diff --git a/src/client/dfuse/ops/readdir.c b/src/client/dfuse/ops/readdir.c
index 3b7cabf01be..10ea454fd42 100644
--- a/src/client/dfuse/ops/readdir.c
+++ b/src/client/dfuse/ops/readdir.c
@@ -133,7 +133,7 @@ dfuse_dre_drop(struct dfuse_info *dfuse_info, struct dfuse_obj_hdl *oh)
 	struct dfuse_readdir_hdl *hdl;
 	struct dfuse_readdir_c   *drc, *next;
 	uint32_t                  oldref;
-	off_t                     expected_offset = 2;
+	off_t                     next_offset = 0;
 
 	DFUSE_TRA_DEBUG(oh, "Dropping ref on %p", oh->doh_rd);
 
@@ -161,10 +161,11 @@ dfuse_dre_drop(struct dfuse_info *dfuse_info, struct dfuse_obj_hdl *oh)
 		oh->doh_ie->ie_rd_hdl = NULL;
 
 	d_list_for_each_entry_safe(drc, next, &hdl->drh_cache_list, drc_list) {
-		D_ASSERT(drc->drc_offset == expected_offset);
-		D_ASSERT(drc->drc_next_offset == expected_offset + 1 ||
-			 drc->drc_next_offset == READDIR_EOD);
-		expected_offset = drc->drc_next_offset;
+		/** Verify offset/next_offset are consistent in the entry cache list */
+		D_ASSERTF(next_offset == 0 || next_offset == drc->drc_offset,
+			  "Inconsistent offset list %#lx prev next %#lx " DF_DE,
+			  drc->drc_offset, next_offset, DP_DE(drc->drc_name));
+		next_offset = drc->drc_next_offset;
 		if (drc->drc_rlink)
 			d_hash_rec_decref(&dfuse_info->dpi_iet, drc->drc_rlink);
 		D_FREE(drc);
@@ -472,7 +473,7 @@ dfuse_do_readdir(struct dfuse_info *dfuse_info, fuse_req_t req, struct dfuse_obj
 
 					if (rc != 0) {
 						DFUSE_TRA_DEBUG(oh, "Problem finding file %d", rc);
-						D_GOTO(reply, 0);
+						D_GOTO(reply, rc);
 					}
 					/* Check oid is the same! */
 
@@ -689,7 +690,8 @@ dfuse_do_readdir(struct dfuse_info *dfuse_info, fuse_req_t req, struct dfuse_obj
 			if (rc == ENOENT) {
 				DFUSE_TRA_DEBUG(oh, "File does not exist");
 				D_FREE(drc);
-				continue;
+				/** legitimate race */
+				D_GOTO(next, rc = 0);
 			} else if (rc != 0) {
 				DFUSE_TRA_DEBUG(oh, "Problem finding file %d", rc);
 				D_FREE(drc);
@@ -759,6 +761,12 @@ dfuse_do_readdir(struct dfuse_info *dfuse_info, fuse_req_t req, struct dfuse_obj
 			}
 
 			if (drc) {
+				if (oh->doh_rd_nextc != NULL)
+					/**
+					 * Fix next offset of previous cache entry in case some
+					 * dre entries were skipped (e.g. failed stat call).
+					 */
+					oh->doh_rd_nextc->drc_next_offset = drc->drc_offset;
 				oh->doh_rd_nextc = drc;
 				DFUSE_TRA_DEBUG(hdl, "Appending offset %#lx to list, next %#lx",
 						drc->drc_offset, drc->drc_next_offset);
@@ -769,12 +777,15 @@ dfuse_do_readdir(struct dfuse_info *dfuse_info, fuse_req_t req, struct dfuse_obj
 			dre->dre_offset = 0;
 			buff_offset += written;
 			added++;
+next:
 			offset++;
 			oh->doh_rd_offset = dre->dre_next_offset;
 
 			if (dre->dre_next_offset == READDIR_EOD) {
 				DFUSE_TRA_DEBUG(oh, "Reached end of directory");
 				oh->doh_rd_offset = READDIR_EOD;
+				if (hdl->drh_caching && oh->doh_rd_nextc != NULL)
+					oh->doh_rd_nextc->drc_next_offset = READDIR_EOD;
 				D_GOTO(reply, rc = 0);
 			}
 		}