/// assert!(matches_template("aXc", "abd"));
+/// assert!(matches_template("XXX", "abcd"));
+/// ```
+///
+fn matches_template(template: &str, s: &str) -> bool {
+    if template.len() != s.len() {
+        return false;
+    }
+    for (a, b) in template.chars().zip(s.chars()) {
+        if !(a == 'X' || a == b) {
+            return false;
+        }
+    }
+    true
+}
+
+/// An assertion that uses [`matches_template`] and adds a helpful error message.
+macro_rules! assert_matches_template {
+    ($template:expr, $s:expr) => {{
+        assert!(
+            matches_template($template, $s),
+            "\"{}\" != \"{}\"",
+            $template,
+            $s
+        );
+    }};
+}
+
+/// Test that the file is created in the directory given by the template.
+#[test]
+fn test_respect_template() {
+    let (at, mut ucmd) = at_and_ucmd!();
+    let template = "XXX";
+    let result = ucmd.arg(template).succeeds();
+    let filename = result.no_stderr().stdout_str().trim_end();
+    assert_matches_template!(template, filename);
+    assert!(at.file_exists(filename));
+}
+
+/// Test that the file is created in the directory given by the template.
+#[test]
+fn test_respect_template_directory() {
+    let (at, mut ucmd) = at_and_ucmd!();
+    at.mkdir("d");
+    let template = "d/XXX";
+    let result = ucmd.arg(template).succeeds();
+    let filename = result.no_stderr().stdout_str().trim_end();
+    assert_matches_template!(template, filename);
+    assert!(at.file_exists(filename));
+}