diff --git a/configure.ac b/configure.ac
index 1715b9d0e..ebce007a6 100644
--- a/configure.ac
+++ b/configure.ac
@@ -253,6 +253,7 @@ AC_CONFIG_FILES([
 	tests/zfs-tests/tests/functional/cli_user/zpool_iostat/Makefile
 	tests/zfs-tests/tests/functional/cli_user/zpool_list/Makefile
 	tests/zfs-tests/tests/functional/compression/Makefile
+	tests/zfs-tests/tests/functional/cp_files/Makefile
 	tests/zfs-tests/tests/functional/ctime/Makefile
 	tests/zfs-tests/tests/functional/deadman/Makefile
 	tests/zfs-tests/tests/functional/delegate/Makefile
diff --git a/include/sys/zap_leaf.h b/include/sys/zap_leaf.h
index e784c5963..a3da1036a 100644
--- a/include/sys/zap_leaf.h
+++ b/include/sys/zap_leaf.h
@@ -46,10 +46,15 @@ struct zap_stats;
  * block size (1<<l->l_bs) - hash entry size (2) * number of hash
  * entries - header space (2*chunksize)
  */
-#define	ZAP_LEAF_NUMCHUNKS(l) \
-	(((1<<(l)->l_bs) - 2*ZAP_LEAF_HASH_NUMENTRIES(l)) / \
+#define	ZAP_LEAF_NUMCHUNKS_BS(bs) \
+	(((1<<(bs)) - 2*ZAP_LEAF_HASH_NUMENTRIES_BS(bs)) / \
 	ZAP_LEAF_CHUNKSIZE - 2)
 
+#define	ZAP_LEAF_NUMCHUNKS(l) (ZAP_LEAF_NUMCHUNKS_BS(((l)->l_bs)))
+
+#define	ZAP_LEAF_NUMCHUNKS_DEF \
+	(ZAP_LEAF_NUMCHUNKS_BS(fzap_default_block_shift))
+
 /*
  * The amount of space within the chunk available for the array is:
  * chunk size - space for type (1) - space for next pointer (2)
@@ -74,8 +79,10 @@ struct zap_stats;
  * which is less than block size / CHUNKSIZE (24) / minimum number of
  * chunks per entry (3).
  */
-#define	ZAP_LEAF_HASH_SHIFT(l) ((l)->l_bs - 5)
-#define	ZAP_LEAF_HASH_NUMENTRIES(l) (1 << ZAP_LEAF_HASH_SHIFT(l))
+#define	ZAP_LEAF_HASH_SHIFT_BS(bs) ((bs) - 5)
+#define	ZAP_LEAF_HASH_NUMENTRIES_BS(bs) (1 << ZAP_LEAF_HASH_SHIFT_BS(bs))
+#define	ZAP_LEAF_HASH_SHIFT(l) (ZAP_LEAF_HASH_SHIFT_BS(((l)->l_bs)))
+#define	ZAP_LEAF_HASH_NUMENTRIES(l) (ZAP_LEAF_HASH_NUMENTRIES_BS(((l)->l_bs)))
 
 /*
  * The chunks start immediately after the hash table.  The end of the
diff --git a/module/zfs/zap.c b/module/zfs/zap.c
index 2f6aed667..d899ccdb7 100644
--- a/module/zfs/zap.c
+++ b/module/zfs/zap.c
@@ -852,8 +852,16 @@ retry:
 	} else if (err == EAGAIN) {
 		err = zap_expand_leaf(zn, l, tag, tx, &l);
 		zap = zn->zn_zap;	/* zap_expand_leaf() may change zap */
-		if (err == 0)
+		if (err == 0) {
 			goto retry;
+		} else if (err == ENOSPC) {
+			/*
+			 * If we failed to expand the leaf, then bailout
+			 * as there is no point trying
+			 * zap_put_leaf_maybe_grow_ptrtbl().
+			 */
+			return (err);
+		}
 	}
 
 out:
diff --git a/module/zfs/zap_leaf.c b/module/zfs/zap_leaf.c
index 5341fc098..661fd747b 100644
--- a/module/zfs/zap_leaf.c
+++ b/module/zfs/zap_leaf.c
@@ -53,7 +53,7 @@ static uint16_t *zap_leaf_rehash_entry(zap_leaf_t *l, uint16_t entry);
 	((h) >> \
 	(64 - ZAP_LEAF_HASH_SHIFT(l) - zap_leaf_phys(l)->l_hdr.lh_prefix_len)))
 
