diff --git a/endpoint/endpoint.go b/endpoint/endpoint.go
index 96ad595..e06bfc3 100644
--- a/endpoint/endpoint.go
+++ b/endpoint/endpoint.go
@@ -679,7 +679,7 @@ func (s *Receiver) Receive(ctx context.Context, req *pdu.ReceiveReq, receive io.
 		f := zfs.NewDatasetPathForest()
 		f.Add(lp)
 		getLogger(ctx).Debug("begin tree-walk")
-		f.WalkTopDown(func(v zfs.DatasetPathVisit) (visitChildTree bool) {
+		f.WalkTopDown(func(v *zfs.DatasetPathVisit) (visitChildTree bool) {
 			if v.Path.Equal(lp) {
 				return false
 			}
@@ -707,7 +707,7 @@ func (s *Receiver) Receive(ctx context.Context, req *pdu.ReceiveReq, receive io.
 				}
 				l := getLogger(ctx).WithField("placeholder_fs", v.Path)
 				l.Debug("create placeholder filesystem")
-				err := zfs.ZFSCreatePlaceholderFilesystem(ctx, v.Path)
+				err := zfs.ZFSCreatePlaceholderFilesystem(ctx, v.Path, v.Parent.Path)
 				if err != nil {
 					l.WithError(err).Error("cannot create placeholder filesystem")
 					visitErr = err
diff --git a/zfs/datasetpath_visitor.go b/zfs/datasetpath_visitor.go
index 89a7b2a..4a2c342 100644
--- a/zfs/datasetpath_visitor.go
+++ b/zfs/datasetpath_visitor.go
@@ -33,9 +33,10 @@ type DatasetPathVisit struct {
 	Path *DatasetPath
 	// If true, the dataset referenced by Path was not in the list of datasets to traverse
 	FilledIn bool
+	Parent   *DatasetPathVisit
 }
 
-type DatasetPathsVisitor func(v DatasetPathVisit) (visitChildTree bool)
+type DatasetPathsVisitor func(v *DatasetPathVisit) (visitChildTree bool)
 
 // Traverse a list of DatasetPaths top down, i.e. given a set of datasets with same
 // path prefix, those with shorter prefix are traversed first.
@@ -44,7 +45,11 @@ type DatasetPathsVisitor func(v DatasetPathVisit) (visitChildTree bool)
 func (f *DatasetPathForest) WalkTopDown(visitor DatasetPathsVisitor) {
 
 	for _, r := range f.roots {
-		r.WalkTopDown([]string{}, visitor)
+		r.WalkTopDown(&DatasetPathVisit{
+			Path:     &DatasetPath{nil},
+			FilledIn: true,
+			Parent:   nil,
+		}, visitor)
 	}
 
 }
@@ -88,19 +93,21 @@ func (t *datasetPathTree) Add(p []string) bool {
 
 }
 
-func (t *datasetPathTree) WalkTopDown(parent []string, visitor DatasetPathsVisitor) {
+func (t *datasetPathTree) WalkTopDown(parent *DatasetPathVisit, visitor DatasetPathsVisitor) {
 
-	this := append(parent, t.Component)
+	thisVisitPath := parent.Path.Copy()
+	thisVisitPath.Extend(&DatasetPath{[]string{t.Component}})
 
-	thisVisit := DatasetPathVisit{
-		&DatasetPath{this},
+	thisVisit := &DatasetPathVisit{
+		thisVisitPath,
 		t.FilledIn,
+		parent,
 	}
 	visitChildTree := visitor(thisVisit)
 
 	if visitChildTree {
 		for _, c := range t.Children {
-			c.WalkTopDown(this, visitor)
+			c.WalkTopDown(thisVisit, visitor)
 		}
 	}
 
diff --git a/zfs/datasetpath_visitor_test.go b/zfs/datasetpath_visitor_test.go
index b9e5734..c2c6181 100644
--- a/zfs/datasetpath_visitor_test.go
+++ b/zfs/datasetpath_visitor_test.go
@@ -28,8 +28,8 @@ func makeVisitRecorder() (v DatasetPathsVisitor, rec *visitRecorder) {
 	rec = &visitRecorder{
 		visits: make([]DatasetPathVisit, 0),
 	}
-	v = func(v DatasetPathVisit) bool {
-		rec.visits = append(rec.visits, v)
+	v = func(v *DatasetPathVisit) bool {
+		rec.visits = append(rec.visits, *v)
 		return true
 	}
 	return
@@ -43,6 +43,27 @@ func buildForest(paths []*DatasetPath) (f *DatasetPathForest) {
 	return
 }
 
