diff --git a/fs/reiserfs/inode.c b/fs/reiserfs/inode.c
index 50a73e7..995f697 100644
--- a/fs/reiserfs/inode.c
+++ b/fs/reiserfs/inode.c
@@ -1914,9 +1914,8 @@
 		goto out_inserted_sd;
 	}
 
-	/* XXX CHECK THIS */
 	if (reiserfs_posixacl(inode->i_sb)) {
-		retval = reiserfs_inherit_default_acl(dir, dentry, inode);
+		retval = reiserfs_inherit_default_acl(th, dir, dentry, inode);
 		if (retval) {
 			err = retval;
 			reiserfs_check_path(&path_to_key);
diff --git a/fs/reiserfs/namei.c b/fs/reiserfs/namei.c
index ddf1bcd..d9c1c8b 100644
--- a/fs/reiserfs/namei.c
+++ b/fs/reiserfs/namei.c
@@ -598,15 +598,13 @@
 	    2 * (REISERFS_QUOTA_INIT_BLOCKS(dir->i_sb) +
 		 REISERFS_QUOTA_TRANS_BLOCKS(dir->i_sb));
 	struct reiserfs_transaction_handle th;
-	int locked;
 
 	if (!(inode = new_inode(dir->i_sb))) {
 		return -ENOMEM;
 	}
 	new_inode_init(inode, dir, mode);
 
-	locked = reiserfs_cache_default_acl(dir);
-
+	jbegin_count += reiserfs_cache_default_acl(dir);
 	reiserfs_write_lock(dir->i_sb);
 
 	retval = journal_begin(&th, dir->i_sb, jbegin_count);
@@ -662,7 +660,6 @@
 	    JOURNAL_PER_BALANCE_CNT * 3 +
 	    2 * (REISERFS_QUOTA_INIT_BLOCKS(dir->i_sb) +
 		 REISERFS_QUOTA_TRANS_BLOCKS(dir->i_sb));
-	int locked;
 
 	if (!new_valid_dev(rdev))
 		return -EINVAL;
@@ -672,8 +669,7 @@
 	}
 	new_inode_init(inode, dir, mode);
 
-	locked = reiserfs_cache_default_acl(dir);
-
+	jbegin_count += reiserfs_cache_default_acl(dir);
 	reiserfs_write_lock(dir->i_sb);
 
 	retval = journal_begin(&th, dir->i_sb, jbegin_count);
@@ -732,7 +728,6 @@
 	    JOURNAL_PER_BALANCE_CNT * 3 +
 	    2 * (REISERFS_QUOTA_INIT_BLOCKS(dir->i_sb) +
 		 REISERFS_QUOTA_TRANS_BLOCKS(dir->i_sb));
-	int locked;
 
 #ifdef DISPLACE_NEW_PACKING_LOCALITIES
 	/* set flag that new packing locality created and new blocks for the content     * of that directory are not displaced yet */
@@ -744,8 +739,7 @@
 	}
 	new_inode_init(inode, dir, mode);
 
-	locked = reiserfs_cache_default_acl(dir);
-
+	jbegin_count += reiserfs_cache_default_acl(dir);
 	reiserfs_write_lock(dir->i_sb);
 
 	retval = journal_begin(&th, dir->i_sb, jbegin_count);
@@ -1034,8 +1028,6 @@
 	memcpy(name, symname, strlen(symname));
 	padd_item(name, item_len, strlen(symname));
 
-	/* We would inherit the default ACL here, but symlinks don't get ACLs */
-
 	retval = journal_begin(&th, parent_dir->i_sb, jbegin_count);
 	if (retval) {
 		drop_new_inode(inode);
diff --git a/fs/reiserfs/xattr.c b/fs/reiserfs/xattr.c
index d3ce274..c2e3a92 100644
--- a/fs/reiserfs/xattr.c
+++ b/fs/reiserfs/xattr.c
@@ -632,8 +632,9 @@
  * inode->i_mutex: down
  */
 int
-__reiserfs_xattr_set(struct inode *inode, const char *name, const void *buffer,
-		     size_t buffer_size, int flags)
+reiserfs_xattr_set_handle(struct reiserfs_transaction_handle *th,
+			  struct inode *inode, const char *name,
+			  const void *buffer, size_t buffer_size, int flags)
 {
 	int err = 0;
 	struct dentry *dentry;
@@ -723,14 +724,34 @@
 	return err;
 }
 
