diff --git a/pkgs/racket-pkgs/racket-test/tests/racket/file.rktl b/pkgs/racket-pkgs/racket-test/tests/racket/file.rktl
index 35a4946a40..1fc532c0d0 100644
--- a/pkgs/racket-pkgs/racket-test/tests/racket/file.rktl
+++ b/pkgs/racket-pkgs/racket-test/tests/racket/file.rktl
@@ -1682,6 +1682,75 @@
     (err/rt-test (udp-connect! early-udp "localhost" 40000)  (net-reject? 'udp-connect! "localhost" 40000 'client))
     (err/rt-test (udp-send-to early-udp "localhost" 40000 #"hi")  (net-reject? 'udp-send-to "localhost" 40000 'client))))
 
+;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
+;; Check `in-directory'
+
+(let ([tmp-dir (make-temporary-file "rktindir~a" 'directory)])
+  (define (touch p) (call-with-output-file* p #:exists 'can-update void))
+  (make-directory (build-path tmp-dir "a"))
+  (touch (build-path tmp-dir "a" "alpha"))
+  (touch (build-path tmp-dir "a" "apple"))
+  (make-directory (build-path tmp-dir "b"))
+  (touch (build-path tmp-dir "b" "beta"))
+  (make-directory (build-path tmp-dir "c"))
+  (define paths (list (build-path "a")
+                      (build-path "a" "alpha")
+                      (build-path "a" "apple")
+                      (build-path "b")
+                      (build-path "b" "beta")
+                      (build-path "c")))
+  (let ([ht (for/hash ([p (in-list paths)]) (values p #t))])
+    (test ht
+          'in-dir/no-arg
+          (parameterize ([current-directory tmp-dir])
+            (for/hash ([f (in-directory)])
+              (values f #t))))
+    (define (mk) (in-directory))
+    (test ht
+          'in-dir/no-arg/outline
+          (parameterize ([current-directory tmp-dir])
+            (for/hash ([f (mk)])
+              (values f #t)))))
+  (let ([ht (for/hash ([p (in-list paths)]) (values (build-path tmp-dir p) #t))])
+    (test ht
+          'in-dir/full
+          (for/hash ([f (in-directory tmp-dir)])
+            (values f #t)))
+    (define (mk) (in-directory tmp-dir))
+    (test ht
+          'in-dir/full/outline
+          (for/hash ([f (mk)])
+            (values f #t))))
+  (define-values (dir-parent dir-name dir?) (split-path tmp-dir))
+  (let ([ht (for/hash ([p (in-list paths)]) (values (build-path dir-name p) #t))])
+    (test ht
+          'in-dir/relative
+          (parameterize ([current-directory dir-parent])
+            (for/hash ([f (in-directory dir-name)])
+              (values f #t))))
+    (define (mk) (in-directory dir-name))
+    (test ht
+          'in-dir/relative/outline
+          (parameterize ([current-directory dir-parent])
+            (for/hash ([f (mk)])
+              (values f #t)))))
+  (let ([ht (hash-remove (for/hash ([p (in-list paths)]) (values p #t))
+                         (build-path "b" "beta"))])
+    (define (not-b? p)
+      (not (equal? p (build-path tmp-dir "b"))))
+    (test ht
+          'in-dir/skip-b
+          (parameterize ([current-directory tmp-dir])
+            (for/hash ([f (in-directory #f not-b?)])
+              (values f #t))))
+    (define (mk) (in-directory #f not-b?))
+    (test ht
+          'in-dir/skip-b/outline
+          (parameterize ([current-directory tmp-dir])
+            (for/hash ([f (mk)])
+              (values f #t)))))
+  (delete-directory/files tmp-dir))
+
 ;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
 ;; Check that `in-directory' fails properly on filesystem errors
 
diff --git a/racket/collects/racket/private/for.rkt b/racket/collects/racket/private/for.rkt
index ba64270b9c..9dd9c6de2e 100644
--- a/racket/collects/racket/private/for.rkt
+++ b/racket/collects/racket/private/for.rkt
@@ -1962,7 +1962,7 @@
   (define *in-directory
     (case-lambda 
      [() (*in-directory #f (lambda (d) #t))]
-     [(orig-dir) (*in-directory #f (lambda (d) #t))]
+     [(orig-dir) (*in-directory orig-dir (lambda (d) #t))]
      [(orig-dir use-dir?)
       (define init-dir (current-directory))
       ;; current state of the sequence is a list of paths to produce; when