diff --git a/.changes/next-release/bugfix-S3TransferManager-8858.json b/.changes/next-release/bugfix-S3TransferManager-8858.json
new file mode 100644
index 00000000000..2c77bf9c132
--- /dev/null
+++ b/.changes/next-release/bugfix-S3TransferManager-8858.json
@@ -0,0 +1,6 @@
+{
+    "type": "bugfix",
+    "category": "S3 Transfer Manager",
+    "contributor": "",
+    "description": "Fix a resource leak in `downloadDirectory` where cancelling the download could still allow file transfers that arrive late to recreate the destination directory. Added a guard in `DownloadDirectoryHelper` to skip file downloads after the operation is cancelled."
+}
diff --git a/services-custom/s3-transfer-manager/src/main/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelper.java b/services-custom/s3-transfer-manager/src/main/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelper.java
index 69f59473d06..3d22103c4a7 100644
--- a/services-custom/s3-transfer-manager/src/main/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelper.java
+++ b/services-custom/s3-transfer-manager/src/main/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelper.java
@@ -106,7 +106,7 @@ private void doDownloadDirectory(CompletableFuture<CompletedDirectoryDownload> r
 
         CompletableFuture<Void> allOfFutures = new CompletableFuture<>();
         AsyncBufferingSubscriber<S3Object> asyncBufferingSubscriber =
-            new AsyncBufferingSubscriber<>(downloadSingleFile(downloadDirectoryRequest, request,
+            new AsyncBufferingSubscriber<>(downloadSingleFile(returnFuture, downloadDirectoryRequest, request,
                                                               failedFileDownloads),
                                            allOfFutures,
                                            transferConfiguration.option(
@@ -129,11 +129,13 @@ private void doDownloadDirectory(CompletableFuture<CompletedDirectoryDownload> r
     }
 
     private Function<S3Object, CompletableFuture<?>> downloadSingleFile(
+        CompletableFuture<CompletedDirectoryDownload> returnFuture,
         DownloadDirectoryRequest downloadDirectoryRequest,
         ListObjectsV2Request listRequest,
         Queue<FailedFileDownload> failedFileDownloads) {
 
-        return s3Object -> doDownloadSingleFile(downloadDirectoryRequest,
+        return s3Object -> doDownloadSingleFile(returnFuture,
+                                            downloadDirectoryRequest,
                                             failedFileDownloads,
                                             listRequest,
                                             s3Object);
@@ -158,10 +160,17 @@ private void validatePath(Path destinationDirectory, Path targetPath, String key
         }
     }
 
-    private CompletableFuture<CompletedFileDownload> doDownloadSingleFile(DownloadDirectoryRequest downloadDirectoryRequest,
-                                                                          Collection<FailedFileDownload> failedFileDownloads,
-                                                                          ListObjectsV2Request listRequest,
-                                                                          S3Object s3Object) {
+    private CompletableFuture<CompletedFileDownload> doDownloadSingleFile(
+        CompletableFuture<CompletedDirectoryDownload> returnFuture,
+        DownloadDirectoryRequest downloadDirectoryRequest,
+        Collection<FailedFileDownload> failedFileDownloads,
+        ListObjectsV2Request listRequest,
+        S3Object s3Object) {
+
+        if (returnFuture.isDone()) {
+            return CompletableFutureUtils.failedFuture(
+                SdkClientException.create("Download was cancelled before file could be started"));
+        }
 
         Path destinationPath = determineDestinationPath(downloadDirectoryRequest, listRequest, s3Object);
 
