diff --git a/Annex/Perms.hs b/Annex/Perms.hs
index 73fa6172f1..011ac8b085 100644
--- a/Annex/Perms.hs
+++ b/Annex/Perms.hs
@@ -106,13 +106,16 @@ annexFileMode = withShared $ return . go
 	go _ = stdFileMode
 	sharedmode = combineModes groupSharedModes
 
-{- Creates a directory inside the gitAnnexDir, creating any parent
- - directories up to and including the gitAnnexDir.
+{- Creates a directory inside the gitAnnexDir (or possibly the dbdir), 
+ - creating any parent directories up to and including the gitAnnexDir.
  - Makes directories with appropriate permissions. -}
 createAnnexDirectory :: RawFilePath -> Annex ()
 createAnnexDirectory dir = do
 	top <- parentDir <$> fromRepo gitAnnexDir
-	createDirectoryUnder' [top] dir createdir
+	tops <- annexDbDir <$> Annex.getGitConfig >>= return . \case
+		Nothing -> [top]
+		Just dbdir -> [top, parentDir dbdir]
+	createDirectoryUnder' tops dir createdir
   where
 	createdir p = do
 		liftIO $ R.createDirectory p
diff --git a/Database/Init.hs b/Database/Init.hs
index 2b63a38513..0ccde7b19f 100644
--- a/Database/Init.hs
+++ b/Database/Init.hs
@@ -36,11 +36,12 @@ initDb db migration = do
 	let tmpdb = tmpdbdir P.</> "db"
 	let tdb = T.pack (fromRawFilePath tmpdb)
 	gc <- Annex.getGitConfig
-	top <- case annexDbDir gc of
-		Just topdbdir -> pure $ parentDir $ topdbdir
-		Nothing -> parentDir <$> fromRepo gitAnnexDir
+	top <- parentDir <$> fromRepo gitAnnexDir
+	let tops = case annexDbDir gc of
+		Just topdbdir -> [top, parentDir topdbdir]
+		Nothing -> [top]
 	liftIO $ do
-		createDirectoryUnder [top] tmpdbdir
+		createDirectoryUnder tops tmpdbdir
 		runSqliteInfo (enableWAL tdb) migration
 	setAnnexDirPerm tmpdbdir
 	-- Work around sqlite bug that prevents it from honoring
diff --git a/doc/git-annex.mdwn b/doc/git-annex.mdwn
index 3e8e4d138c..a401596ef3 100644
--- a/doc/git-annex.mdwn
+++ b/doc/git-annex.mdwn
@@ -1230,7 +1230,7 @@ repository, using [[git-annex-config]]. See its man page for a list.)
 
 * `annex.dbdir`
 
-  Set to a directory where git-annex should store its sqlite databases.
+  The directory where git-annex should store its sqlite databases.
   The default location is inside `.git/annex/`. 
 
   Certian filesystems, such as cifs, may not support locking operations