diff --git a/fs/ocfs2/alloc.c b/fs/ocfs2/alloc.c
index 72cefe2..4ba7f0b 100644
--- a/fs/ocfs2/alloc.c
+++ b/fs/ocfs2/alloc.c
@@ -5835,6 +5835,15 @@
 	memset(&di->id2, 0, blocksize - offsetof(struct ocfs2_dinode, id2));
 }
 
+void ocfs2_dinode_new_extent_list(struct inode *inode,
+				  struct ocfs2_dinode *di)
+{
+	ocfs2_zero_dinode_id2(inode, di);
+	di->id2.i_list.l_tree_depth = 0;
+	di->id2.i_list.l_next_free_rec = 0;
+	di->id2.i_list.l_count = cpu_to_le16(ocfs2_extent_recs_per_inode(inode->i_sb));
+}
+
 void ocfs2_set_inode_data_inline(struct inode *inode, struct ocfs2_dinode *di)
 {
 	struct ocfs2_inode_info *oi = OCFS2_I(inode);
@@ -5863,7 +5872,6 @@
 	struct ocfs2_inode_info *oi = OCFS2_I(inode);
 	struct ocfs2_super *osb = OCFS2_SB(inode->i_sb);
 	struct ocfs2_dinode *di = (struct ocfs2_dinode *)di_bh->b_data;
-	struct ocfs2_extent_list *el = &di->id2.i_list;
 	struct ocfs2_alloc_context *data_ac = NULL;
 	struct page **pages = NULL;
 	loff_t end = osb->s_clustersize;
@@ -5956,11 +5964,7 @@
 	di->i_dyn_features = cpu_to_le16(oi->ip_dyn_features);
 	spin_unlock(&oi->ip_lock);
 
-	ocfs2_zero_dinode_id2(inode, di);
-
-	el->l_tree_depth = 0;
-	el->l_next_free_rec = 0;
-	el->l_count = cpu_to_le16(ocfs2_extent_recs_per_inode(inode->i_sb));
+	ocfs2_dinode_new_extent_list(inode, di);
 
 	ocfs2_journal_dirty(handle, di_bh);
 
diff --git a/fs/ocfs2/alloc.h b/fs/ocfs2/alloc.h
index 826e0a6..42ff94b 100644
--- a/fs/ocfs2/alloc.h
+++ b/fs/ocfs2/alloc.h
@@ -62,6 +62,7 @@
 	return le16_to_cpu(fe->id2.i_list.l_tree_depth) + 2;
 }
 
+void ocfs2_dinode_new_extent_list(struct inode *inode, struct ocfs2_dinode *di);
 void ocfs2_set_inode_data_inline(struct inode *inode, struct ocfs2_dinode *di);
 int ocfs2_convert_inline_data_to_extents(struct inode *inode,
 					 struct buffer_head *di_bh);
diff --git a/fs/ocfs2/dir.c b/fs/ocfs2/dir.c
index 8deed89..e153513 100644
--- a/fs/ocfs2/dir.c
+++ b/fs/ocfs2/dir.c
@@ -72,6 +72,7 @@
 static int ocfs2_extend_dir(struct ocfs2_super *osb,
 			    struct inode *dir,
 			    struct buffer_head *parent_fe_bh,
+			    unsigned int blocks_wanted,
 			    struct buffer_head **new_de_bh);
 static int ocfs2_do_extend_dir(struct super_block *sb,
 			       handle_t *handle,
@@ -331,12 +332,20 @@
 	return ocfs2_find_entry_el(name, namelen, dir, res_dir);
 }
 
+/*
+ * Update inode number and type of a previously found directory entry.
+ */
 int ocfs2_update_entry(struct inode *dir, handle_t *handle,
 		       struct buffer_head *de_bh, struct ocfs2_dir_entry *de,
 		       struct inode *new_entry_inode)
 {
 	int ret;
 
+	/*
+	 * The same code works fine for both inline-data and extent
+	 * based directories, so no need to split this up.
+	 */
+
 	ret = ocfs2_journal_access(handle, dir, de_bh,
 				   OCFS2_JOURNAL_ACCESS_WRITE);
 	if (ret) {
@@ -353,14 +362,10 @@
 	return ret;
 }
 