-int
-reiserfs_xattr_set(struct inode *inode, const char *name, const void *buffer,
-		     size_t buffer_size, int flags)
+/* We need to start a transaction to maintain lock ordering */
+int reiserfs_xattr_set(struct inode *inode, const char *name,
+		       const void *buffer, size_t buffer_size, int flags)
 {
-	int err = __reiserfs_xattr_set(inode, name, buffer, buffer_size, flags);
-	if (err == -ENODATA)
-		err = 0;
-	return err;
+
+	struct reiserfs_transaction_handle th;
+	int error, error2;
+	size_t jbegin_count = reiserfs_xattr_nblocks(inode, buffer_size);
+
+	if (!(flags & XATTR_REPLACE))
+		jbegin_count += reiserfs_xattr_jcreate_nblocks(inode);
+
+	reiserfs_write_lock(inode->i_sb);
+	error = journal_begin(&th, inode->i_sb, jbegin_count);
+	if (error) {
+		reiserfs_write_unlock(inode->i_sb);
+		return error;
+	}
+
+	error = reiserfs_xattr_set_handle(&th, inode, name,
+					  buffer, buffer_size, flags);
+
+	error2 = journal_end(&th, inode->i_sb, jbegin_count);
+	if (error == 0)
+		error = error2;
+	reiserfs_write_unlock(inode->i_sb);
+
+	return error;
 }
 
 /*
diff --git a/fs/reiserfs/xattr_acl.c b/fs/reiserfs/xattr_acl.c
index bfecf75..d423416 100644
--- a/fs/reiserfs/xattr_acl.c
+++ b/fs/reiserfs/xattr_acl.c
@@ -10,15 +10,17 @@
 #include <linux/reiserfs_acl.h>
 #include <asm/uaccess.h>
 
-static int reiserfs_set_acl(struct inode *inode, int type,
+static int reiserfs_set_acl(struct reiserfs_transaction_handle *th,
+			    struct inode *inode, int type,
 			    struct posix_acl *acl);
 
 static int
 xattr_set_acl(struct inode *inode, int type, const void *value, size_t size)
 {
 	struct posix_acl *acl;
-	int error;
-
+	int error, error2;
+	struct reiserfs_transaction_handle th;
+	size_t jcreate_blocks;
 	if (!reiserfs_posixacl(inode->i_sb))
 		return -EOPNOTSUPP;
 	if (!is_owner_or_cap(inode))
@@ -36,7 +38,21 @@
 	} else
 		acl = NULL;
 
-	error = reiserfs_set_acl(inode, type, acl);
+	/* Pessimism: We can't assume that anything from the xattr root up
+	 * has been created. */
+
+	jcreate_blocks = reiserfs_xattr_jcreate_nblocks(inode) +
+			 reiserfs_xattr_nblocks(inode, size) * 2;
+
+	reiserfs_write_lock(inode->i_sb);
+	error = journal_begin(&th, inode->i_sb, jcreate_blocks);
+	if (error == 0) {
+		error = reiserfs_set_acl(&th, inode, type, acl);
+		error2 = journal_end(&th, inode->i_sb, jcreate_blocks);
+		if (error2)
+			error = error2;
+	}
+	reiserfs_write_unlock(inode->i_sb);
 
       release_and_out:
 	posix_acl_release(acl);
@@ -266,7 +282,8 @@
  * BKL held [before 2.5.x]
  */
 static int
-reiserfs_set_acl(struct inode *inode, int type, struct posix_acl *acl)
+reiserfs_set_acl(struct reiserfs_transaction_handle *th, struct inode *inode,
+		 int type, struct posix_acl *acl)
 {
 	char *name;
 	void *value = NULL;
@@ -310,7 +327,7 @@
 			return (int)PTR_ERR(value);
 	}
 
-	error = __reiserfs_xattr_set(inode, name, value, size, 0);
+	error = reiserfs_xattr_set_handle(th, inode, name, value, size, 0);
 
 	/*
 	 * Ensure that the inode gets dirtied if we're only using
@@ -337,7 +354,8 @@
 /* dir->i_mutex: locked,
  * inode is new and not released into the wild yet */
 int
-reiserfs_inherit_default_acl(struct inode *dir, struct dentry *dentry,
+reiserfs_inherit_default_acl(struct reiserfs_transaction_handle *th,
+			     struct inode *dir, struct dentry *dentry,
 			     struct inode *inode)
 {
 	struct posix_acl *acl;
@@ -374,7 +392,8 @@
 