-#define	LEAF_HASH_ENTPTR(l, h) (&zap_leaf_phys(l)->l_hash[LEAF_HASH(l, h)])
+#define	LEAF_HASH_ENTPTR(l, h)	(&zap_leaf_phys(l)->l_hash[LEAF_HASH(l, h)])
 
 extern inline zap_leaf_phys_t *zap_leaf_phys(zap_leaf_t *l);
 
diff --git a/module/zfs/zap_micro.c b/module/zfs/zap_micro.c
index b81a48a0f..791cbee88 100644
--- a/module/zfs/zap_micro.c
+++ b/module/zfs/zap_micro.c
@@ -363,6 +363,41 @@ mze_find_unused_cd(zap_t *zap, uint64_t hash)
 	return (cd);
 }
 
+/*
+ * Each mzap entry requires at max : 4 chunks
+ * 3 chunks for names + 1 chunk for value.
+ */
+#define	MZAP_ENT_CHUNKS	(1 + ZAP_LEAF_ARRAY_NCHUNKS(MZAP_NAME_LEN) + \
+	ZAP_LEAF_ARRAY_NCHUNKS(sizeof (uint64_t)))
+
+/*
+ * Check if the current entry keeps the colliding entries under the fatzap leaf
+ * size.
+ */
+static boolean_t
+mze_canfit_fzap_leaf(zap_name_t *zn, uint64_t hash)
+{
+	zap_t *zap = zn->zn_zap;
+	mzap_ent_t mze_tofind;
+	mzap_ent_t *mze;
+	avl_index_t idx;
+	avl_tree_t *avl = &zap->zap_m.zap_avl;
+	uint32_t mzap_ents = 0;
+
+	mze_tofind.mze_hash = hash;
+	mze_tofind.mze_cd = 0;
+
+	for (mze = avl_find(avl, &mze_tofind, &idx);
+	    mze && mze->mze_hash == hash; mze = AVL_NEXT(avl, mze)) {
+		mzap_ents++;
+	}
+
+	/* Include the new entry being added */
+	mzap_ents++;
+
+	return (ZAP_LEAF_NUMCHUNKS_DEF > (mzap_ents * MZAP_ENT_CHUNKS));
+}
+
 static void
 mze_remove(zap_t *zap, mzap_ent_t *mze)
 {
@@ -638,16 +673,15 @@ mzap_upgrade(zap_t **zapp, void *tag, dmu_tx_t *tx, zap_flags_t flags)
 		dprintf("adding %s=%llu\n",
 		    mze->mze_name, mze->mze_value);
 		zn = zap_name_alloc(zap, mze->mze_name, 0);
-		err = fzap_add_cd(zn, 8, 1, &mze->mze_value, mze->mze_cd,
-		    tag, tx);
+		/* If we fail here, we would end up losing entries */
+		VERIFY0(fzap_add_cd(zn, 8, 1, &mze->mze_value, mze->mze_cd,
+		    tag, tx));
 		zap = zn->zn_zap;	/* fzap_add_cd() may change zap */
 		zap_name_free(zn);
-		if (err)
-			break;
 	}
 	vmem_free(mzp, sz);
 	*zapp = zap;
-	return (err);
+	return (0);
 }
 