-/*
- * ocfs2_delete_entry deletes a directory entry by merging it with the
- * previous entry
- */
-int ocfs2_delete_entry(handle_t *handle,
-		       struct inode *dir,
-		       struct ocfs2_dir_entry *de_del,
-		       struct buffer_head *bh)
+static int __ocfs2_delete_entry(handle_t *handle, struct inode *dir,
+				struct ocfs2_dir_entry *de_del,
+				struct buffer_head *bh, char *first_de,
+				unsigned int bytes)
 {
 	struct ocfs2_dir_entry *de, *pde;
 	int i, status = -ENOENT;
@@ -369,8 +374,8 @@
 
 	i = 0;
 	pde = NULL;
-	de = (struct ocfs2_dir_entry *) bh->b_data;
-	while (i < bh->b_size) {
+	de = (struct ocfs2_dir_entry *) first_de;
+	while (i < bytes) {
 		if (!ocfs2_check_dir_entry(dir, de, bh, i)) {
 			status = -EIO;
 			mlog_errno(status);
@@ -403,6 +408,58 @@
 	return status;
 }
 
+static inline int ocfs2_delete_entry_id(handle_t *handle,
+					struct inode *dir,
+					struct ocfs2_dir_entry *de_del,
+					struct buffer_head *bh)
+{
+	int ret;
+	struct buffer_head *di_bh = NULL;
+	struct ocfs2_dinode *di;
+	struct ocfs2_inline_data *data;
+
+	ret = ocfs2_read_block(OCFS2_SB(dir->i_sb), OCFS2_I(dir)->ip_blkno,
+			       &di_bh, OCFS2_BH_CACHED, dir);
+	if (ret) {
+		mlog_errno(ret);
+		goto out;
+	}
+
+	di = (struct ocfs2_dinode *)di_bh->b_data;
+	data = &di->id2.i_data;
+
+	ret = __ocfs2_delete_entry(handle, dir, de_del, bh, data->id_data,
+				   i_size_read(dir));
+
+	brelse(di_bh);
+out:
+	return ret;
+}
+
+static inline int ocfs2_delete_entry_el(handle_t *handle,
+					struct inode *dir,
+					struct ocfs2_dir_entry *de_del,
+					struct buffer_head *bh)
+{
+	return __ocfs2_delete_entry(handle, dir, de_del, bh, bh->b_data,
+				    bh->b_size);
+}
+
+/*
+ * ocfs2_delete_entry deletes a directory entry by merging it with the
+ * previous entry
+ */
+int ocfs2_delete_entry(handle_t *handle,
+		       struct inode *dir,
+		       struct ocfs2_dir_entry *de_del,
+		       struct buffer_head *bh)
+{
+	if (OCFS2_I(dir)->ip_dyn_features & OCFS2_INLINE_DATA_FL)
+		return ocfs2_delete_entry_id(handle, dir, de_del, bh);
+
+	return ocfs2_delete_entry_el(handle, dir, de_del, bh);
+}
+
 /*
  * Check whether 'de' has enough room to hold an entry of
  * 'new_rec_len' bytes.
@@ -444,21 +501,30 @@
 	unsigned long offset;
 	unsigned short rec_len;
 	struct ocfs2_dir_entry *de, *de1;
-	struct super_block *sb;
+	struct ocfs2_dinode *di = (struct ocfs2_dinode *)parent_fe_bh->b_data;
+	struct super_block *sb = dir->i_sb;
 	int retval, status;
+	unsigned int size = sb->s_blocksize;
+	char *data_start = insert_bh->b_data;
 
 	mlog_entry_void();
 
-	sb = dir->i_sb;
-
 	if (!namelen)
 		return -EINVAL;
 
+	if (OCFS2_I(dir)->ip_dyn_features & OCFS2_INLINE_DATA_FL) {
+		data_start = di->id2.i_data.id_data;
+		size = i_size_read(dir);
+
+		BUG_ON(insert_bh != parent_fe_bh);
+	}
+
 	rec_len = OCFS2_DIR_REC_LEN(namelen);
 	offset = 0;
-	de = (struct ocfs2_dir_entry *) insert_bh->b_data;
+	de = (struct ocfs2_dir_entry *) data_start;
 	while (1) {
-		BUG_ON((char *)de >= sb->s_blocksize + insert_bh->b_data);
+		BUG_ON((char *)de >= (size + data_start));
+
 		/* These checks should've already been passed by the
 		 * prepare function, but I guess we can leave them
 		 * here anyway. */
@@ -939,16 +1005,78 @@
 	return !priv.seen_other;
 }
 
