diff --git a/git.c b/git.c
index 6ed824cacf..da278c3d41 100644
--- a/git.c
+++ b/git.c
@@ -25,14 +25,14 @@ static const char *env_names[] = {
 	GIT_PREFIX_ENVIRONMENT
 };
 static char *orig_env[4];
-static int saved_environment;
+static int saved_env_before_alias;
 
-static void save_env(void)
+static void save_env_before_alias(void)
 {
 	int i;
-	if (saved_environment)
+	if (saved_env_before_alias)
 		return;
-	saved_environment = 1;
+	saved_env_before_alias = 1;
 	orig_cwd = xgetcwd();
 	for (i = 0; i < ARRAY_SIZE(env_names); i++) {
 		orig_env[i] = getenv(env_names[i]);
@@ -41,13 +41,16 @@ static void save_env(void)
 	}
 }
 
-static void restore_env(void)
+static void restore_env(int external_alias)
 {
 	int i;
-	if (orig_cwd && chdir(orig_cwd))
+	if (!external_alias && orig_cwd && chdir(orig_cwd))
 		die_errno("could not move to %s", orig_cwd);
 	free(orig_cwd);
 	for (i = 0; i < ARRAY_SIZE(env_names); i++) {
+		if (external_alias &&
+		    !strcmp(env_names[i], GIT_PREFIX_ENVIRONMENT))
+			continue;
 		if (orig_env[i])
 			setenv(env_names[i], orig_env[i], 1);
 		else
@@ -226,14 +229,14 @@ static int handle_options(const char ***argv, int *argc, int *envchanged)
 static int handle_alias(int *argcp, const char ***argv)
 {
 	int envchanged = 0, ret = 0, saved_errno = errno;
-	const char *subdir;
 	int count, option_count;
 	const char **new_argv;
 	const char *alias_command;
 	char *alias_string;
 	int unused_nongit;
 
-	subdir = setup_git_directory_gently(&unused_nongit);
+	save_env_before_alias();
+	setup_git_directory_gently(&unused_nongit);
 
 	alias_command = (*argv)[0];
 	alias_string = alias_lookup(alias_command);
@@ -243,6 +246,7 @@ static int handle_alias(int *argcp, const char ***argv)
 			int argc = *argcp, i;
 
 			commit_pager_choice();
+			restore_env(1);
 
 			/* build alias_argv */
 			alias_argv = xmalloc(sizeof(*alias_argv) * (argc + 1));
@@ -291,8 +295,7 @@ static int handle_alias(int *argcp, const char ***argv)
 		ret = 1;
 	}
 
-	if (subdir && chdir(subdir))
-		die_errno("Cannot change to '%s'", subdir);
+	restore_env(0);
 
 	errno = saved_errno;
 
@@ -307,7 +310,6 @@ static int handle_alias(int *argcp, const char ***argv)
  * RUN_SETUP for reading from the configuration file.
  */
 #define NEED_WORK_TREE		(1<<3)
-#define NO_SETUP		(1<<4)
 
 struct cmd_struct {
 	const char *cmd;
@@ -389,7 +391,7 @@ static struct cmd_struct commands[] = {
 	{ "cherry", cmd_cherry, RUN_SETUP },
 	{ "cherry-pick", cmd_cherry_pick, RUN_SETUP | NEED_WORK_TREE },
 	{ "clean", cmd_clean, RUN_SETUP | NEED_WORK_TREE },
-	{ "clone", cmd_clone, NO_SETUP },
+	{ "clone", cmd_clone },
 	{ "column", cmd_column, RUN_SETUP_GENTLY },
 	{ "commit", cmd_commit, RUN_SETUP | NEED_WORK_TREE },
 	{ "commit-tree", cmd_commit_tree, RUN_SETUP },
@@ -415,8 +417,8 @@ static struct cmd_struct commands[] = {
 	{ "hash-object", cmd_hash_object },
 	{ "help", cmd_help },
 	{ "index-pack", cmd_index_pack, RUN_SETUP_GENTLY },
-	{ "init", cmd_init_db, NO_SETUP },
-	{ "init-db", cmd_init_db, NO_SETUP },
+	{ "init", cmd_init_db },
+	{ "init-db", cmd_init_db },
 	{ "interpret-trailers", cmd_interpret_trailers, RUN_SETUP_GENTLY },
 	{ "log", cmd_log, RUN_SETUP },
 	{ "ls-files", cmd_ls_files, RUN_SETUP },
@@ -530,9 +532,13 @@ static void handle_builtin(int argc, const char **argv)
 
