diff --git a/tests/runfiles/common.run b/tests/runfiles/common.run
index 558cd425afd8..7e1dba555c5e 100644
--- a/tests/runfiles/common.run
+++ b/tests/runfiles/common.run
@@ -642,6 +642,10 @@ tags = ['functional', 'compression']
 tests = ['cp_files_001_pos', 'cp_files_002_pos', 'cp_stress']
 tags = ['functional', 'cp_files']
 
+[tests/functional/zap_shrink]
+tests = ['zap_shrink_001_pos']
+tags = ['functional', 'zap_shrink']
+
 [tests/functional/crtime]
 tests = ['crtime_001_pos' ]
 tags = ['functional', 'crtime']
diff --git a/tests/zfs-tests/tests/Makefile.am b/tests/zfs-tests/tests/Makefile.am
index f182a2825cd6..93b322f7d895 100644
--- a/tests/zfs-tests/tests/Makefile.am
+++ b/tests/zfs-tests/tests/Makefile.am
@@ -2071,6 +2071,9 @@ nobase_dist_datadir_zfs_tests_tests_SCRIPTS += \
 	functional/xattr/xattr_012_pos.ksh \
 	functional/xattr/xattr_013_pos.ksh \
 	functional/xattr/xattr_compat.ksh \
+	functional/zap_shrink/cleanup.ksh \
+	functional/zap_shrink/zap_shrink_001_pos.ksh \
+	functional/zap_shrink/setup.ksh \
 	functional/zpool_influxdb/cleanup.ksh \
 	functional/zpool_influxdb/setup.ksh \
 	functional/zpool_influxdb/zpool_influxdb.ksh \
diff --git a/tests/zfs-tests/tests/functional/zap_shrink/cleanup.ksh b/tests/zfs-tests/tests/functional/zap_shrink/cleanup.ksh
new file mode 100755
index 000000000000..42fe70042d6a
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/zap_shrink/cleanup.ksh
@@ -0,0 +1,34 @@
+#!/bin/ksh -p
+#
+# CDDL HEADER START
+#
+# The contents of this file are subject to the terms of the
+# Common Development and Distribution License (the "License").
+# You may not use this file except in compliance with the License.
+#
+# You can obtain a copy of the license at usr/src/OPENSOLARIS.LICENSE
+# or https://opensource.org/licenses/CDDL-1.0.
+# See the License for the specific language governing permissions
+# and limitations under the License.
+#
+# When distributing Covered Code, include this CDDL HEADER in each
+# file and include the License file at usr/src/OPENSOLARIS.LICENSE.
+# If applicable, add the following below this CDDL HEADER, with the
+# fields enclosed by brackets "[]" replaced with your own identifying
+# information: Portions Copyright [yyyy] [name of copyright owner]
+#
+# CDDL HEADER END
+#
+
+#
+# Copyright 2007 Sun Microsystems, Inc.  All rights reserved.
+# Use is subject to license terms.
+#
+
+#
+# Copyright (c) 2013 by Delphix. All rights reserved.
+#
+
+. $STF_SUITE/include/libtest.shlib
+
+default_cleanup
diff --git a/tests/zfs-tests/tests/functional/zap_shrink/setup.ksh b/tests/zfs-tests/tests/functional/zap_shrink/setup.ksh
new file mode 100755
index 000000000000..b756d4e76c83
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/zap_shrink/setup.ksh
@@ -0,0 +1,35 @@
+#!/bin/ksh -p
+#
+# CDDL HEADER START
+#
+# The contents of this file are subject to the terms of the
+# Common Development and Distribution License (the "License").
+# You may not use this file except in compliance with the License.
+#
+# You can obtain a copy of the license at usr/src/OPENSOLARIS.LICENSE
+# or https://opensource.org/licenses/CDDL-1.0.
+# See the License for the specific language governing permissions
+# and limitations under the License.
+#
+# When distributing Covered Code, include this CDDL HEADER in each
+# file and include the License file at usr/src/OPENSOLARIS.LICENSE.
