diff --git a/src/uu/mktemp/src/mktemp.rs b/src/uu/mktemp/src/mktemp.rs
index e145a393354..6c899c452f5 100644
--- a/src/uu/mktemp/src/mktemp.rs
+++ b/src/uu/mktemp/src/mktemp.rs
@@ -150,7 +150,26 @@ pub fn uumain(args: impl uucore::Args) -> UResult<()> {
             (template, tmp)
         }
     } else {
-        (template, PathBuf::from(tmpdir))
+        // In this case, the command was `mktemp --tmpdir=foo XXX`, so
+        // we need to parse out the parent directory and the filename
+        // from the argument `XXX`, since it may be include path
+        // separators.
+
+        // The template cannot be an absolute path. For example, `mktemp
+        // --tmpdir=a /XXX` is not allowed.
+        if path.is_absolute() {
+            return Err(MkTempError::InvalidTemplate(template.into()).into());
+        }
+
+        // `mktemp --tmpdir=a b/cXXX` becomes `a`, `b`, and `cXXX`.
+        // Then the `tmpdir` is `a/b` and `template` is `cXXX`.
+        let subdirectory = path.parent().unwrap_or_else(|| Path::new(""));
+        let tmpdir = PathBuf::from(tmpdir).join(subdirectory);
+        let template = match path.file_name() {
+            None => template,
+            Some(s) => s.to_str().unwrap(),
+        };
+        (template, tmpdir)
     };
 
     let make_dir = matches.is_present(OPT_DIRECTORY);
diff --git a/tests/by-util/test_mktemp.rs b/tests/by-util/test_mktemp.rs
index 86c4ba4dbe4..8d1b5d02c0e 100644
--- a/tests/by-util/test_mktemp.rs
+++ b/tests/by-util/test_mktemp.rs
@@ -27,6 +27,18 @@ const TMPDIR: &str = "TMPDIR";
 #[cfg(windows)]
 const TMPDIR: &str = "TMP";
 
+/// An assertion that uses [`matches_template`] and adds a helpful error message.
+macro_rules! assert_matches_template {
+    ($template:expr, $s:expr) => {{
+        assert!(
+            matches_template($template, $s),
+            "\"{}\" != \"{}\"",
+            $template,
+            $s
+        );
+    }};
+}
+
 #[test]
 fn test_mktemp_mktemp() {
     let scene = TestScenario::new(util_name!());
@@ -417,6 +429,21 @@ fn test_mktemp_directory_tmpdir() {
     assert!(PathBuf::from(result.stdout_str().trim()).is_dir());
 }
 
+/// Test for combining `--tmpdir` and a template with a subdirectory.
+#[test]
+fn test_tmpdir_template_has_subdirectory() {
+    let (at, mut ucmd) = at_and_ucmd!();
+    at.mkdir("a");
+    #[cfg(not(windows))]
+    let (template, joined) = ("a/bXXXX", "./a/bXXXX");
+    #[cfg(windows)]
+    let (template, joined) = (r"a\bXXXX", r".\a\bXXXX");
+    let result = ucmd.args(&["--tmpdir=.", template]).succeeds();
+    let filename = result.no_stderr().stdout_str().trim_end();
+    assert_matches_template!(joined, filename);
+    assert!(at.file_exists(filename));
+}
+
 /// Test that an absolute path is disallowed when --tmpdir is provided.
 #[test]
 fn test_tmpdir_absolute_path() {
@@ -466,18 +493,6 @@ fn matches_template(template: &str, s: &str) -> bool {
     true
 }
 
-/// An assertion that uses [`matches_template`] and adds a helpful error message.
-macro_rules! assert_matches_template {
-    ($template:expr, $s:expr) => {{
-        assert!(
-            matches_template($template, $s),
-            "\"{}\" != \"{}\"",
-            $template,
-            $s
-        );
-    }};
-}
-
 /// Test that the file is created in the directory given by the template.
 #[test]
 fn test_respect_template() {