 		/* Copy the default ACL to the default ACL of a new directory */
 		if (S_ISDIR(inode->i_mode)) {
-			err = reiserfs_set_acl(inode, ACL_TYPE_DEFAULT, acl);
+			err = reiserfs_set_acl(th, inode, ACL_TYPE_DEFAULT,
+					       acl);
 			if (err)
 				goto cleanup;
 		}
@@ -395,9 +414,9 @@
 
 			/* If we need an ACL.. */
 			if (need_acl > 0) {
-				err =
-				    reiserfs_set_acl(inode, ACL_TYPE_ACCESS,
-						     acl_copy);
+				err = reiserfs_set_acl(th, inode,
+						       ACL_TYPE_ACCESS,
+						       acl_copy);
 				if (err)
 					goto cleanup_copy;
 			}
@@ -415,21 +434,45 @@
 	return err;
 }
 
-/* Looks up and caches the result of the default ACL.
- * We do this so that we don't need to carry the xattr_sem into
- * reiserfs_new_inode if we don't need to */
+/* This is used to cache the default acl before a new object is created.
+ * The biggest reason for this is to get an idea of how many blocks will
+ * actually be required for the create operation if we must inherit an ACL.
+ * An ACL write can add up to 3 object creations and an additional file write
+ * so we'd prefer not to reserve that many blocks in the journal if we can.
+ * It also has the advantage of not loading the ACL with a transaction open,
+ * this may seem silly, but if the owner of the directory is doing the
+ * creation, the ACL may not be loaded since the permissions wouldn't require
+ * it.
+ * We return the number of blocks required for the transaction.
+ */
 int reiserfs_cache_default_acl(struct inode *inode)
 {
-	int ret = 0;
-	if (reiserfs_posixacl(inode->i_sb) && !IS_PRIVATE(inode)) {
-		struct posix_acl *acl;
-		acl = reiserfs_get_acl(inode, ACL_TYPE_DEFAULT);
-		ret = (acl && !IS_ERR(acl));
-		if (ret)
-			posix_acl_release(acl);
+	struct posix_acl *acl;
+	int nblocks = 0;
+
+	if (IS_PRIVATE(inode))
+		return 0;
+
+	acl = reiserfs_get_acl(inode, ACL_TYPE_DEFAULT);
+
+	if (acl && !IS_ERR(acl)) {
+		int size = reiserfs_acl_size(acl->a_count);
+
+		/* Other xattrs can be created during inode creation. We don't
+		 * want to claim too many blocks, so we check to see if we
+		 * we need to create the tree to the xattrs, and then we
+		 * just want two files. */
+		nblocks = reiserfs_xattr_jcreate_nblocks(inode);
+		nblocks += JOURNAL_BLOCKS_PER_OBJECT(inode->i_sb);
+
+		REISERFS_I(inode)->i_flags |= i_has_xattr_dir;
+
+		/* We need to account for writes + bitmaps for two files */
+		nblocks += reiserfs_xattr_nblocks(inode, size) * 4;
+		posix_acl_release(acl);
 	}
 