 /*
@@ -1190,7 +1224,8 @@ zap_add_impl(zap_t *zap, const char *key,
 		err = fzap_add(zn, integer_size, num_integers, val, tag, tx);
 		zap = zn->zn_zap;	/* fzap_add() may change zap */
 	} else if (integer_size != 8 || num_integers != 1 ||
-	    strlen(key) >= MZAP_NAME_LEN) {
+	    strlen(key) >= MZAP_NAME_LEN ||
+	    !mze_canfit_fzap_leaf(zn, zn->zn_hash)) {
 		err = mzap_upgrade(&zn->zn_zap, tag, tx, 0);
 		if (err == 0) {
 			err = fzap_add(zn, integer_size, num_integers, val,
diff --git a/module/zfs/zfs_dir.c b/module/zfs/zfs_dir.c
index 76f79cc11..7eb426b78 100644
--- a/module/zfs/zfs_dir.c
+++ b/module/zfs/zfs_dir.c
@@ -742,7 +742,11 @@ zfs_dirent(znode_t *zp, uint64_t mode)
 }
 
 /*
- * Link zp into dl.  Can only fail if zp has been unlinked.
+ * Link zp into dl.  Can fail in the following cases :
+ * - if zp has been unlinked.
+ * - if the number of entries with the same hash (aka. colliding entries)
+ *    exceed the capacity of a leaf-block of fatzap and splitting of the
+ *    leaf-block does not help.
  */
 int
 zfs_link_create(zfs_dirlock_t *dl, znode_t *zp, dmu_tx_t *tx, int flag)
@@ -776,6 +780,24 @@ zfs_link_create(zfs_dirlock_t *dl, znode_t *zp, dmu_tx_t *tx, int flag)
 			    NULL, &links, sizeof (links));
 		}
 	}
+
+	value = zfs_dirent(zp, zp->z_mode);
+	error = zap_add(ZTOZSB(zp)->z_os, dzp->z_id, dl->dl_name, 8, 1,
+	    &value, tx);
+
+	/*
+	 * zap_add could fail to add the entry if it exceeds the capacity of the
+	 * leaf-block and zap_leaf_split() failed to help.
+	 * The caller of this routine is responsible for failing the transaction
+	 * which will rollback the SA updates done above.
+	 */
+	if (error != 0) {
+		if (!(flag & ZRENAMING) && !(flag & ZNEW))
+			drop_nlink(ZTOI(zp));
+		mutex_exit(&zp->z_lock);
+		return (error);
+	}
+
 	SA_ADD_BULK_ATTR(bulk, count, SA_ZPL_PARENT(zfsvfs), NULL,
 	    &dzp->z_id, sizeof (dzp->z_id));
 	SA_ADD_BULK_ATTR(bulk, count, SA_ZPL_FLAGS(zfsvfs), NULL,
@@ -813,11 +835,6 @@ zfs_link_create(zfs_dirlock_t *dl, znode_t *zp, dmu_tx_t *tx, int flag)
 	ASSERT(error == 0);
 	mutex_exit(&dzp->z_lock);
 
-	value = zfs_dirent(zp, zp->z_mode);
-	error = zap_add(ZTOZSB(zp)->z_os, dzp->z_id, dl->dl_name,
-	    8, 1, &value, tx);
-	ASSERT(error == 0);
-
 	return (0);
 }
 
diff --git a/module/zfs/zfs_vnops.c b/module/zfs/zfs_vnops.c
index f7f2f6167..0eeb2bb42 100644
--- a/module/zfs/zfs_vnops.c
+++ b/module/zfs/zfs_vnops.c
@@ -1450,6 +1450,7 @@ top:
 			dmu_tx_hold_write(tx, DMU_NEW_OBJECT,
 			    0, acl_ids.z_aclp->z_acl_bytes);
 		}
+
 		error = dmu_tx_assign(tx,
 		    (waited ? TXG_NOTHROTTLE : 0) | TXG_NOWAIT);
 		if (error) {
@@ -1467,10 +1468,22 @@ top:
 		}
 		zfs_mknode(dzp, vap, tx, cr, 0, &zp, &acl_ids);
 
+		error = zfs_link_create(dl, zp, tx, ZNEW);
+		if (error != 0) {
+			/*
+			 * Since, we failed to add the directory entry for it,
+			 * delete the newly created dnode.
+			 */
+			zfs_znode_delete(zp, tx);
+			remove_inode_hash(ZTOI(zp));
+			zfs_acl_ids_free(&acl_ids);
+			dmu_tx_commit(tx);
+			goto out;
+		}
+
 		if (fuid_dirtied)
 			zfs_fuid_sync(zfsvfs, tx);
 
