diff --git a/CHANGELOG b/CHANGELOG
index ec3d391a3..ea8d3f6ca 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,5 +1,7 @@
 *SVN*
 
+* Fixed that cap setup would use 755 on the deploy_to and shared directory roots instead of 775 [DHH]
+
 * Don't run the cleanup task on servers marked no_release [Jamis Buck]
 
 * Fix typo in default_io_proc so it correctly checks the stream parameter to see if it is the error stream [Stephen Haberman]
diff --git a/lib/capistrano/recipes/standard.rb b/lib/capistrano/recipes/standard.rb
index c498af1eb..56bbc02c0 100644
--- a/lib/capistrano/recipes/standard.rb
+++ b/lib/capistrano/recipes/standard.rb
@@ -37,7 +37,7 @@
 desc "Set up the expected application directory structure on all boxes"
 task :setup, :except => { :no_release => true } do
   run <<-CMD
-    mkdir -p -m 775 #{releases_path} #{shared_path}/system &&
+    mkdir -p -m 775 #{deploy_to} #{releases_path} #{shared_path} #{shared_path}/system &&
     mkdir -p -m 777 #{shared_path}/log &&
     mkdir -p -m 777 #{shared_path}/pids
   CMD