+type expectedDatasetPathVisit struct {
+	expectPath   *DatasetPath
+	expectFillIn bool
+}
+
+func (e *expectedDatasetPathVisit) AssertEqual(t *testing.T, actual DatasetPathVisit) {
+	assert.Equal(t, e.expectPath, actual.Path)
+	assert.Equal(t, e.expectFillIn, actual.FilledIn)
+	if actual.Parent != nil {
+		assert.Equal(t, actual.Parent.Path.Length()+1, e.expectPath.Length())
+		assert.True(t, e.expectPath.HasPrefix(actual.Parent.Path))
+	}
+}
+
+func expectedDatasetPathVisits(t *testing.T, expected []expectedDatasetPathVisit, actual []DatasetPathVisit) {
+	assert.Equal(t, len(expected), len(actual))
+	for i := range expected {
+		expected[i].AssertEqual(t, actual[i])
+	}
+}
+
 func TestDatasetPathForestWalkTopDown(t *testing.T) {
 
 	paths := []*DatasetPath{
@@ -56,7 +77,7 @@ func TestDatasetPathForestWalkTopDown(t *testing.T) {
 
 	buildForest(paths).WalkTopDown(v)
 
-	expectedVisits := []DatasetPathVisit{
+	expectedVisits := []expectedDatasetPathVisit{
 		{toDatasetPath("pool1"), false},
 		{toDatasetPath("pool1/foo"), true},
 		{toDatasetPath("pool1/foo/bar"), false},
@@ -65,8 +86,7 @@ func TestDatasetPathForestWalkTopDown(t *testing.T) {
 		{toDatasetPath("pool2/test"), true},
 		{toDatasetPath("pool2/test/bar"), false},
 	}
-	assert.Equal(t, expectedVisits, rec.visits)
-
+	expectedDatasetPathVisits(t, expectedVisits, rec.visits)
 }
 
 func TestDatasetPathWalkTopDownWorksUnordered(t *testing.T) {
@@ -82,7 +102,7 @@ func TestDatasetPathWalkTopDownWorksUnordered(t *testing.T) {
 
 	buildForest(paths).WalkTopDown(v)
 
-	expectedVisits := []DatasetPathVisit{
+	expectedVisits := []expectedDatasetPathVisit{
 		{toDatasetPath("pool1"), false},
 		{toDatasetPath("pool1/foo"), true},
 		{toDatasetPath("pool1/foo/bar"), false},
@@ -91,6 +111,6 @@ func TestDatasetPathWalkTopDownWorksUnordered(t *testing.T) {
 		{toDatasetPath("pool1/bang/baz"), false},
 	}
 
-	assert.Equal(t, expectedVisits, rec.visits)
+	expectedDatasetPathVisits(t, expectedVisits, rec.visits)
 
 }
diff --git a/zfs/placeholder.go b/zfs/placeholder.go
index 0ffffa8..00700d6 100644
--- a/zfs/placeholder.go
+++ b/zfs/placeholder.go
@@ -6,6 +6,7 @@ import (
 	"encoding/hex"
 	"fmt"
 
+	"github.com/pkg/errors"
 	"github.com/zrepl/zrepl/zfs/zfscmd"
 )
 
@@ -78,14 +79,23 @@ func ZFSGetFilesystemPlaceholderState(ctx context.Context, p *DatasetPath) (stat
 	return state, nil
 }
 
-func ZFSCreatePlaceholderFilesystem(ctx context.Context, p *DatasetPath) (err error) {
-	if p.Length() == 1 {
-		return fmt.Errorf("cannot create %q: pools cannot be created with zfs create", p.ToString())
+func ZFSCreatePlaceholderFilesystem(ctx context.Context, fs *DatasetPath, parent *DatasetPath) (err error) {
+	if fs.Length() == 1 {
+		return fmt.Errorf("cannot create %q: pools cannot be created with zfs create", fs.ToString())
 	}
-	cmd := zfscmd.CommandContext(ctx, ZFS_BINARY, "create",
+
+	cmdline := []string{
+		"create",
 		"-o", fmt.Sprintf("%s=%s", PlaceholderPropertyName, placeholderPropertyOn),
 		"-o", "mountpoint=none",
-		p.ToString())
+	}
+	if parentEncrypted, err := ZFSGetEncryptionEnabled(ctx, parent.ToString()); err != nil {
+		return errors.Wrap(err, "cannot determine encryption support")
+	} else if parentEncrypted {
+		cmdline = append(cmdline, "-o", "encryption=off")
+	}
+	cmdline = append(cmdline, fs.ToString())
+	cmd := zfscmd.CommandContext(ctx, ZFS_BINARY, cmdline...)
 
 	stdio, err := cmd.CombinedOutput()
 	if err != nil {