-		(void) zfs_link_create(dl, zp, tx, ZNEW);
 		txtype = zfs_log_create_txtype(Z_FILE, vsecp, vap);
 		if (flag & FIGNORECASE)
 			txtype |= TX_CI;
@@ -2064,13 +2077,18 @@ top:
 	 */
 	zfs_mknode(dzp, vap, tx, cr, 0, &zp, &acl_ids);
 
-	if (fuid_dirtied)
-		zfs_fuid_sync(zfsvfs, tx);
-
 	/*
 	 * Now put new name in parent dir.
 	 */
-	(void) zfs_link_create(dl, zp, tx, ZNEW);
+	error = zfs_link_create(dl, zp, tx, ZNEW);
+	if (error != 0) {
+		zfs_znode_delete(zp, tx);
+		remove_inode_hash(ZTOI(zp));
+		goto out;
+	}
+
+	if (fuid_dirtied)
+		zfs_fuid_sync(zfsvfs, tx);
 
 	*ipp = ZTOI(zp);
 
@@ -2080,6 +2098,7 @@ top:
 	zfs_log_create(zilog, tx, txtype, dzp, zp, dirname, vsecp,
 	    acl_ids.z_fuidp, vap);
 
+out:
 	zfs_acl_ids_free(&acl_ids);
 
 	dmu_tx_commit(tx);
@@ -2089,10 +2108,14 @@ top:
 	if (zfsvfs->z_os->os_sync == ZFS_SYNC_ALWAYS)
 		zil_commit(zilog, 0);
 
-	zfs_inode_update(dzp);
-	zfs_inode_update(zp);
+	if (error != 0) {
+		iput(ZTOI(zp));
+	} else {
+		zfs_inode_update(dzp);
+		zfs_inode_update(zp);
+	}
 	ZFS_EXIT(zfsvfs);
-	return (0);
+	return (error);
 }
 
 /*
@@ -3950,6 +3973,13 @@ top:
 				VERIFY3U(zfs_link_destroy(tdl, szp, tx,
 				    ZRENAMING, NULL), ==, 0);
 			}
+		} else {
+			/*
+			 * If we had removed the existing target, subsequent
+			 * call to zfs_link_create() to add back the same entry
+			 * but, the new dnode (szp) should not fail.
+			 */
+			ASSERT(tzp == NULL);
 		}
 	}
 
@@ -4120,14 +4150,18 @@ top:
 	/*
 	 * Insert the new object into the directory.
 	 */
-	(void) zfs_link_create(dl, zp, tx, ZNEW);
+	error = zfs_link_create(dl, zp, tx, ZNEW);
+	if (error != 0) {
+		zfs_znode_delete(zp, tx);
+		remove_inode_hash(ZTOI(zp));
+	} else {
+		if (flags & FIGNORECASE)
+			txtype |= TX_CI;
+		zfs_log_symlink(zilog, tx, txtype, dzp, zp, name, link);
 
-	if (flags & FIGNORECASE)
-		txtype |= TX_CI;
-	zfs_log_symlink(zilog, tx, txtype, dzp, zp, name, link);
-
-	zfs_inode_update(dzp);
-	zfs_inode_update(zp);
+		zfs_inode_update(dzp);
+		zfs_inode_update(zp);
+	}
 
 	zfs_acl_ids_free(&acl_ids);
 
@@ -4135,10 +4169,14 @@ top:
 
 	zfs_dirent_unlock(dl);
 
-	*ipp = ZTOI(zp);
+	if (error == 0) {
+		*ipp = ZTOI(zp);
 
-	if (zfsvfs->z_os->os_sync == ZFS_SYNC_ALWAYS)
-		zil_commit(zilog, 0);
+		if (zfsvfs->z_os->os_sync == ZFS_SYNC_ALWAYS)
+			zil_commit(zilog, 0);
+	} else {
+		iput(ZTOI(zp));
+	}
 