-	return ret;
+	return nblocks;
 }
 
 int reiserfs_acl_chmod(struct inode *inode)
@@ -455,8 +498,22 @@
 	if (!clone)
 		return -ENOMEM;
 	error = posix_acl_chmod_masq(clone, inode->i_mode);
-	if (!error)
-		error = reiserfs_set_acl(inode, ACL_TYPE_ACCESS, clone);
+	if (!error) {
+		struct reiserfs_transaction_handle th;
+		size_t size = reiserfs_xattr_nblocks(inode,
+					     reiserfs_acl_size(clone->a_count));
+		reiserfs_write_lock(inode->i_sb);
+		error = journal_begin(&th, inode->i_sb, size * 2);
+		if (!error) {
+			int error2;
+			error = reiserfs_set_acl(&th, inode, ACL_TYPE_ACCESS,
+						 clone);
+			error2 = journal_end(&th, inode->i_sb, size * 2);
+			if (error2)
+				error = error2;
+		}
+		reiserfs_write_unlock(inode->i_sb);
+	}
 	posix_acl_release(clone);
 	return error;
 }
diff --git a/include/linux/reiserfs_acl.h b/include/linux/reiserfs_acl.h
index d180446..52240e0 100644
--- a/include/linux/reiserfs_acl.h
+++ b/include/linux/reiserfs_acl.h
@@ -49,7 +49,8 @@
 #ifdef CONFIG_REISERFS_FS_POSIX_ACL
 struct posix_acl *reiserfs_get_acl(struct inode *inode, int type);
 int reiserfs_acl_chmod(struct inode *inode);
-int reiserfs_inherit_default_acl(struct inode *dir, struct dentry *dentry,
+int reiserfs_inherit_default_acl(struct reiserfs_transaction_handle *th,
+				 struct inode *dir, struct dentry *dentry,
 				 struct inode *inode);
 int reiserfs_cache_default_acl(struct inode *dir);
 extern struct xattr_handler reiserfs_posix_acl_default_handler;
diff --git a/include/linux/reiserfs_fs.h b/include/linux/reiserfs_fs.h
index e00d240..67ad310 100644
--- a/include/linux/reiserfs_fs.h
+++ b/include/linux/reiserfs_fs.h
@@ -1615,6 +1615,10 @@
 #define JOURNAL_MAX_COMMIT_AGE 30
 #define JOURNAL_MAX_TRANS_AGE 30
 #define JOURNAL_PER_BALANCE_CNT (3 * (MAX_HEIGHT-2) + 9)
+#define JOURNAL_BLOCKS_PER_OBJECT(sb)  (JOURNAL_PER_BALANCE_CNT * 3 + \
+					 2 * (REISERFS_QUOTA_INIT_BLOCKS(sb) + \
+					      REISERFS_QUOTA_TRANS_BLOCKS(sb)))
+
 #ifdef CONFIG_QUOTA
 /* We need to update data and inode (atime) */
 #define REISERFS_QUOTA_TRANS_BLOCKS(s) (REISERFS_SB(s)->s_mount_opt & (1<<REISERFS_QUOTA) ? 2 : 0)
diff --git a/include/linux/reiserfs_xattr.h b/include/linux/reiserfs_xattr.h
index 958fcac..20eca09 100644
--- a/include/linux/reiserfs_xattr.h
+++ b/include/linux/reiserfs_xattr.h
@@ -46,14 +46,50 @@
 int reiserfs_permission(struct inode *inode, int mask);
 
 int reiserfs_xattr_get(struct inode *, const char *, void *, size_t);
-int __reiserfs_xattr_set(struct inode *, const char *, const void *,
-			 size_t, int);
 int reiserfs_xattr_set(struct inode *, const char *, const void *, size_t, int);
+int reiserfs_xattr_set_handle(struct reiserfs_transaction_handle *,
+			      struct inode *, const char *, const void *,
+			      size_t, int);
 
 extern struct xattr_handler reiserfs_xattr_user_handler;
 extern struct xattr_handler reiserfs_xattr_trusted_handler;
 extern struct xattr_handler reiserfs_xattr_security_handler;
 
+#define xattr_size(size) ((size) + sizeof(struct reiserfs_xattr_header))
+static inline loff_t reiserfs_xattr_nblocks(struct inode *inode, loff_t size)
+{
+	loff_t ret = 0;
+	if (reiserfs_file_data_log(inode)) {
+		ret = _ROUND_UP(xattr_size(size), inode->i_sb->s_blocksize);
+		ret >>= inode->i_sb->s_blocksize_bits;
+	}
+	return ret;
+}
+
+/* We may have to create up to 3 objects: xattr root, xattr dir, xattr file.
+ * Let's try to be smart about it.
+ * xattr root: We cache it. If it's not cached, we may need to create it.
+ * xattr dir: If anything has been loaded for this inode, we can set a flag
+ *            saying so.
+ * xattr file: Since we don't cache xattrs, we can't tell. We always include
+ *             blocks for it.
+ *
+ * However, since root and dir can be created between calls - YOU MUST SAVE
+ * THIS VALUE.
+ */
+static inline size_t reiserfs_xattr_jcreate_nblocks(struct inode *inode)
+{
+	size_t nblocks = JOURNAL_BLOCKS_PER_OBJECT(inode->i_sb);
+
+	if ((REISERFS_I(inode)->i_flags & i_has_xattr_dir) == 0) {
+		nblocks += JOURNAL_BLOCKS_PER_OBJECT(inode->i_sb);
+		if (REISERFS_SB(inode->i_sb)->xattr_root == NULL)
+			nblocks += JOURNAL_BLOCKS_PER_OBJECT(inode->i_sb);
+	}
+
+	return nblocks;
+}
+
 static inline void reiserfs_init_xattr_rwsem(struct inode *inode)
 {
 	init_rwsem(&REISERFS_I(inode)->i_xattr_sem);