diff --git a/Lib/compileall.py b/Lib/compileall.py
index 1030d8c..d79a1bb 100644
--- a/Lib/compileall.py
+++ b/Lib/compileall.py
@@ -58,7 +58,7 @@
         elif (maxlevels > 0 and name != os.curdir and name != os.pardir and
               os.path.isdir(fullname) and not os.path.islink(fullname)):
             if not compile_dir(fullname, maxlevels - 1, dfile, force, rx,
-                               quiet, legacy):
+                               quiet, legacy, optimize):
                 success = 0
     return success
 
diff --git a/Lib/test/test_compileall.py b/Lib/test/test_compileall.py
index 295dc40..250d31b 100644
--- a/Lib/test/test_compileall.py
+++ b/Lib/test/test_compileall.py
@@ -24,6 +24,10 @@
         self.source_path2 = os.path.join(self.directory, '_test2.py')
         self.bc_path2 = imp.cache_from_source(self.source_path2)
         shutil.copyfile(self.source_path, self.source_path2)
+        self.subdirectory = os.path.join(self.directory, '_subdir')
+        os.mkdir(self.subdirectory)
+        self.source_path3 = os.path.join(self.subdirectory, '_test3.py')
+        shutil.copyfile(self.source_path, self.source_path3)
 
     def tearDown(self):
         shutil.rmtree(self.directory)
@@ -96,6 +100,12 @@
         cached = imp.cache_from_source(self.source_path,
                                        debug_override=not optimize)
         self.assertTrue(os.path.isfile(cached))
+        cached2 = imp.cache_from_source(self.source_path2,
+                                       debug_override=not optimize)
+        self.assertTrue(os.path.isfile(cached2))
+        cached3 = imp.cache_from_source(self.source_path3,
+                                       debug_override=not optimize)
+        self.assertTrue(os.path.isfile(cached3))
 
 
 class EncodingTest(unittest.TestCase):
diff --git a/Misc/ACKS b/Misc/ACKS
index 8e12007..c22e360 100644
--- a/Misc/ACKS
+++ b/Misc/ACKS
@@ -843,6 +843,7 @@
 Robin Thomas
 Jeremy Thurgood
 Eric Tiedemann
+July Tikhonov
 Tracy Tims
 Oren Tirosh
 Jason Tishler
diff --git a/Misc/NEWS b/Misc/NEWS
index 7dbbcbb..80c08c2 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -18,6 +18,9 @@
 Library
 -------
 
+- Issue #11132: Fix passing of "optimize" parameter when recursing
+  in compileall.compile_dir().
+
 - Issue #11110: Fix a potential decref of a NULL in sqlite3.
 
 - Issue #8275: Fix passing of callback arguments with ctypes under Win64.