-int ocfs2_fill_new_dir(struct ocfs2_super *osb,
-		       handle_t *handle,
-		       struct inode *parent,
-		       struct inode *inode,
-		       struct buffer_head *fe_bh,
-		       struct ocfs2_alloc_context *data_ac)
+static void ocfs2_fill_initial_dirents(struct inode *inode,
+				       struct inode *parent,
+				       char *start, unsigned int size)
+{
+	struct ocfs2_dir_entry *de = (struct ocfs2_dir_entry *)start;
+
+	de->inode = cpu_to_le64(OCFS2_I(inode)->ip_blkno);
+	de->name_len = 1;
+	de->rec_len =
+		cpu_to_le16(OCFS2_DIR_REC_LEN(de->name_len));
+	strcpy(de->name, ".");
+	ocfs2_set_de_type(de, S_IFDIR);
+
+	de = (struct ocfs2_dir_entry *) ((char *)de + le16_to_cpu(de->rec_len));
+	de->inode = cpu_to_le64(OCFS2_I(parent)->ip_blkno);
+	de->rec_len = cpu_to_le16(size - OCFS2_DIR_REC_LEN(1));
+	de->name_len = 2;
+	strcpy(de->name, "..");
+	ocfs2_set_de_type(de, S_IFDIR);
+}
+
+/*
+ * This works together with code in ocfs2_mknod_locked() which sets
+ * the inline-data flag and initializes the inline-data section.
+ */
+static int ocfs2_fill_new_dir_id(struct ocfs2_super *osb,
+				 handle_t *handle,
+				 struct inode *parent,
+				 struct inode *inode,
+				 struct buffer_head *di_bh)
+{
+	int ret;
+	struct ocfs2_dinode *di = (struct ocfs2_dinode *)di_bh->b_data;
+	struct ocfs2_inline_data *data = &di->id2.i_data;
+	unsigned int size = le16_to_cpu(data->id_count);
+
+	ret = ocfs2_journal_access(handle, inode, di_bh,
+				   OCFS2_JOURNAL_ACCESS_WRITE);
+	if (ret) {
+		mlog_errno(ret);
+		goto out;
+	}
+
+	ocfs2_fill_initial_dirents(inode, parent, data->id_data, size);
+
+	ocfs2_journal_dirty(handle, di_bh);
+	if (ret) {
+		mlog_errno(ret);
+		goto out;
+	}
+
+	i_size_write(inode, size);
+	inode->i_nlink = 2;
+	inode->i_blocks = ocfs2_inode_sector_count(inode);
+
+	ret = ocfs2_mark_inode_dirty(handle, inode, di_bh);
+	if (ret < 0)
+		mlog_errno(ret);
+
+out:
+	return ret;
+}
+
+static int ocfs2_fill_new_dir_el(struct ocfs2_super *osb,
+				 handle_t *handle,
+				 struct inode *parent,
+				 struct inode *inode,
+				 struct buffer_head *fe_bh,
+				 struct ocfs2_alloc_context *data_ac)
 {
 	int status;
 	struct buffer_head *new_bh = NULL;
-	struct ocfs2_dir_entry *de = NULL;
 
 	mlog_entry_void();
 
@@ -969,20 +1097,8 @@
 	}
 	memset(new_bh->b_data, 0, osb->sb->s_blocksize);
 
-	de = (struct ocfs2_dir_entry *) new_bh->b_data;
-	de->inode = cpu_to_le64(OCFS2_I(inode)->ip_blkno);
-	de->name_len = 1;
-	de->rec_len =
-		cpu_to_le16(OCFS2_DIR_REC_LEN(de->name_len));
-	strcpy(de->name, ".");
-	ocfs2_set_de_type(de, S_IFDIR);
-	de = (struct ocfs2_dir_entry *) ((char *)de + le16_to_cpu(de->rec_len));
-	de->inode = cpu_to_le64(OCFS2_I(parent)->ip_blkno);
-	de->rec_len = cpu_to_le16(inode->i_sb->s_blocksize -
-				  OCFS2_DIR_REC_LEN(1));
-	de->name_len = 2;
-	strcpy(de->name, "..");
-	ocfs2_set_de_type(de, S_IFDIR);
+	ocfs2_fill_initial_dirents(inode, parent, new_bh->b_data,
+				   osb->sb->s_blocksize);
 
 	status = ocfs2_journal_dirty(handle, new_bh);
 	if (status < 0) {
@@ -1008,6 +1124,230 @@
 	return status;
 }
 
