diff --git a/usr.sbin/adduser/adduser.8 b/usr.sbin/adduser/adduser.8
--- a/usr.sbin/adduser/adduser.8
+++ b/usr.sbin/adduser/adduser.8
@@ -24,7 +24,7 @@
 .\" OUT OF THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF
 .\" SUCH DAMAGE.
 .\"
-.Dd April 11, 2024
+.Dd August 27, 2024
 .Dt ADDUSER 8
 .Os
 .Sh NAME
@@ -243,7 +243,9 @@
 script.
 .It Fl M Ar mode
 Create the home directory with permissions set to
-.Ar mode .
+.Ar mode ,
+modified by the current
+.Xr umask 2 .
 .It Fl N
 Do not read the default configuration file.
 .It Fl q
diff --git a/usr.sbin/pw/cpdir.c b/usr.sbin/pw/cpdir.c
--- a/usr.sbin/pw/cpdir.c
+++ b/usr.sbin/pw/cpdir.c
@@ -49,9 +49,19 @@
 	if (*dir == '/')
 		dir++;
 
-	if (mkdirat(rootfd, dir, mode) != 0 && errno != EEXIST) {
-		warn("mkdir(%s)", dir);
-		return;
+	if (mkdirat(rootfd, dir, mode) != 0) {
+		mode_t pumask;
+
+		if (errno != EEXIST) {
+			warn("mkdir(%s)", dir);
+			return;
+		}
+
+		pumask = umask(0);
+		umask(pumask);
+
+		(void)fchmodat(rootfd, dir, mode & ~pumask,
+		    AT_SYMLINK_NOFOLLOW);
 	}
 	fchownat(rootfd, dir, uid, gid, AT_SYMLINK_NOFOLLOW);
 	if (flags > 0)
diff --git a/usr.sbin/pw/tests/pw_useradd_test.sh b/usr.sbin/pw/tests/pw_useradd_test.sh
--- a/usr.sbin/pw/tests/pw_useradd_test.sh
+++ b/usr.sbin/pw/tests/pw_useradd_test.sh
@@ -329,6 +329,21 @@
 	    stat -f '%p' ${HOME}/home/foo
 }
 
+atf_test_case user_add_existing_dir
+user_add_existing_dir_body() {
+	populate_root_etc_skel
+
+	mkdir -p -m 0777 ${HOME}/home/foo
+	atf_check -o inline:"40777\n" \
+	    stat -f '%p' ${HOME}/home/foo
+
+	atf_check -s exit:0 ${RPW} useradd foo -M 0705 -m
+	atf_check grep -q '^foo:' $HOME/etc/master.passwd
+	atf_check test -d ${HOME}/home/foo
+	atf_check -o inline:"40705\n" \
+	    stat -f '%p' ${HOME}/home/foo
+}
+
 atf_test_case user_add_skel
 user_add_skel_body() {
 	populate_root_etc_skel
@@ -528,6 +543,7 @@
 	atf_add_test_case user_add_R_no_symlink
 	atf_add_test_case user_add_R_intermed
 	atf_add_test_case user_add_dir
+	atf_add_test_case user_add_existing_dir
 	atf_add_test_case user_add_skel
 	atf_add_test_case user_add_uid0
 	atf_add_test_case user_add_uid_too_large