diff --git a/configure.ac b/configure.ac
index b5e4049..e01e124 100644
--- a/configure.ac
+++ b/configure.ac
@@ -614,6 +614,36 @@ if test x"$rsync_cv_have_fallocate" = x"yes"; then
     AC_DEFINE(HAVE_FALLOCATE, 1, [Define to 1 if you have the fallocate function and it compiles and links without error])
 fi
 
+AC_MSG_CHECKING([for FALLOC_FL_PUNCH_HOLE])
+AC_PREPROC_IFELSE([AC_LANG_SOURCE([[
+        #define _GNU_SOURCE 1
+        #include <linux/falloc.h>
+        #ifndef FALLOC_FL_PUNCH_HOLE
+        #error FALLOC_FL_PUNCH_HOLE is missing
+        #endif
+    ]])], [
+        AC_MSG_RESULT([yes])
+        AC_DEFINE([HAVE_FALLOC_FL_PUNCH_HOLE], [1], [Define if FALLOC_FL_PUNCH_HOLE is available.])
+    ], [
+        AC_MSG_RESULT([no])
+    ]
+)
+
+AC_MSG_CHECKING([for FALLOC_FL_ZERO_RANGE])
+AC_PREPROC_IFELSE([AC_LANG_SOURCE([[
+        #define _GNU_SOURCE 1
+        #include <linux/falloc.h>
+        #ifndef FALLOC_FL_ZERO_RANGE
+        #error FALLOC_FL_ZERO_RANGE is missing
+        #endif
+    ]])], [
+        AC_MSG_RESULT([yes])
+        AC_DEFINE([HAVE_FALLOC_FL_ZERO_RANGE], [1], [Define if FALLOC_FL_ZERO_RANGE is available.])
+    ], [
+        AC_MSG_RESULT([no])
+    ]
+)
+
 AC_CACHE_CHECK([for SYS_fallocate],rsync_cv_have_sys_fallocate,[
 AC_COMPILE_IFELSE([AC_LANG_PROGRAM([[#include <sys/syscall.h>
 #include <sys/types.h>]], [[syscall(SYS_fallocate, 0, 0, (loff_t)0, (loff_t)0);]])],[rsync_cv_have_sys_fallocate=yes],[rsync_cv_have_sys_fallocate=no])])
diff --git a/fileio.c b/fileio.c
index 70e079d..7b9caf7 100644
--- a/fileio.c
+++ b/fileio.c
@@ -34,8 +34,11 @@
 #define ALIGNED_LENGTH(len) ((((len) - 1) | (ALIGN_BOUNDRY-1)) + 1)
 
 extern int sparse_files;
+extern int inplace;
+extern int preallocate_files;
 
 static OFF_T sparse_seek = 0;
+static OFF_T sparse_last_write = 0;
 
 int sparse_end(int f, OFF_T size)
 {
@@ -63,8 +66,9 @@ int sparse_end(int f, OFF_T size)
 	return ret;
 }
 
-
-static int write_sparse(int f, char *buf, int len)
+/* Note that the offset is just the caller letting us know where
+ * the current file position is in the file. */
+static int write_sparse(int f, OFF_T offset, const char *buf, int len)
 {
 	int l1 = 0, l2 = 0;
 	int ret;
@@ -77,9 +81,14 @@ static int write_sparse(int f, char *buf, int len)
 	if (l1 == len)
 		return len;
 
-	if (sparse_seek)
-		do_lseek(f, sparse_seek, SEEK_CUR);
+	if (sparse_seek) {
+		if (!inplace && !preallocate_files)
+			do_lseek(f, sparse_seek, SEEK_CUR);
+		else if (do_punch_hole(f, sparse_last_write, sparse_seek) < 0)
+			return -1;
+	}
 	sparse_seek = l2;
+	sparse_last_write = offset + len - l2;
 
 	while ((ret = write(f, buf + l1, len - (l1+l2))) <= 0) {
 		if (ret < 0 && errno == EINTR)
@@ -121,9 +130,11 @@ int flush_write_file(int f)
 