 	builtin = get_builtin(cmd);
 	if (builtin) {
-		if (saved_environment && (builtin->option & NO_SETUP))
-			restore_env();
-		else
+		/*
+		 * XXX: if we can figure out cases where it is _safe_
+		 * to do, we can avoid spawning a new process when
+		 * saved_env_before_alias is true
+		 * (i.e. setup_git_dir* has been run once)
+		 */
+		if (!saved_env_before_alias)
 			exit(run_builtin(builtin, argc, argv));
 	}
 }
@@ -590,7 +596,6 @@ static int run_argv(int *argcp, const char ***argv)
 		 */
 		if (done_alias)
 			break;
-		save_env();
 		if (!handle_alias(argcp, argv))
 			break;
 		done_alias = 1;
diff --git a/run-command.c b/run-command.c
index 51fd72c427..cdf0184579 100644
--- a/run-command.c
+++ b/run-command.c
@@ -247,7 +247,7 @@ static int wait_or_whine(pid_t pid, const char *argv0, int in_signal)
 		error("waitpid is confused (%s)", argv0);
 	} else if (WIFSIGNALED(status)) {
 		code = WTERMSIG(status);
-		if (code != SIGINT && code != SIGQUIT)
+		if (code != SIGINT && code != SIGQUIT && code != SIGPIPE)
 			error("%s died of signal %d", argv0, code);
 		/*
 		 * This return value is chosen so that code & 0xff
diff --git a/t/t0001-init.sh b/t/t0001-init.sh
index f91bbcfc85..295aa5949a 100755
--- a/t/t0001-init.sh
+++ b/t/t0001-init.sh
@@ -87,6 +87,23 @@ test_expect_success 'plain nested in bare through aliased command' '
 	check_config bare-ancestor-aliased.git/plain-nested/.git false unset
 '
 
+test_expect_success 'No extra GIT_* on alias scripts' '
+	(
+		env | sed -ne "/^GIT_/s/=.*//p" &&
+		echo GIT_PREFIX &&        # setup.c
+		echo GIT_TEXTDOMAINDIR    # wrapper-for-bin.sh
+	) | sort | uniq >expected &&
+	cat <<-\EOF >script &&
+	#!/bin/sh
+	env | sed -ne "/^GIT_/s/=.*//p" | sort >actual
+	exit 0
+	EOF
+	chmod 755 script &&
+	git config alias.script \!./script &&
+	( mkdir sub && cd sub && git script ) &&
+	test_cmp expected actual
+'
+
 test_expect_success 'plain with GIT_WORK_TREE' '
 	mkdir plain-wt &&
 	test_must_fail env GIT_WORK_TREE="$(pwd)/plain-wt" git init plain-wt
diff --git a/t/t0002-gitfile.sh b/t/t0002-gitfile.sh
index 3afe0125c9..9670e8cbe6 100755
--- a/t/t0002-gitfile.sh
+++ b/t/t0002-gitfile.sh
@@ -99,7 +99,7 @@ test_expect_success 'check rev-list' '
 	test "$SHA" = "$(git rev-list HEAD)"
 '
 
-test_expect_failure 'setup_git_dir twice in subdir' '
+test_expect_success 'setup_git_dir twice in subdir' '
 	git init sgd &&
 	(
 		cd sgd &&
diff --git a/t/t5601-clone.sh b/t/t5601-clone.sh
index 9b34f3c615..31b46582d7 100755
--- a/t/t5601-clone.sh
+++ b/t/t5601-clone.sh
@@ -65,6 +65,29 @@ test_expect_success 'clone respects GIT_WORK_TREE' '
 
 '
 
+test_expect_success 'clone from hooks' '
+
+	test_create_repo r0 &&
+	cd r0 &&
+	test_commit initial &&
+	cd .. &&
+	git init r1 &&
+	cd r1 &&
+	cat >.git/hooks/pre-commit <<-\EOF &&
+	#!/bin/sh
+	git clone ../r0 ../r2
+	exit 1
+	EOF
+	chmod u+x .git/hooks/pre-commit &&
+	: >file &&
+	git add file &&
+	test_must_fail git commit -m invoke-hook &&
+	cd .. &&
+	test_cmp r0/.git/HEAD r2/.git/HEAD &&
+	test_cmp r0/initial.t r2/initial.t
+
+'
+
 test_expect_success 'clone creates intermediate directories' '
 
 	git clone src long/path/to/dst &&