diff --git a/Annex/Version.hs b/Annex/Version.hs
index 5827dcbd4a..19a1a23c61 100644
--- a/Annex/Version.hs
+++ b/Annex/Version.hs
@@ -28,6 +28,9 @@ supportedVersions = map RepoVersion [5, 7]
 versionForAdjustedClone :: RepoVersion
 versionForAdjustedClone = RepoVersion 7
 
+versionForAdjustedBranch :: RepoVersion
+versionForAdjustedBranch = RepoVersion 7
+
 versionForCrippledFilesystem :: RepoVersion
 versionForCrippledFilesystem = RepoVersion 7
 
diff --git a/Assistant/MakeRepo.hs b/Assistant/MakeRepo.hs
index dcae3e2339..156991cca1 100644
--- a/Assistant/MakeRepo.hs
+++ b/Assistant/MakeRepo.hs
@@ -15,12 +15,15 @@ import qualified Git.Command
 import qualified Git.Branch
 import qualified Annex
 import Annex.UUID
-import Annex.Direct
+import Annex.AdjustedBranch
 import Annex.Action
+import Annex.Version
+import Upgrade
 import Types.StandardGroups
 import Logs.PreferredContent
 import qualified Annex.Branch
 import Utility.Process.Transcript
+import Config
 
 {- Makes a new git repository. Or, if a git repository already
  - exists, returns False. -}
@@ -59,13 +62,16 @@ initRepo True primary_assistant_repo dir desc mgroup = inDir dir $ do
 			, Param "-m"
 			, Param "created repository"
 			]
-	{- Repositories directly managed by the assistant use direct mode.
+	{- Repositories directly managed by the assistant use v7 unlocked
+	 - with annex.thin set.
 	 - 
 	 - Automatic gc is disabled, as it can be slow. Insted, gc is done
 	 - once a day.
 	 -}
 	when primary_assistant_repo $ do
-		setDirect True
+		void $ upgrade True versionForAdjustedBranch
+		void $ enterAdjustedBranch (LinkAdjustment UnlockAdjustment)
+		setConfig (annexConfig "thin") (Git.Config.boolConfig True)
 		inRepo $ Git.Command.run
 			[Param "config", Param "gc.auto", Param "0"]
 	getUUID
diff --git a/CHANGELOG b/CHANGELOG
index 949cd456d5..e6958ccb19 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -3,6 +3,8 @@ git-annex (7.20190820) UNRELEASED; urgency=medium
   * info: When file matching options are specified when getting
     info of something other than a directory, they won't have any effect,
     so error out to avoid confusion.
+  * assistant: When creating a new repository, no longer use direct
+    mode, instead use v7 adjusted branches with annex.thin.
 
  -- Joey Hess <id@joeyh.name>  Sat, 24 Aug 2019 12:54:35 -0400
 
diff --git a/doc/todo/v7_path_toward_default.mdwn b/doc/todo/v7_path_toward_default.mdwn
index 7447231861..48c8e75204 100644
--- a/doc/todo/v7_path_toward_default.mdwn
+++ b/doc/todo/v7_path_toward_default.mdwn
@@ -4,12 +4,11 @@ Tracking v7 progress toward becoming the default.
 
 done
 
-## step 2: default for new direct mode repositories
+## step 2: default for new repositories that used to use direct mode
 
 Done when using the command line to init in a crippled filesystem. 
 
-The assistant still creates direct mode repositories though,
-and will need to enable annex.thin and adjusted unlocked branch instead.
+Done when using the assistant.
 
 ## step 3: auto-upgrade from direct mode