 /*
  * write_file does not allow incomplete writes.  It loops internally
- * until len bytes are written or errno is set.
+ * until len bytes are written or errno is set.  Note that "offset"
+ * cannot be used to set a different location in the file -- it is
+ * just used to interface with write_sparse().
  */
-int write_file(int f, char *buf, int len)
+int write_file(int f, OFF_T offset, char *buf, int len)
 {
 	int ret = 0;
 
@@ -131,7 +142,7 @@ int write_file(int f, char *buf, int len)
 		int r1;
 		if (sparse_files > 0) {
 			int len1 = MIN(len, SPARSE_WRITE_SIZE);
-			r1 = write_sparse(f, buf, len1);
+			r1 = write_sparse(f, offset, buf, len1);
 		} else {
 			if (!wf_writeBuf) {
 				wf_writeBufSize = WRITE_SIZE * 8;
diff --git a/options.c b/options.c
index 308443b..85b1f08 100644
--- a/options.c
+++ b/options.c
@@ -2237,13 +2237,15 @@ int parse_arguments(int *argc_p, const char ***argv_p)
 			bwlimit_writemax = 512;
 	}
 
+#if !defined HAVE_FALLOCATE || !defined HAVE_FALLOC_FL_PUNCH_HOLE
 	if (sparse_files && inplace) {
 		/* Note: we don't check for this below, because --append is
 		 * OK with --sparse (as long as redos are handled right). */
 		snprintf(err_buf, sizeof err_buf,
-			 "--sparse cannot be used with --inplace\n");
+			 "This rsync cannot combine --sparse with --inplace\n");
 		return 0;
 	}
+#endif
 
 	if (append_mode) {
 		if (whole_file > 0) {
diff --git a/receiver.c b/receiver.c
index f9b97dd..d702603 100644
--- a/receiver.c
+++ b/receiver.c
@@ -318,7 +318,7 @@ static int receive_data(int f_in, char *fname_r, int fd_r, OFF_T size_r,
 
 			sum_update(data, i);
 
-			if (fd != -1 && write_file(fd,data,i) != i)
+			if (fd != -1 && write_file(fd, offset, data, i) != i)
 				goto report_write_error;
 			offset += i;
 			continue;
@@ -362,7 +362,7 @@ static int receive_data(int f_in, char *fname_r, int fd_r, OFF_T size_r,
 				continue;
 			}
 		}
-		if (fd != -1 && map && write_file(fd, map, len) != (int)len)
+		if (fd != -1 && map && write_file(fd, offset, map, len) != (int)len)
 			goto report_write_error;
 		offset += len;
 	}
diff --git a/syscall.c b/syscall.c
index ecca2f1..ae5eeff 100644
--- a/syscall.c
+++ b/syscall.c
@@ -444,6 +444,40 @@ int do_fallocate(int fd, OFF_T offset, OFF_T length)
 }
 #endif
 
+/* NOTE: the offset must be the same as the current file position! */
+int do_punch_hole(int fd, OFF_T offset, int len)
+{
+#ifdef HAVE_FALLOCATE
+# ifdef HAVE_FALLOC_FL_PUNCH_HOLE
+	if (fallocate(fd, FALLOC_FL_PUNCH_HOLE | FALLOC_FL_KEEP_SIZE, offset, len) == 0) {
+		do_lseek(fd, offset + len, SEEK_SET);
+		return 0;
+	}
+# endif
+# ifdef HAVE_FALLOC_FL_ZERO_RANGE
+	if (fallocate(fd, FALLOC_FL_ZERO_RANGE, offset, len) == 0) {
+		do_lseek(fd, offset + len, SEEK_SET);
+		return 0;
+	}
+# endif
+#endif
+	{
+		char zeros[4096];
+		memset(zeros, 0, sizeof zeros);
+		while (len > 0) {
+			int chunk = len > (int)sizeof zeros ? (int)sizeof zeros : len;
+			int wrote = write(fd, zeros, chunk);
+			if (wrote <= 0) {
+				if (wrote < 0 && errno == EINTR)
+					continue;
+				return -1;
+			}
+			len -= wrote;
+		}
+	}
+	return 0;
+}
+
 int do_open_nofollow(const char *pathname, int flags)
 {
 #ifndef O_NOFOLLOW