diff --git a/IPython/utils/io.py b/IPython/utils/io.py
index df1e39e..3d236eb 100644
--- a/IPython/utils/io.py
+++ b/IPython/utils/io.py
@@ -267,17 +267,18 @@ def atomic_writing(path, text=True, encoding='utf-8', **kwargs):
         path = os.path.join(os.path.dirname(path), os.readlink(path))
 
     dirname, basename = os.path.split(path)
-    handle, tmp_path = tempfile.mkstemp(prefix=basename, dir=dirname)
+    tmp_dir = tempfile.mkdtemp(prefix=basename, dir=dirname)
+    tmp_path = os.path.join(tmp_dir, basename)
     if text:
-        fileobj = io.open(handle, 'w', encoding=encoding, **kwargs)
+        fileobj = io.open(tmp_path, 'w', encoding=encoding, **kwargs)
     else:
-        fileobj = io.open(handle, 'wb', **kwargs)
+        fileobj = io.open(tmp_path, 'wb', **kwargs)
 
     try:
         yield fileobj
     except:
         fileobj.close()
-        os.remove(tmp_path)
+        shutil.rmtree(tmp_dir)
         raise
 
     # Flush to disk
@@ -299,6 +300,7 @@ def atomic_writing(path, text=True, encoding='utf-8', **kwargs):
         os.remove(path)
 
     os.rename(tmp_path, path)
+    shutil.rmtree(tmp_dir)
 
 
 def raw_print(*args, **kw):
diff --git a/IPython/utils/tests/test_io.py b/IPython/utils/tests/test_io.py
index 023c964..aa00a88 100644
--- a/IPython/utils/tests/test_io.py
+++ b/IPython/utils/tests/test_io.py
@@ -1,16 +1,9 @@
 # encoding: utf-8
 """Tests for io.py"""
 
-#-----------------------------------------------------------------------------
-#  Copyright (C) 2008-2011  The IPython Development Team
-#
-#  Distributed under the terms of the BSD License.  The full license is in
-#  the file COPYING, distributed as part of this software.
-#-----------------------------------------------------------------------------
-
-#-----------------------------------------------------------------------------
-# Imports
-#-----------------------------------------------------------------------------
+# Copyright (c) IPython Development Team.
+# Distributed under the terms of the Modified BSD License.
+
 from __future__ import print_function
 from __future__ import absolute_import
 
@@ -24,7 +17,7 @@ import unittest
 
 import nose.tools as nt
 
-from IPython.testing.decorators import skipif
+from IPython.testing.decorators import skipif, skip_win32
 from IPython.utils.io import (Tee, capture_output, unicode_std_stream,
                               atomic_writing,
                               )
@@ -36,10 +29,6 @@ if PY3:
 else:
     from StringIO import StringIO
 
-#-----------------------------------------------------------------------------
-# Tests
-#-----------------------------------------------------------------------------
-
 
 def test_tee_simple():
     "Very simple check with stdout only"
@@ -177,6 +166,33 @@ def test_atomic_writing():
             with stdlib_io.open(f1, 'r') as f:
                 nt.assert_equal(f.read(), u'written from symlink')
 
+def _save_umask():
+    global umask
+    umask = os.umask(0)
+    os.umask(umask)
+
+def _restore_umask():
+    os.umask(umask)
+
+@skip_win32
+@nt.with_setup(_save_umask, _restore_umask)
+def test_atomic_writing_umask():
+    with TemporaryDirectory() as td:
+        os.umask(0o022)
+        f1 = os.path.join(td, '1')
+        with atomic_writing(f1) as f:
+            f.write(u'1')
+        mode = stat.S_IMODE(os.stat(f1).st_mode)
+        nt.assert_equal(mode, 0o644, '{:o} != 644'.format(mode))
+
+        os.umask(0o057)
+        f2 = os.path.join(td, '2')
+        with atomic_writing(f2) as f:
+            f.write(u'2')
+        mode = stat.S_IMODE(os.stat(f2).st_mode)
+        nt.assert_equal(mode, 0o620, '{:o} != 620'.format(mode))
+
+
 def test_atomic_writing_newlines():
     with TemporaryDirectory() as td:
         path = os.path.join(td, 'testfile')