 	ZFS_EXIT(zfsvfs);
 	return (error);
diff --git a/tests/runfiles/linux.run b/tests/runfiles/linux.run
index 7b51ef47b..7e4a5a7c3 100644
--- a/tests/runfiles/linux.run
+++ b/tests/runfiles/linux.run
@@ -59,7 +59,7 @@ tags = ['functional', 'cachefile']
 # 'mixed_none_lookup', 'mixed_none_lookup_ci', 'mixed_none_delete',
 # 'mixed_formd_lookup', 'mixed_formd_lookup_ci', 'mixed_formd_delete']
 [tests/functional/casenorm]
-tests = ['case_all_values', 'norm_all_values']
+tests = ['case_all_values', 'norm_all_values', 'mixed_create_failure']
 tags = ['functional', 'casenorm']
 
 [tests/functional/channel_program/lua_core]
@@ -475,6 +475,10 @@ tests = ['compress_001_pos', 'compress_002_pos', 'compress_003_pos',
     'compress_004_pos']
 tags = ['functional', 'compression']
 
+[tests/functional/cp_files]
+tests = ['cp_files_001_pos']
+tags = ['functional', 'cp_files']
+
 [tests/functional/ctime]
 tests = ['ctime_001_pos' ]
 tags = ['functional', 'ctime']
diff --git a/tests/zfs-tests/tests/functional/Makefile.am b/tests/zfs-tests/tests/functional/Makefile.am
index a5bbb36e0..6388f2d0f 100644
--- a/tests/zfs-tests/tests/functional/Makefile.am
+++ b/tests/zfs-tests/tests/functional/Makefile.am
@@ -13,6 +13,7 @@ SUBDIRS = \
 	cli_root \
 	cli_user \
 	compression \
+	cp_files \
 	ctime \
 	deadman \
 	delegate \
diff --git a/tests/zfs-tests/tests/functional/casenorm/Makefile.am b/tests/zfs-tests/tests/functional/casenorm/Makefile.am
index 65dd156e7..b284a2560 100644
--- a/tests/zfs-tests/tests/functional/casenorm/Makefile.am
+++ b/tests/zfs-tests/tests/functional/casenorm/Makefile.am
@@ -7,6 +7,7 @@ dist_pkgdata_SCRIPTS = \
 	insensitive_formd_lookup.ksh \
 	insensitive_none_delete.ksh \
 	insensitive_none_lookup.ksh \
+	mixed_create_failure.ksh \
 	mixed_formd_delete.ksh \
 	mixed_formd_lookup_ci.ksh \
 	mixed_formd_lookup.ksh \
diff --git a/tests/zfs-tests/tests/functional/casenorm/mixed_create_failure.ksh b/tests/zfs-tests/tests/functional/casenorm/mixed_create_failure.ksh
new file mode 100755
index 000000000..51b5bb3f6
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/casenorm/mixed_create_failure.ksh
@@ -0,0 +1,136 @@
+#!/bin/ksh -p
+#
+#
+# This file and its contents are supplied under the terms of the
+# Common Development and Distribution License ("CDDL"), version 1.0.
+# You may only use this file in accordance with the terms of version
+# 1.0 of the CDDL.
+#
+# A full copy of the text of the CDDL should have accompanied this
+# source.  A copy of the CDDL is also available via the Internet at
+# http://www.illumos.org/license/CDDL.
+#
+#
+# Copyright 2018 Nutanix Inc.  All rights reserved.
+#
+
+. $STF_SUITE/tests/functional/casenorm/casenorm.kshlib
+
+# DESCRIPTION:
+# For the filesystem with casesensitivity=mixed, normalization=none,
+# when multiple files with the same name (differing only in case) are created,
+# the number of files is limited to what can fit in a fatzap leaf-block.
+# And beyond that, it fails with ENOSPC.
+#
+# Ensure that the create/rename operations fail gracefully and not trigger an
+# ASSERT.
+#
+# STRATEGY:
+# Repeat the below steps for objects: files, directories, symlinks and hardlinks
+# 1. Create objects with same name but varying in case.
+#    E.g. 'abcdefghijklmnop', 'Abcdefghijklmnop', 'ABcdefghijklmnop' etc.
+#    The create should fail with ENOSPC.