+int ocfs2_fill_new_dir(struct ocfs2_super *osb,
+		       handle_t *handle,
+		       struct inode *parent,
+		       struct inode *inode,
+		       struct buffer_head *fe_bh,
+		       struct ocfs2_alloc_context *data_ac)
+{
+	BUG_ON(!ocfs2_supports_inline_data(osb) && data_ac == NULL);
+
+	if (OCFS2_I(inode)->ip_dyn_features & OCFS2_INLINE_DATA_FL)
+		return ocfs2_fill_new_dir_id(osb, handle, parent, inode, fe_bh);
+
+	return ocfs2_fill_new_dir_el(osb, handle, parent, inode, fe_bh,
+				     data_ac);
+}
+
+static void ocfs2_expand_last_dirent(char *start, unsigned int old_size,
+				     unsigned int new_size)
+{
+	struct ocfs2_dir_entry *de;
+	struct ocfs2_dir_entry *prev_de;
+	char *de_buf, *limit;
+	unsigned int bytes = new_size - old_size;
+
+	limit = start + old_size;
+	de_buf = start;
+	de = (struct ocfs2_dir_entry *)de_buf;
+	do {
+		prev_de = de;
+		de_buf += le16_to_cpu(de->rec_len);
+		de = (struct ocfs2_dir_entry *)de_buf;
+	} while (de_buf < limit);
+
+	le16_add_cpu(&prev_de->rec_len, bytes);
+}
+
+/*
+ * We allocate enough clusters to fulfill "blocks_wanted", but set
+ * i_size to exactly one block. Ocfs2_extend_dir() will handle the
+ * rest automatically for us.
+ *
+ * *first_block_bh is a pointer to the 1st data block allocated to the
+ *  directory.
+ */
+static int ocfs2_expand_inline_dir(struct inode *dir, struct buffer_head *di_bh,
+				   unsigned int blocks_wanted,
+				   struct buffer_head **first_block_bh)
+{
+	int ret, credits = OCFS2_INLINE_TO_EXTENTS_CREDITS;
+	u32 alloc, bit_off, len;
+	struct super_block *sb = dir->i_sb;
+	u64 blkno, bytes = blocks_wanted << sb->s_blocksize_bits;
+	struct ocfs2_super *osb = OCFS2_SB(dir->i_sb);
+	struct ocfs2_inode_info *oi = OCFS2_I(dir);
+	struct ocfs2_alloc_context *data_ac;
+	struct buffer_head *dirdata_bh = NULL;
+	struct ocfs2_dinode *di = (struct ocfs2_dinode *)di_bh->b_data;
+	handle_t *handle;
+
+	alloc = ocfs2_clusters_for_bytes(sb, bytes);
+
+	/*
+	 * We should never need more than 2 clusters for this -
+	 * maximum dirent size is far less than one block. In fact,
+	 * the only time we'd need more than one cluster is if
+	 * blocksize == clustersize and the dirent won't fit in the
+	 * extra space that the expansion to a single block gives. As
+	 * of today, that only happens on 4k/4k file systems.
+	 */
+	BUG_ON(alloc > 2);
+
+	ret = ocfs2_reserve_clusters(osb, alloc, &data_ac);
+	if (ret) {
+		mlog_errno(ret);
+		goto out;
+	}
+
+	down_write(&oi->ip_alloc_sem);
+
+	/*
+	 * Prepare for worst case allocation scenario of two seperate
+	 * extents.
+	 */
+	if (alloc == 2)
+		credits += OCFS2_SUBALLOC_ALLOC;
+
+	handle = ocfs2_start_trans(osb, credits);
+	if (IS_ERR(handle)) {
+		ret = PTR_ERR(handle);
+		mlog_errno(ret);
+		goto out_sem;
+	}
+
+	/*
+	 * Try to claim as many clusters as the bitmap can give though
+	 * if we only get one now, that's enough to continue. The rest
+	 * will be claimed after the conversion to extents.
+	 */
+	ret = ocfs2_claim_clusters(osb, handle, data_ac, 1, &bit_off, &len);
+	if (ret) {
+		mlog_errno(ret);
+		goto out_commit;
+	}
+
+	/*
