diff --git a/apply/apply.go b/apply/apply.go
index 0eb524a69..64b740164 100644
--- a/apply/apply.go
+++ b/apply/apply.go
@@ -273,7 +273,14 @@ func fmtHcl(fs afero.Fs, path string) error {
 }
 
 func touchFile(dest afero.Fs, path string) error {
-	_, err := dest.Stat(path)
+	dir, _ := filepath.Split(path)
+	ospath := filepath.FromSlash(dir)
+	err := dest.MkdirAll(ospath, 0755)
+	if err != nil {
+		return errs.WrapUserf(err, "couldn't create %s directory", dir)
+	}
+
+	_, err = dest.Stat(path)
 	if err != nil { // TODO we might not want to do this for all errors
 		log.Infof("%s touched", path)
 		_, err = dest.Create(path)
@@ -305,6 +312,13 @@ func removeExtension(path string) string {
 }
 
 func applyTemplate(sourceFile io.Reader, dest afero.Fs, path string, overrides interface{}) error {
+	dir, _ := filepath.Split(path)
+	ospath := filepath.FromSlash(dir)
+	err := dest.MkdirAll(ospath, 0755)
+	if err != nil {
+		return errs.WrapUserf(err, "couldn't create %s directory", dir)
+	}
+
 	log.Infof("%s templated", path)
 	writer, err := dest.OpenFile(path, os.O_RDWR|os.O_CREATE|os.O_TRUNC, 0755)
 	if err != nil {
diff --git a/apply/apply_test.go b/apply/apply_test.go
index 6ee33043a..4484cea3a 100644
--- a/apply/apply_test.go
+++ b/apply/apply_test.go
@@ -5,6 +5,8 @@ import (
 	"os"
 	"strings"
 	"testing"
+	"math/rand"
+	"path/filepath"
 
 	"github.com/chanzuckerberg/fogg/config"
 	"github.com/chanzuckerberg/fogg/templates"
@@ -20,6 +22,26 @@ func init() {
 	}
 	log.SetFormatter(formatter)
 }
+
+func randomString(n int) string {
+    var letter = []rune("abcdefghijklmnopqrstuvwxyzABCDEFGHIJKLMNOPQRSTUVWXYZ0123456789")
+
+    b := make([]rune, n)
+    for i := range b {
+        b[i] = letter[rand.Intn(len(letter))]
+    }
+    return string(b)
+}
+
+func getNonExistentDirectoryName() string {
+	nonexistentDir := "noexist-" + randomString(20)
+	for {
+		_, err := os.Stat(nonexistentDir)
+		if os.IsNotExist(err) { return nonexistentDir; }
+		nonexistentDir = "noexist-" + randomString(20)
+	}
+}
+
 func TestRemoveExtension(t *testing.T) {
 	x := removeExtension("foo")
 	assert.Equal(t, "foo", x)
@@ -49,6 +71,24 @@ func TestApplyTemplateBasic(t *testing.T) {
 	assert.Equal(t, "foo", string(r))
 }
 
+func TestApplyTemplateBasicNewDirectory(t *testing.T) {
+	sourceFile := strings.NewReader("foo")
+	// Potential errors do not show up if using NewMemMapFs; needs real OS fs.
+	dest := afero.NewOsFs()
+	nonexistentDir := getNonExistentDirectoryName()
+	defer dest.RemoveAll(nonexistentDir)
+	path := filepath.Join(nonexistentDir, "bar")
+	overrides := struct{ Foo string }{"foo"}
+
+	e := applyTemplate(sourceFile, dest, path, overrides)
+	assert.Nil(t, e)
+	f, e := dest.Open(path)
+	assert.Nil(t, e)
+	r, e := ioutil.ReadAll(f)
+	assert.Nil(t, e)
+	assert.Equal(t, "foo", string(r))
+}
+
 func TestApplyTemplate(t *testing.T) {
 	sourceFile := strings.NewReader("Hello {{.Name}}")
 	dest := afero.NewMemMapFs()
@@ -89,6 +129,19 @@ func TestTouchFile(t *testing.T) {
 
 }
 
+func TestTouchFileNonExistentDirectory(t *testing.T) {
+	// Potential errors do not show up if using NewMemMapFs; needs real OS fs.
+	dest := afero.NewOsFs()
+	nonexistentDir := getNonExistentDirectoryName()
+	defer dest.RemoveAll(nonexistentDir)
+	e := touchFile(dest, filepath.Join(nonexistentDir, "foo"))
+	assert.Nil(t, e)
+	r, e := readFile(dest, filepath.Join(nonexistentDir, "foo"))
+	assert.Nil(t, e)
+	assert.Equal(t, "", r)
+	assert.Nil(t, e)
+}
+
 func TestCreateFile(t *testing.T) {
 	fs := afero.NewMemMapFs()
 
@@ -118,6 +171,19 @@ func TestCreateFile(t *testing.T) {
 	r, e = readFile(fs, "foo")
 	assert.Nil(t, e)
 	assert.Equal(t, "bar", r)
+}
+
+func TestCreateFileNonExistentDirectory(t *testing.T) {
+
+	// create new file in nonexistent directory
+	dest := afero.NewOsFs()
+
+	e := createFile(dest, "newdir/foo", strings.NewReader("bar"))
+	assert.Nil(t, e)
+
+	r, e := readFile(dest, "newdir/foo")
+	assert.Nil(t, e)
+	assert.Equal(t, "bar", r)
 
 }