+# 2. Create an object with name 'tmp_obj' and try to rename it to name that we
+#    failed to add in step 1 above.
+#    This should fail as well.
+
+verify_runnable "global"
+
+function cleanup
+{
+        destroy_testfs
+}
+
+log_onexit cleanup
+log_assert "With mixed mode: ensure create fails with ENOSPC beyond a certain limit"
+
+create_testfs "-o casesensitivity=mixed -o normalization=none"
+
+# Different object types
+obj_type=('file' 'dir' 'symlink' 'hardlink')
+
+# Commands to create different object types
+typeset -A ops
+ops['file']='touch'
+ops['dir']='mkdir'
+ops['symlink']='ln -s'
+ops['hardlink']='ln'
+
+# This function tests the following for a give object type :
+# - Create multiple objects with the same name (varying only in case).
+#   Ensure that it eventually fails once the leaf-block limit is exceeded.
+# - Create another object with a different name. And attempt rename it to the
+#   name (for which the create had failed in the previous step).
+#   This should fail as well.
+# Args :
+#   $1 - object type (file/dir/symlink/hardlink)
+#   $2 - test directory
+#
+function test_ops
+{
+	typeset obj_type=$1
+	typeset testdir=$2
+
+	target_obj='target-file'
+
+	op="${ops[$obj_type]}"
+
+	log_note "The op : $op"
+	log_note "testdir=$testdir obj_type=$obj_type"
+
+	test_path="$testdir/$obj_type"
+	mkdir $test_path
+	log_note "Created test dir $test_path"
+
+	if [[ $obj_type = "symlink" || $obj_type = "hardlink" ]]; then
+		touch $test_path/$target_obj
+		log_note "Created target: $test_path/$target_obj"
+		op="$op $test_path/$target_obj"
+	fi
+
+	log_note "op : $op"
+	names='{a,A}{b,B}{c,C}{d,D}{e,E}{f,F}{g,G}{h,H}{i,I}{j,J}{k,K}{l,L}'
+	for name in $names; do
+		cmd="$op $test_path/$name"
+		out=$($cmd 2>&1)
+		ret=$?
+		log_note "cmd: $cmd ret: $ret out=$out"
+		if (($ret != 0)); then
+			if [[ $out = *@(No space left on device)* ]]; then
+				save_name="$test_path/$name"
+				break;
+			else
+				log_err "$cmd failed with unexpected error : $out"
+			fi
+		fi
+	done
+
+	log_note 'Test rename \"sample_name\" rename'
+	TMP_OBJ="$test_path/tmp_obj"
+	cmd="$op $TMP_OBJ"
+	out=$($cmd 2>&1)
+	ret=$?
+	if (($ret != 0)); then
+		log_err "cmd:$cmd failed out:$out"
+	fi
+
+	# Now, try to rename the tmp_obj to the name which we failed to add earlier.
+	# This should fail as well.
+	out=$(mv $TMP_OBJ $save_name 2>&1)
+	ret=$?
+	if (($ret != 0)); then
+		if [[ $out = *@(No space left on device)* ]]; then
+			log_note "$cmd failed as expected : $out"
+		else
+			log_err "$cmd failed with : $out"
+		fi
+	fi
+}
+
+for obj_type in ${obj_type[*]};
+do
+	log_note "Testing create of $obj_type"
+	test_ops $obj_type $TESTDIR
+done
+
+log_pass "Mixed mode FS: Ops on large number of colliding names fail gracefully"
diff --git a/tests/zfs-tests/tests/functional/cp_files/.gitignore b/tests/zfs-tests/tests/functional/cp_files/.gitignore
new file mode 100644
index 000000000..eac05e155
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/cp_files/.gitignore
@@ -0,0 +1 @@
+/cp_files
diff --git a/tests/zfs-tests/tests/functional/cp_files/Makefile.am b/tests/zfs-tests/tests/functional/cp_files/Makefile.am
new file mode 100644
index 000000000..06c31f5f3
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/cp_files/Makefile.am
@@ -0,0 +1,13 @@
+include $(top_srcdir)/config/Rules.am
+
+pkgdatadir = $(datadir)/@PACKAGE@/zfs-tests/tests/functional/cp_files