diff --git a/services-custom/s3-transfer-manager/src/test/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelperTest.java b/services-custom/s3-transfer-manager/src/test/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelperTest.java
index dc8536e8fc6..ac3bc291af1 100644
--- a/services-custom/s3-transfer-manager/src/test/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelperTest.java
+++ b/services-custom/s3-transfer-manager/src/test/java/software/amazon/awssdk/transfer/s3/internal/DownloadDirectoryHelperTest.java
@@ -39,6 +39,7 @@
 import java.util.UUID;
 import java.util.concurrent.CancellationException;
 import java.util.concurrent.CompletableFuture;
+import java.util.concurrent.CountDownLatch;
 import java.util.concurrent.Phaser;
 import java.util.concurrent.TimeUnit;
 import java.util.concurrent.atomic.AtomicInteger;
@@ -55,6 +56,7 @@
 import org.junit.jupiter.params.provider.MethodSource;
 import org.junit.jupiter.params.provider.ValueSource;
 import org.mockito.ArgumentCaptor;
+import software.amazon.awssdk.core.async.SdkPublisher;
 import software.amazon.awssdk.core.exception.SdkClientException;
 import software.amazon.awssdk.services.s3.model.EncodingType;
 import software.amazon.awssdk.services.s3.model.GetObjectRequest;
@@ -72,6 +74,7 @@
 import software.amazon.awssdk.transfer.s3.model.FileDownload;
 import software.amazon.awssdk.transfer.s3.progress.LoggingTransferListener;
 import software.amazon.awssdk.transfer.s3.progress.TransferListener;
+import software.amazon.awssdk.utils.async.SimplePublisher;
 
 public class DownloadDirectoryHelperTest {
     private static final String DIRECTORY_NAME = "test";
@@ -197,13 +200,21 @@ void downloadDirectory_cancel_shouldCancelAllFutures() throws Exception {
         CompletableFuture<CompletedFileDownload> future2 = new CompletableFuture<>();
         FileDownload fileDownload2 = newDownload(future2);
 
-        when(singleDownloadFunction.apply(any(DownloadFileRequest.class))).thenReturn(fileDownload, fileDownload2);
+        AtomicInteger callCount = new AtomicInteger(0);
+        CountDownLatch bothStarted = new CountDownLatch(2);
+        when(singleDownloadFunction.apply(any(DownloadFileRequest.class))).thenAnswer(invocation -> {
+            bothStarted.countDown();
+            return callCount.incrementAndGet() == 1 ? fileDownload : fileDownload2;
+        });
 
         DirectoryDownload downloadDirectory =
             downloadDirectoryHelper.downloadDirectory(DownloadDirectoryRequest.builder()
                                                                               .destination(directory)
                                                                               .bucket("bucket")
                                                                               .build());
+
+        assertThat(bothStarted.await(5, TimeUnit.SECONDS)).isTrue();
+
         downloadDirectory.completionFuture().cancel(true);
 
         assertThatThrownBy(() -> future.get(1, TimeUnit.SECONDS))
@@ -567,6 +578,34 @@ private FileDownload newFailedDownload(SdkClientException exception) {
         return fileDownload2;
     }
 
+    @Test
+    void downloadDirectory_cancelledFuture_shouldNotCreateDirectories() throws Exception {
+        SimplePublisher<S3Object> publisher = new SimplePublisher<>();
+        when(listObjectsHelper.listS3ObjectsRecursively(any(ListObjectsV2Request.class)))
+            .thenReturn(SdkPublisher.adapt(publisher));
+
+        DownloadDirectoryHelper helper = new DownloadDirectoryHelper(
+            TransferManagerConfiguration.builder().build(),
+            listObjectsHelper,
+            singleDownloadFunction);
+
+        DirectoryDownload directoryDownload = helper.downloadDirectory(
+            DownloadDirectoryRequest.builder()
+                                    .destination(directory)
+                                    .bucket("bucket")
+                                    .build());
+
+        directoryDownload.completionFuture().cancel(true);
+
+        publisher.send(S3Object.builder().key("subdir/file.txt").size(100L).build());
+        publisher.complete();
+
+        Thread.sleep(200);
+
+        Path subdir = directory.resolve("subdir");
+        assertThat(Files.exists(subdir)).isFalse();
+    }
+
     private FileDownload newDownload(CompletableFuture<CompletedFileDownload> future) {
         return new DefaultFileDownload(future,
                                        new DefaultTransferProgress(DefaultTransferProgressSnapshot.builder()