+# If applicable, add the following below this CDDL HEADER, with the
+# fields enclosed by brackets "[]" replaced with your own identifying
+# information: Portions Copyright [yyyy] [name of copyright owner]
+#
+# CDDL HEADER END
+#
+
+#
+# Copyright 2007 Sun Microsystems, Inc.  All rights reserved.
+# Use is subject to license terms.
+#
+
+#
+# Copyright (c) 2013 by Delphix. All rights reserved.
+#
+
+. $STF_SUITE/include/libtest.shlib
+
+DISK=${DISKS%% *}
+default_setup $DISK
diff --git a/tests/zfs-tests/tests/functional/zap_shrink/zap_shrink_001_pos.ksh b/tests/zfs-tests/tests/functional/zap_shrink/zap_shrink_001_pos.ksh
new file mode 100755
index 000000000000..e68ebfd91995
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/zap_shrink/zap_shrink_001_pos.ksh
@@ -0,0 +1,79 @@
+#! /bin/ksh -p
+#
+# CDDL HEADER START
+#
+# The contents of this file are subject to the terms of the
+# Common Development and Distribution License (the "License").
+# You may not use this file except in compliance with the License.
+#
+# You can obtain a copy of the license at usr/src/OPENSOLARIS.LICENSE
+# or https://opensource.org/licenses/CDDL-1.0.
+# See the License for the specific language governing permissions
+# and limitations under the License.
+#
+# When distributing Covered Code, include this CDDL HEADER in each
+# file and include the License file at usr/src/OPENSOLARIS.LICENSE.
+# If applicable, add the following below this CDDL HEADER, with the
+# fields enclosed by brackets "[]" replaced with your own identifying
+# information: Portions Copyright [yyyy] [name of copyright owner]
+#
+# CDDL HEADER END
+#
+
+#
+# Copyright 2024, Klara Inc.
+#
+
+. $STF_SUITE/include/libtest.shlib
+
+#
+# DESCRIPTION:
+# Create a large number of files in a directory. Then remove all files and
+# check that the directory zap was shrunk. Use zdb to check that the zap object
+# contains only one leaf block using zdb.
+#
+
+verify_runnable "global"
+
+DIR=largedir
+
+NR_FILES=100000
+BATCH=1000
+CWD=$PWD
+
+log_assert "Create a large number of files ($NR_FILES) in a directory. " \
+	"Make sure that the directory ZAP object was shrunk."
+
+log_must mkdir $TESTDIR/$DIR
+
+cd $TESTDIR/$DIR
+# In order to prevent arguments overflowing, create NR_FILES in BATCH at once.
+for i in $(seq $(($NR_FILES/$BATCH))); do
+	touch $(seq $((($i-1)*$BATCH+1)) $(($i*$BATCH)));
+done
+cd $CWD
+
+log_must test $NR_FILES -eq $(ls -U $TESTDIR/$DIR | wc -l)
+
+# remove all files in $DIR directory
+cd $TESTDIR/$DIR
+for i in $(seq $(($NR_FILES/$BATCH))); do
+	rm $(seq $((($i-1)*$BATCH+1)) $(($i*$BATCH)))
+done
+cd $CWD
+sync_pool $TESTPOOL
+
+log_must test 0 -eq $(ls -U $TESTDIR/$DIR | wc -l)
+
+# check whether zap_shrink works
+zapobj=$(zdb -v -O $TESTPOOL/$TESTFS $DIR)
+nleafs=$(echo "$zapobj" | grep "Leaf blocks:" | awk -F\: '{print($2);}')
+log_must test 1 -eq $nleafs
+
+log_must zpool export $TESTPOOL
+zapobj=$(zdb -e -v -O $TESTPOOL/$TESTFS $DIR)
+nleafs=$(echo "$zapobj" | grep "Leaf blocks:" | awk -F\: '{print($2);}')
+log_must test 1 -eq $nleafs
+log_must zpool import $TESTPOOL
+
+log_pass