+	 * Operations are carefully ordered so that we set up the new
+	 * data block first. The conversion from inline data to
+	 * extents follows.
+	 */
+	blkno = ocfs2_clusters_to_blocks(dir->i_sb, bit_off);
+	dirdata_bh = sb_getblk(sb, blkno);
+	if (!dirdata_bh) {
+		ret = -EIO;
+		mlog_errno(ret);
+		goto out_commit;
+	}
+
+	ocfs2_set_new_buffer_uptodate(dir, dirdata_bh);
+
+	ret = ocfs2_journal_access(handle, dir, dirdata_bh,
+				   OCFS2_JOURNAL_ACCESS_CREATE);
+	if (ret) {
+		mlog_errno(ret);
+		goto out_commit;
+	}
+
+	memcpy(dirdata_bh->b_data, di->id2.i_data.id_data, i_size_read(dir));
+	memset(dirdata_bh->b_data + i_size_read(dir), 0,
+	       sb->s_blocksize - i_size_read(dir));
+	ocfs2_expand_last_dirent(dirdata_bh->b_data, i_size_read(dir),
+				 sb->s_blocksize);
+
+	ret = ocfs2_journal_dirty(handle, dirdata_bh);
+	if (ret) {
+		mlog_errno(ret);
+		goto out_commit;
+	}
+
+	/*
+	 * Set extent, i_size, etc on the directory. After this, the
+	 * inode should contain the same exact dirents as before and
+	 * be fully accessible from system calls.
+	 *
+	 * We let the later dirent insert modify c/mtime - to the user
+	 * the data hasn't changed.
+	 */
+	ret = ocfs2_journal_access(handle, dir, di_bh,
+				   OCFS2_JOURNAL_ACCESS_CREATE);
+	if (ret) {
+		mlog_errno(ret);
+		goto out_commit;
+	}
+
+	spin_lock(&oi->ip_lock);
+	oi->ip_dyn_features &= ~OCFS2_INLINE_DATA_FL;
+	di->i_dyn_features = cpu_to_le16(oi->ip_dyn_features);
+	spin_unlock(&oi->ip_lock);
+
+	ocfs2_dinode_new_extent_list(dir, di);
+
+	i_size_write(dir, sb->s_blocksize);
+	dir->i_mtime = dir->i_ctime = CURRENT_TIME;
+
+	di->i_size = cpu_to_le64(sb->s_blocksize);
+	di->i_ctime = di->i_mtime = cpu_to_le64(dir->i_ctime.tv_sec);
+	di->i_ctime_nsec = di->i_mtime_nsec = cpu_to_le32(dir->i_ctime.tv_nsec);
+	dir->i_blocks = ocfs2_inode_sector_count(dir);
+
+	/*
+	 * This should never fail as our extent list is empty and all
+	 * related blocks have been journaled already.
+	 */
+	ret = ocfs2_insert_extent(osb, handle, dir, di_bh, 0, blkno, len, 0,
+				  NULL);
+	if (ret) {
+		mlog_errno(ret);
+		goto out;
+	}
+
+	ret = ocfs2_journal_dirty(handle, di_bh);
+	if (ret) {
+		mlog_errno(ret);
+		goto out_commit;
+	}
+
+	/*
+	 * We asked for two clusters, but only got one in the 1st
+	 * pass. Claim the 2nd cluster as a separate extent.
+	 */
+	if (alloc > len) {
+		ret = ocfs2_claim_clusters(osb, handle, data_ac, 1, &bit_off,
+					   &len);
+		if (ret) {
+			mlog_errno(ret);
+			goto out_commit;
+		}
+		blkno = ocfs2_clusters_to_blocks(dir->i_sb, bit_off);
+
+		ret = ocfs2_insert_extent(osb, handle, dir, di_bh, 1, blkno,
+					  len, 0, NULL);
+		if (ret) {
+			mlog_errno(ret);
+			goto out;
+		}
+	}
+
+	*first_block_bh = dirdata_bh;
+	dirdata_bh = NULL;
+
+out_commit:
+	ocfs2_commit_trans(osb, handle);
+
+out_sem:
+	up_write(&oi->ip_alloc_sem);
+
+out:
+	if (data_ac)
+		ocfs2_free_alloc_context(data_ac);
+
+	brelse(dirdata_bh);
+
+	return ret;
+}
+
 /* returns a bh of the 1st new block in the allocation. */
 static int ocfs2_do_extend_dir(struct super_block *sb,
 			       handle_t *handle,
@@ -1057,10 +1397,18 @@
 	return status;
 }
 
