diff --git a/azurelinuxagent/common/utils/fileutil.py b/azurelinuxagent/common/utils/fileutil.py
index 03090a427d..94eb5cf1bf 100644
--- a/azurelinuxagent/common/utils/fileutil.py
+++ b/azurelinuxagent/common/utils/fileutil.py
@@ -99,13 +99,15 @@ def get_line_startingwith(prefix, filepath):
     return None
 
 
-def mkdir(dirpath, mode=None, owner=None):
+def mkdir(dirpath, mode=None, owner=None, reset_mode_and_owner=True):
     if not os.path.isdir(dirpath):
         os.makedirs(dirpath)
-    if mode is not None:
-        chmod(dirpath, mode)
-    if owner is not None:
-        chowner(dirpath, owner)
+        reset_mode_and_owner = True  # force setting the mode and owner
+    if reset_mode_and_owner:
+        if mode is not None:
+            chmod(dirpath, mode)
+        if owner is not None:
+            chowner(dirpath, owner)
 
 
 def chowner(path, owner):
diff --git a/azurelinuxagent/ga/exthandlers.py b/azurelinuxagent/ga/exthandlers.py
index a09a81e96c..fcb14d22b9 100644
--- a/azurelinuxagent/ga/exthandlers.py
+++ b/azurelinuxagent/ga/exthandlers.py
@@ -1051,7 +1051,7 @@ def get_extension_full_name(self, extension=None):
 
     def __set_command_execution_log(self, extension, execution_log_max_size):
         try:
-            fileutil.mkdir(self.get_log_dir(), mode=0o755)
+            fileutil.mkdir(self.get_log_dir(), mode=0o755, reset_mode_and_owner=False)
         except IOError as e:
             self.logger.error(u"Failed to create extension log dir: {0}", e)
         else:
diff --git a/tests/ga/test_exthandlers.py b/tests/ga/test_exthandlers.py
index 2f03396599..f56ebce14b 100644
--- a/tests/ga/test_exthandlers.py
+++ b/tests/ga/test_exthandlers.py
@@ -287,6 +287,28 @@ def test_command_extension_log_truncates_correctly(self, mock_log_dir):
         with open(log_file_path) as truncated_log_file:
             self.assertEqual(truncated_log_file.read(), "{second_line}\n".format(second_line=second_line))
 
+    def test_set_logger_should_not_reset_the_mode_of_the_log_directory(self):
+        ext_log_dir = os.path.join(self.tmp_dir, "log_directory")
+
+        with patch("azurelinuxagent.common.conf.get_ext_log_dir", return_value=ext_log_dir):
+            ext_handler = Extension(name='foo')
+            ext_handler.version = "1.2.3"
+            ext_handler_instance = ExtHandlerInstance(ext_handler=ext_handler, protocol=None)
+            ext_handler_log_dir = os.path.join(ext_log_dir, ext_handler.name)
+
+            # Double-check the initial mode
+            get_mode = lambda f: os.stat(f).st_mode & 0o777
+            mode = get_mode(ext_handler_log_dir)
+            if mode != 0o755:
+                raise Exception("The initial mode of the log directory should be 0o755, got 0{0:o}".format(mode))
+
+            new_mode = 0o700
+            os.chmod(ext_handler_log_dir, new_mode)
+            ext_handler_instance.set_logger()
+
+            mode = get_mode(ext_handler_log_dir)
+            self.assertEqual(new_mode, mode, "The mode of the log directory should not have changed")
+
     def test_it_should_report_the_message_in_the_hearbeat(self):
         def heartbeat_with_message():
             return {'code': 0, 'formattedMessage': {'lang': 'en-US', 'message': 'This is a heartbeat message'},