diff --git a/src/core/manager.c b/src/core/manager.c
index ccc3e254fd..be44ab3778 100644
--- a/src/core/manager.c
+++ b/src/core/manager.c
@@ -1336,13 +1336,6 @@ int manager_startup(Manager *m, FILE *serialization, FDSet *fds) {
         if (r < 0)
                 return r;
 
-        /* Make sure the transient directory always exists, so that it remains
-         * in the search path */
-        r = mkdir_p_label(m->lookup_paths.transient, 0755);
-        if (r < 0)
-                return log_error_errno(r, "Failed to create transient generator directory \"%s\": %m",
-                                       m->lookup_paths.transient);
-
         dual_timestamp_get(m->timestamps + MANAGER_TIMESTAMP_GENERATORS_START);
         r = manager_run_generators(m);
         dual_timestamp_get(m->timestamps + MANAGER_TIMESTAMP_GENERATORS_FINISH);
diff --git a/src/core/unit.c b/src/core/unit.c
index 4d0cd6e65d..a12d24b90b 100644
--- a/src/core/unit.c
+++ b/src/core/unit.c
@@ -4285,7 +4285,7 @@ int unit_write_setting(Unit *u, UnitWriteFlags flags, const char *name, const ch
         if (r < 0)
                 return r;
 
-        (void) mkdir_p(p, 0755);
+        (void) mkdir_p_label(p, 0755);
         r = write_string_file_atomic_label(q, wrapped);
         if (r < 0)
                 return r;
@@ -4333,6 +4333,8 @@ int unit_make_transient(Unit *u) {
         if (!UNIT_VTABLE(u)->can_transient)
                 return -EOPNOTSUPP;
 
+        (void) mkdir_p_label(u->manager->lookup_paths.transient, 0755);
+
         path = strjoin(u->manager->lookup_paths.transient, "/", u->id);
         if (!path)
                 return -ENOMEM;
diff --git a/src/shared/path-lookup.c b/src/shared/path-lookup.c
index b40887bfbd..57e0757529 100644
--- a/src/shared/path-lookup.c
+++ b/src/shared/path-lookup.c
@@ -736,6 +736,14 @@ int lookup_paths_reduce(LookupPaths *p) {
                 struct stat st;
                 unsigned k;
 
+                /* Never strip the transient and control directories from the path */
+                if (path_equal_ptr(p->search_path[c], p->transient) ||
+                    path_equal_ptr(p->search_path[c], p->persistent_control) ||
+                    path_equal_ptr(p->search_path[c], p->runtime_control)) {
+                        c++;
+                        continue;
+                }
+
                 if (p->root_dir)
                         r = lstat(p->search_path[c], &st);
                 else