-/* assumes you already have a cluster lock on the directory. */
+/*
+ * Assumes you already have a cluster lock on the directory.
+ *
+ * 'blocks_wanted' is only used if we have an inline directory which
+ * is to be turned into an extent based one. The size of the dirent to
+ * insert might be larger than the space gained by growing to just one
+ * block, so we may have to grow the inode by two blocks in that case.
+ */
 static int ocfs2_extend_dir(struct ocfs2_super *osb,
 			    struct inode *dir,
 			    struct buffer_head *parent_fe_bh,
+			    unsigned int blocks_wanted,
 			    struct buffer_head **new_de_bh)
 {
 	int status = 0;
@@ -1076,6 +1424,38 @@
 
 	mlog_entry_void();
 
+	if (OCFS2_I(dir)->ip_dyn_features & OCFS2_INLINE_DATA_FL) {
+		status = ocfs2_expand_inline_dir(dir, parent_fe_bh,
+						 blocks_wanted, &new_bh);
+		if (status) {
+			mlog_errno(status);
+			goto bail;
+		}
+
+		if (blocks_wanted == 1) {
+			/*
+			 * If the new dirent will fit inside the space
+			 * created by pushing out to one block, then
+			 * we can complete the operation
+			 * here. Otherwise we have to expand i_size
+			 * and format the 2nd block below.
+			 */
+			BUG_ON(new_bh == NULL);
+			goto bail_bh;
+		}
+
+		/*
+		 * Get rid of 'new_bh' - we want to format the 2nd
+		 * data block and return that instead.
+		 */
+		brelse(new_bh);
+		new_bh = NULL;
+
+		dir_i_size = i_size_read(dir);
+		credits = OCFS2_SIMPLE_DIR_EXTEND_CREDITS;
+		goto do_extend;
+	}
+
 	dir_i_size = i_size_read(dir);
 	mlog(0, "extending dir %llu (i_size = %lld)\n",
 	     (unsigned long long)OCFS2_I(dir)->ip_blkno, dir_i_size);
@@ -1113,6 +1493,7 @@
 		credits = OCFS2_SIMPLE_DIR_EXTEND_CREDITS;
 	}
 
+do_extend:
 	down_write(&OCFS2_I(dir)->ip_alloc_sem);
 	drop_alloc_sem = 1;
 
@@ -1158,6 +1539,7 @@
 		goto bail;
 	}
 
+bail_bh:
 	*new_de_bh = new_bh;
 	get_bh(*new_de_bh);
 bail:
@@ -1178,42 +1560,72 @@
 	return status;
 }
 
-/*
- * Search the dir for a good spot, extending it if necessary. The
- * block containing an appropriate record is returned in ret_de_bh.
- */
-int ocfs2_prepare_dir_for_insert(struct ocfs2_super *osb,
-				 struct inode *dir,
-				 struct buffer_head *parent_fe_bh,
-				 const char *name,
-				 int namelen,
-				 struct buffer_head **ret_de_bh)
+static int ocfs2_find_dir_space_id(struct inode *dir, struct buffer_head *di_bh,
+				   const char *name, int namelen,
+				   struct buffer_head **ret_de_bh,
+				   unsigned int *blocks_wanted)
+{
+	int ret;
+	struct ocfs2_dinode *di = (struct ocfs2_dinode *)di_bh->b_data;
+	struct ocfs2_dir_entry *de, *last_de = NULL;
+	char *de_buf, *limit;
+	unsigned long offset = 0;
+	unsigned int rec_len, new_rec_len;
+
+	de_buf = di->id2.i_data.id_data;
+	limit = de_buf + i_size_read(dir);
+	rec_len = OCFS2_DIR_REC_LEN(namelen);
+
+	while (de_buf < limit) {
+		de = (struct ocfs2_dir_entry *)de_buf;
+
+		if (!ocfs2_check_dir_entry(dir, de, di_bh, offset)) {
+			ret = -ENOENT;
+			goto out;
+		}
+		if (ocfs2_match(namelen, name, de)) {
+			ret = -EEXIST;
+			goto out;
+		}
+		if (ocfs2_dirent_would_fit(de, rec_len)) {
+			/* Ok, we found a spot. Return this bh and let
+			 * the caller actually fill it in. */
+			*ret_de_bh = di_bh;
+			get_bh(*ret_de_bh);
+			ret = 0;
+			goto out;
+		}
+
+		last_de = de;
+		de_buf += le16_to_cpu(de->rec_len);
+		offset += le16_to_cpu(de->rec_len);
+	}
+
+	/*
+	 * We're going to require expansion of the directory - figure
+	 * out how many blocks we'll need so that a place for the
+	 * dirent can be found.
+	 */
+	*blocks_wanted = 1;
+	new_rec_len = le16_to_cpu(last_de->rec_len) + (dir->i_sb->s_blocksize - i_size_read(dir));
+	if (new_rec_len < (rec_len + OCFS2_DIR_REC_LEN(last_de->name_len)))
+		*blocks_wanted = 2;
+
+	ret = -ENOSPC;
+out:
+	return ret;
+}
+
+static int ocfs2_find_dir_space_el(struct inode *dir, const char *name,
+				   int namelen, struct buffer_head **ret_de_bh)
 {
 	unsigned long offset;
-	struct buffer_head * bh = NULL;
+	struct buffer_head *bh = NULL;
 	unsigned short rec_len;
-	struct ocfs2_dinode *fe;
 	struct ocfs2_dir_entry *de;
-	struct super_block *sb;
+	struct super_block *sb = dir->i_sb;
 	int status;
 