+
+dist_pkgdata_SCRIPTS = \
+	cp_files_001_pos.ksh \
+	cleanup.ksh \
+	setup.ksh
+
+pkgexecdir = $(datadir)/@PACKAGE@/zfs-tests/tests/functional/cp_files
+
+pkgexec_PROGRAMS = cp_files
+cp_files_SOURCES= cp_files.c
diff --git a/tests/zfs-tests/tests/functional/cp_files/cleanup.ksh b/tests/zfs-tests/tests/functional/cp_files/cleanup.ksh
new file mode 100755
index 000000000..3166bd6ec
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/cp_files/cleanup.ksh
@@ -0,0 +1,34 @@
+#!/bin/ksh -p
+#
+# CDDL HEADER START
+#
+# The contents of this file are subject to the terms of the
+# Common Development and Distribution License (the "License").
+# You may not use this file except in compliance with the License.
+#
+# You can obtain a copy of the license at usr/src/OPENSOLARIS.LICENSE
+# or http://www.opensolaris.org/os/licensing.
+# See the License for the specific language governing permissions
+# and limitations under the License.
+#
+# When distributing Covered Code, include this CDDL HEADER in each
+# file and include the License file at usr/src/OPENSOLARIS.LICENSE.
+# If applicable, add the following below this CDDL HEADER, with the
+# fields enclosed by brackets "[]" replaced with your own identifying
+# information: Portions Copyright [yyyy] [name of copyright owner]
+#
+# CDDL HEADER END
+#
+
+#
+# Copyright 2007 Sun Microsystems, Inc.  All rights reserved.
+# Use is subject to license terms.
+#
+
+#
+# Copyright (c) 2013 by Delphix. All rights reserved.
+#
+
+. $STF_SUITE/include/libtest.shlib
+
+default_cleanup
diff --git a/tests/zfs-tests/tests/functional/cp_files/cp_files.c b/tests/zfs-tests/tests/functional/cp_files/cp_files.c
new file mode 100644
index 000000000..9af64a112
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/cp_files/cp_files.c
@@ -0,0 +1,58 @@
+#include <stdio.h>
+#include <stdlib.h>
+#include <unistd.h>
+#include <sys/types.h>
+#include <sys/stat.h>
+#include <fcntl.h>
+#include <dirent.h>
+#include <errno.h>
+#include <string.h>
+
+int
+main(int argc, char *argv[])
+{
+	int tfd;
+	DIR *sdir;
+	struct dirent *dirent;
+
+	if (argc != 3) {
+		fprintf(stderr, "Usage: %s SRC DST\n", argv[0]);
+		exit(1);
+	}
+
+	sdir = opendir(argv[1]);
+	if (sdir == NULL) {
+		fprintf(stderr, "Failed to open %s: %s\n",
+		    argv[1], strerror(errno));
+		exit(2);
+	}
+
+	tfd = open(argv[2], O_DIRECTORY);
+	if (tfd < 0) {
+		fprintf(stderr, "Failed to open %s: %s\n",
+		    argv[2], strerror(errno));
+		closedir(sdir);
+		exit(3);
+	}
+
+	while ((dirent = readdir(sdir)) != NULL) {
+		if (dirent->d_name[0] == '.' &&
+		    (dirent->d_name[1] == '.' || dirent->d_name[1] == '\0'))
+			continue;
+
+		int fd = openat(tfd, dirent->d_name, O_CREAT|O_WRONLY, 0666);
+		if (fd < 0) {
+			fprintf(stderr, "Failed to create %s/%s: %s\n",
+			    argv[2], dirent->d_name, strerror(errno));
+			closedir(sdir);
+			close(tfd);
+			exit(4);
+		}
+		close(fd);
+	}
+
+	closedir(sdir);
+	close(tfd);
+
+	return (0);
+}
diff --git a/tests/zfs-tests/tests/functional/cp_files/cp_files_001_pos.ksh b/tests/zfs-tests/tests/functional/cp_files/cp_files_001_pos.ksh
new file mode 100755
index 000000000..3e138cfc9
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/cp_files/cp_files_001_pos.ksh
@@ -0,0 +1,74 @@
+#! /bin/ksh -p
+#
+# CDDL HEADER START
+#
+# The contents of this file are subject to the terms of the
