diff --git a/lisp/vc/diff.el b/lisp/vc/diff.el
index 1aa4f87d1ea..bb509d0d4e3 100644
--- a/lisp/vc/diff.el
+++ b/lisp/vc/diff.el
@@ -188,9 +188,10 @@ diff-no-select
                                   (list (or old-alt old)
                                         (or new-alt new)))))
 		     " "))
-	 (thisdir (if (file-exists-p default-directory)
-                      default-directory
-                    (make-temp-file "emacs-diff" t))))
+         (use-temp-dir (not (file-exists-p default-directory)))
+         (thisdir (if use-temp-dir
+                      (make-temp-file "emacs-diff" t)
+                    default-directory)))
     (with-current-buffer buf
       (setq buffer-read-only t)
       (buffer-disable-undo (current-buffer))
@@ -220,6 +221,8 @@ diff-no-select
 	   (call-process shell-file-name nil buf nil
 			 shell-command-switch command)
            old-alt new-alt))))
+    (when use-temp-dir
+      (delete-directory thisdir t))
     buf))
 
 (defun diff-process-filter (proc string)