-	mlog_entry_void();
-
-	mlog(0, "getting ready to insert namelen %d into dir %llu\n",
-	     namelen, (unsigned long long)OCFS2_I(dir)->ip_blkno);
-
-	BUG_ON(!S_ISDIR(dir->i_mode));
-	fe = (struct ocfs2_dinode *) parent_fe_bh->b_data;
-	BUG_ON(le64_to_cpu(fe->i_size) != i_size_read(dir));
-
-	sb = dir->i_sb;
-
-	if (!namelen) {
-		status = -EINVAL;
-		mlog_errno(status);
-		goto bail;
-	}
-
 	bh = ocfs2_bread(dir, 0, &status, 0);
 	if (!bh) {
 		mlog_errno(status);
@@ -1229,17 +1641,11 @@
 			bh = NULL;
 
 			if (i_size_read(dir) <= offset) {
-				status = ocfs2_extend_dir(osb,
-							  dir,
-							  parent_fe_bh,
-							  &bh);
-				if (status < 0) {
-					mlog_errno(status);
-					goto bail;
-				}
-				BUG_ON(!bh);
-				*ret_de_bh = bh;
-				get_bh(*ret_de_bh);
+				/*
+				 * Caller will have to expand this
+				 * directory.
+				 */
+				status = -ENOSPC;
 				goto bail;
 			}
 			bh = ocfs2_bread(dir,
@@ -1281,3 +1687,61 @@
 	mlog_exit(status);
 	return status;
 }
+
+int ocfs2_prepare_dir_for_insert(struct ocfs2_super *osb,
+				 struct inode *dir,
+				 struct buffer_head *parent_fe_bh,
+				 const char *name,
+				 int namelen,
+				 struct buffer_head **ret_de_bh)
+{
+	int ret;
+	unsigned int blocks_wanted = 1;
+	struct buffer_head *bh = NULL;
+
+	mlog(0, "getting ready to insert namelen %d into dir %llu\n",
+	     namelen, (unsigned long long)OCFS2_I(dir)->ip_blkno);
+
+	*ret_de_bh = NULL;
+
+	if (!namelen) {
+		ret = -EINVAL;
+		mlog_errno(ret);
+		goto out;
+	}
+
+	if (OCFS2_I(dir)->ip_dyn_features & OCFS2_INLINE_DATA_FL) {
+		ret = ocfs2_find_dir_space_id(dir, parent_fe_bh, name,
+					      namelen, &bh, &blocks_wanted);
+	} else
+		ret = ocfs2_find_dir_space_el(dir, name, namelen, &bh);
+
+	if (ret && ret != -ENOSPC) {
+		mlog_errno(ret);
+		goto out;
+	}
+
+	if (ret == -ENOSPC) {
+		/*
+		 * We have to expand the directory to add this name.
+		 */
+		BUG_ON(bh);
+
+		ret = ocfs2_extend_dir(osb, dir, parent_fe_bh, blocks_wanted,
+				       &bh);
+		if (ret) {
+			if (ret != -ENOSPC)
+				mlog_errno(ret);
+			goto out;
+		}
+
+		BUG_ON(!bh);
+	}
+
+	*ret_de_bh = bh;
+	bh = NULL;
+out:
+	if (bh)
+		brelse(bh);
+	return ret;
+}
diff --git a/fs/ocfs2/namei.c b/fs/ocfs2/namei.c
index d2f0335..7292590 100644
--- a/fs/ocfs2/namei.c
+++ b/fs/ocfs2/namei.c
@@ -250,9 +250,8 @@
 		goto leave;
 	}
 