+# Common Development and Distribution License (the "License").
+# You may not use this file except in compliance with the License.
+#
+# You can obtain a copy of the license at usr/src/OPENSOLARIS.LICENSE
+# or http://www.opensolaris.org/os/licensing.
+# See the License for the specific language governing permissions
+# and limitations under the License.
+#
+# When distributing Covered Code, include this CDDL HEADER in each
+# file and include the License file at usr/src/OPENSOLARIS.LICENSE.
+# If applicable, add the following below this CDDL HEADER, with the
+# fields enclosed by brackets "[]" replaced with your own identifying
+# information: Portions Copyright [yyyy] [name of copyright owner]
+#
+# CDDL HEADER END
+#
+
+#
+# Copyright (c) 2018 by Nutanix. All rights reserved.
+#
+
+. $STF_SUITE/include/libtest.shlib
+
+#
+# DESCRIPTION:
+# Copy a large number of files between 2 directories
+# within a zfs filesystem works without errors.
+# This make sure zap upgrading and expanding works.
+#
+# STRATEGY:
+#
+# 1. Create NR_FILES files in directory src
+# 2. Check the number of files is correct
+# 3. Copy files from src to dst in readdir order
+# 4. Check the number of files is correct
+#
+
+verify_runnable "global"
+
+function cleanup
+{
+	rm -rf $TESTDIR/src $TESTDIR/dst
+}
+
+log_assert "Copy a large number of files between 2 directories" \
+	"within a zfs filesystem works without errors"
+
+log_onexit cleanup
+
+NR_FILES=60000
+BATCH=1000
+
+log_must mkdir $TESTDIR/src
+log_must mkdir $TESTDIR/dst
+
+WD=$(pwd)
+cd $TESTDIR/src
+# create NR_FILES in BATCH at a time to prevent overflowing argument buffer
+for i in $(seq $(($NR_FILES/$BATCH))); do touch $(seq $((($i-1)*$BATCH+1)) $(($i*$BATCH))); done
+cd $WD
+
+log_must test $NR_FILES -eq $(ls -U $TESTDIR/src | wc -l)
+
+# copy files from src to dst, use cp_files to make sure we copy in readdir order
+log_must $STF_SUITE/tests/functional/cp_files/cp_files $TESTDIR/src $TESTDIR/dst
+
+log_must test $NR_FILES -eq $(ls -U $TESTDIR/dst | wc -l)
+
+log_pass
diff --git a/tests/zfs-tests/tests/functional/cp_files/setup.ksh b/tests/zfs-tests/tests/functional/cp_files/setup.ksh
new file mode 100755
index 000000000..fc5cec306
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/cp_files/setup.ksh
@@ -0,0 +1,35 @@
+#!/bin/ksh -p
+#
+# CDDL HEADER START
+#
+# The contents of this file are subject to the terms of the
+# Common Development and Distribution License (the "License").
+# You may not use this file except in compliance with the License.
+#
+# You can obtain a copy of the license at usr/src/OPENSOLARIS.LICENSE
+# or http://www.opensolaris.org/os/licensing.
+# See the License for the specific language governing permissions
+# and limitations under the License.
+#
+# When distributing Covered Code, include this CDDL HEADER in each
+# file and include the License file at usr/src/OPENSOLARIS.LICENSE.
+# If applicable, add the following below this CDDL HEADER, with the
+# fields enclosed by brackets "[]" replaced with your own identifying
+# information: Portions Copyright [yyyy] [name of copyright owner]
+#
+# CDDL HEADER END
+#
+
+#
+# Copyright 2007 Sun Microsystems, Inc.  All rights reserved.
+# Use is subject to license terms.
+#
+
+#
+# Copyright (c) 2013 by Delphix. All rights reserved.
+#
+
+. $STF_SUITE/include/libtest.shlib
+
+DISK=${DISKS%% *}
+default_setup $DISK