diff --git a/cache.h b/cache.h
index 3c6b677418..c1fe67ffcf 100644
--- a/cache.h
+++ b/cache.h
@@ -365,6 +365,18 @@ static inline enum object_type object_type(unsigned int mode)
 #define GIT_NOTES_REWRITE_REF_ENVIRONMENT "GIT_NOTES_REWRITE_REF"
 #define GIT_NOTES_REWRITE_MODE_ENVIRONMENT "GIT_NOTES_REWRITE_MODE"
 
+/*
+ * This environment variable is expected to contain a boolean indicating
+ * whether we should or should not treat:
+ *
+ *   GIT_DIR=foo.git git ...
+ *
+ * as if GIT_WORK_TREE=. was given. It's not expected that users will make use
+ * of this, but we use it internally to communicate to sub-processes that we
+ * are in a bare repo. If not set, defaults to true.
+ */
+#define GIT_IMPLICIT_WORK_TREE_ENVIRONMENT "GIT_IMPLICIT_WORK_TREE"
+
 /*
  * Repository-local GIT_* environment variables; these will be cleared
  * when git spawns a sub-process that runs inside another repository.
diff --git a/environment.c b/environment.c
index 4fb7ceac3a..92c5dff008 100644
--- a/environment.c
+++ b/environment.c
@@ -85,6 +85,7 @@ const char * const local_repo_env[] = {
 	DB_ENVIRONMENT,
 	GIT_DIR_ENVIRONMENT,
 	GIT_WORK_TREE_ENVIRONMENT,
+	GIT_IMPLICIT_WORK_TREE_ENVIRONMENT,
 	GRAFT_ENVIRONMENT,
 	INDEX_ENVIRONMENT,
 	NO_REPLACE_OBJECTS_ENVIRONMENT,
diff --git a/git.c b/git.c
index d33f9b32a2..0ffea570c7 100644
--- a/git.c
+++ b/git.c
@@ -125,6 +125,7 @@ static int handle_options(const char ***argv, int *argc, int *envchanged)
 			static char git_dir[PATH_MAX+1];
 			is_bare_repository_cfg = 1;
 			setenv(GIT_DIR_ENVIRONMENT, getcwd(git_dir, sizeof(git_dir)), 0);
+			setenv(GIT_IMPLICIT_WORK_TREE_ENVIRONMENT, "0", 1);
 			if (envchanged)
 				*envchanged = 1;
 		} else if (!strcmp(cmd, "-c")) {
diff --git a/setup.c b/setup.c
index d0e3ecdcd4..01c5476eb7 100644
--- a/setup.c
+++ b/setup.c
@@ -497,6 +497,12 @@ static const char *setup_explicit_git_dir(const char *gitdirenv,
 			set_git_work_tree(core_worktree);
 		}
 	}
+	else if (!git_env_bool(GIT_IMPLICIT_WORK_TREE_ENVIRONMENT, 1)) {
+		/* #16d */
+		set_git_dir(gitdirenv);
+		free(gitfile);
+		return NULL;
+	}
 	else /* #2, #10 */
 		set_git_work_tree(".");
 
@@ -575,6 +581,8 @@ static const char *setup_bare_git_dir(char *cwd, int offset, int len, int *nongi
 	if (check_repository_format_gently(".", nongit_ok))
 		return NULL;
 
+	setenv(GIT_IMPLICIT_WORK_TREE_ENVIRONMENT, "0", 1);
+
 	/* --work-tree is set without --git-dir; use discovered one */
 	if (getenv(GIT_WORK_TREE_ENVIRONMENT) || git_work_tree_cfg) {
 		const char *gitdir;
diff --git a/t/t1510-repo-setup.sh b/t/t1510-repo-setup.sh
index 80aedfca8c..cf2ee7885a 100755
--- a/t/t1510-repo-setup.sh
+++ b/t/t1510-repo-setup.sh
@@ -517,6 +517,25 @@ test_expect_success '#16c: bare .git has no worktree' '
 		"$here/16c/.git" "(null)" "$here/16c/sub" "(null)"
 '
 
+test_expect_success '#16d: bareness preserved across alias' '
+	setup_repo 16d unset "" unset &&
+	(
+		cd 16d/.git &&
+		test_must_fail git status &&
+		git config alias.st status &&
+		test_must_fail git st
+	)
+'
+
+test_expect_success '#16e: bareness preserved by --bare' '
+	setup_repo 16e unset "" unset &&
+	(
+		cd 16e/.git &&
+		test_must_fail git status &&
+		test_must_fail git --bare status
+	)
+'
+
 test_expect_success '#17: GIT_WORK_TREE without explicit GIT_DIR is accepted (bare case)' '
 	# Just like #16.
 	setup_repo 17a unset "" true &&