-	/* are we making a directory? If so, reserve a cluster for his
-	 * 1st extent. */
-	if (S_ISDIR(mode)) {
+	/* Reserve a cluster if creating an extent based directory. */
+	if (S_ISDIR(mode) && !ocfs2_supports_inline_data(osb)) {
 		status = ocfs2_reserve_clusters(osb, 1, &data_ac);
 		if (status < 0) {
 			if (status != -ENOSPC)
@@ -449,10 +448,21 @@
 		cpu_to_le32(CURRENT_TIME.tv_nsec);
 	fe->i_dtime = 0;
 
-	fel = &fe->id2.i_list;
-	fel->l_tree_depth = 0;
-	fel->l_next_free_rec = 0;
-	fel->l_count = cpu_to_le16(ocfs2_extent_recs_per_inode(osb->sb));
+	/*
+	 * If supported, directories start with inline data.
+	 */
+	if (S_ISDIR(mode) && ocfs2_supports_inline_data(osb)) {
+		u16 feat = le16_to_cpu(fe->i_dyn_features);
+
+		fe->i_dyn_features = cpu_to_le16(feat | OCFS2_INLINE_DATA_FL);
+
+		fe->id2.i_data.id_count = cpu_to_le16(ocfs2_max_inline_data(osb->sb));
+	} else {
+		fel = &fe->id2.i_list;
+		fel->l_tree_depth = 0;
+		fel->l_next_free_rec = 0;
+		fel->l_count = cpu_to_le16(ocfs2_extent_recs_per_inode(osb->sb));
+	}
 
 	status = ocfs2_journal_dirty(handle, *new_fe_bh);
 	if (status < 0) {
@@ -950,7 +960,7 @@
 	struct buffer_head *old_inode_bh = NULL;
 	struct buffer_head *insert_entry_bh = NULL;
 	struct ocfs2_super *osb = NULL;
-	u64 newfe_blkno;
+	u64 newfe_blkno, old_de_ino;
 	handle_t *handle = NULL;
 	struct buffer_head *old_dir_bh = NULL;
 	struct buffer_head *new_dir_bh = NULL;
@@ -1061,12 +1071,13 @@
 		}
 	}
 
-	status = -ENOENT;
-	old_de_bh = ocfs2_find_entry(old_dentry->d_name.name,
-				     old_dentry->d_name.len,
-				     old_dir, &old_de);
-	if (!old_de_bh)
+	status = ocfs2_lookup_ino_from_name(old_dir, old_dentry->d_name.name,
+					    old_dentry->d_name.len,
+					    &old_de_ino);
+	if (status) {
+		status = -ENOENT;
 		goto bail;
+	}
 
 	/*
 	 *  Check for inode number is _not_ due to possible IO errors.
@@ -1074,8 +1085,10 @@
 	 *  and merrily kill the link to whatever was created under the
 	 *  same name. Goodbye sticky bit ;-<
 	 */
-	if (le64_to_cpu(old_de->inode) != OCFS2_I(old_inode)->ip_blkno)
+	if (old_de_ino != OCFS2_I(old_inode)->ip_blkno) {
+		status = -ENOENT;
 		goto bail;
+	}
 
 	/* check if the target already exists (in which case we need
 	 * to delete it */
@@ -1250,7 +1263,21 @@
 	} else
 		mlog_errno(status);
 
-	/* now that the name has been added to new_dir, remove the old name */
+	/*
+	 * Now that the name has been added to new_dir, remove the old name.
+	 *
+	 * We don't keep any directory entry context around until now
+	 * because the insert might have changed the type of directory
+	 * we're dealing with.
+	 */
+	old_de_bh = ocfs2_find_entry(old_dentry->d_name.name,
+				     old_dentry->d_name.len,
+				     old_dir, &old_de);
+	if (!old_de_bh) {
+		status = -EIO;
+		goto bail;
+	}
+
 	status = ocfs2_delete_entry(handle, old_dir, old_de, old_de_bh);
 	if (status < 0) {
 		mlog_errno(status);