diff --git a/Makefile b/Makefile
index d9a3a82fe2..518c3c176b 100644
--- a/Makefile
+++ b/Makefile
@@ -204,7 +204,7 @@ DIFF_OBJS = \
 	diffcore-delta.o log-tree.o
 
 LIB_OBJS = \
-	blob.o commit.o connect.o csum-file.o \
+	blob.o commit.o connect.o csum-file.o cache-tree.o \
 	date.o diff-delta.o entry.o exec_cmd.o ident.o index.o \
 	object.o pack-check.o patch-delta.o path.o pkt-line.o \
 	quote.o read-cache.o refs.o run-command.o \
diff --git a/cache-tree.c b/cache-tree.c
new file mode 100644
index 0000000000..f6d1dd1d7f
--- /dev/null
+++ b/cache-tree.c
@@ -0,0 +1,519 @@
+#include "cache.h"
+#include "tree.h"
+#include "cache-tree.h"
+
+#define DEBUG 0
+
+struct cache_tree *cache_tree(void)
+{
+	struct cache_tree *it = xcalloc(1, sizeof(struct cache_tree));
+	it->entry_count = -1;
+	return it;
+}
+
+void cache_tree_free(struct cache_tree *it)
+{
+	int i;
+
+	if (!it)
+		return;
+	for (i = 0; i < it->subtree_nr; i++)
+		cache_tree_free(it->down[i]->cache_tree);
+	free(it->down);
+	free(it);
+}
+
+static struct cache_tree_sub *find_subtree(struct cache_tree *it,
+					   const char *path,
+					   int pathlen,
+					   int create)
+{
+	int i;
+	struct cache_tree_sub *down;
+	for (i = 0; i < it->subtree_nr; i++) {
+		down = it->down[i];
+		if (down->namelen == pathlen &&
+		    !memcmp(down->name, path, pathlen))
+			return down;
+	}
+	if (!create)
+		return NULL;
+	if (it->subtree_alloc <= it->subtree_nr) {
+		it->subtree_alloc = alloc_nr(it->subtree_alloc);
+		it->down = xrealloc(it->down, it->subtree_alloc *
+				    sizeof(*it->down));
+	}
+	down = xmalloc(sizeof(*down) + pathlen + 1);
+	down->cache_tree = NULL; /* cache_tree(); */
+	down->namelen = pathlen;
+	memcpy(down->name, path, pathlen);
+	down->name[pathlen] = 0; /* not strictly needed */
+	it->down[it->subtree_nr++] = down;
+	return down;
+}
+
+void cache_tree_invalidate_path(struct cache_tree *it, const char *path)
+{
+	/* a/b/c
+	 * ==> invalidate self
+	 * ==> find "a", have it invalidate "b/c"
+	 * a
+	 * ==> invalidate self
+	 * ==> if "a" exists as a subtree, remove it.
+	 */
+	const char *slash;
+	int namelen;
+	struct cache_tree_sub *down;
+
+	if (!it)
+		return;
+	slash = strchr(path, '/');
+	it->entry_count = -1;
+	if (!slash) {
+		int i;
+		namelen = strlen(path);
+		for (i = 0; i < it->subtree_nr; i++) {
+			if (it->down[i]->namelen == namelen &&
+			    !memcmp(it->down[i]->name, path, namelen))
+				break;
+		}
+		if (i < it->subtree_nr) {
+			cache_tree_free(it->down[i]->cache_tree);
+			free(it->down[i]);
+			/* 0 1 2 3 4 5
+			 *       ^     ^subtree_nr = 6
+			 *       i
+			 * move 4 and 5 up one place (2 entries)
+			 * 2 = 6 - 3 - 1 = subtree_nr - i - 1
+			 */
+			memmove(it->down+i, it->down+i+1,
+				sizeof(struct cache_tree_sub *) *
+				(it->subtree_nr - i - 1));
+			it->subtree_nr--;
+		}
+		return;
+	}
+	namelen = slash - path;
+	down = find_subtree(it, path, namelen, 0);
+	if (down)
+		cache_tree_invalidate_path(down->cache_tree, slash + 1);
+}
+
+static int verify_cache(struct cache_entry **cache,
+			int entries)
+{
+	int i, funny;
+
+	/* Verify that the tree is merged */
+	funny = 0;
+	for (i = 0; i < entries; i++) {
+		struct cache_entry *ce = cache[i];
+		if (ce_stage(ce)) {
+			if (10 < ++funny) {
+				fprintf(stderr, "...\n");
+				break;
+			}
+			fprintf(stderr, "%s: unmerged (%s)\n",
+				ce->name, sha1_to_hex(ce->sha1));
+		}
+	}
+	if (funny)
+		return -1;
+
+	/* Also verify that the cache does not have path and path/file
+	 * at the same time.  At this point we know the cache has only
+	 * stage 0 entries.
+	 */
+	funny = 0;
+	for (i = 0; i < entries - 1; i++) {
+		/* path/file always comes after path because of the way
+		 * the cache is sorted.  Also path can appear only once,
+		 * which means conflicting one would immediately follow.
+		 */
+		const char *this_name = cache[i]->name;
+		const char *next_name = cache[i+1]->name;
+		int this_len = strlen(this_name);
+		if (this_len < strlen(next_name) &&
+		    strncmp(this_name, next_name, this_len) == 0 &&
+		    next_name[this_len] == '/') {
+			if (10 < ++funny) {
+				fprintf(stderr, "...\n");
+				break;
+			}
+			fprintf(stderr, "You have both %s and %s\n",
+				this_name, next_name);
+		}
+	}
+	if (funny)
+		return -1;
+	return 0;
+}
+
+static void discard_unused_subtrees(struct cache_tree *it)
+{
+	struct cache_tree_sub **down = it->down;
+	int nr = it->subtree_nr;
+	int dst, src;
+	for (dst = src = 0; src < nr; src++) {
+		struct cache_tree_sub *s = down[src];
+		if (s->used)
+			down[dst++] = s;
+		else {
+			cache_tree_free(s->cache_tree);
+			free(s);
+			it->subtree_nr--;
+		}
+	}
+}
+
+static int update_one(struct cache_tree *it,
+		      struct cache_entry **cache,
+		      int entries,
+		      const char *base,
+		      int baselen,
+		      int missing_ok)
+{
+	unsigned long size, offset;
+	char *buffer;
+	int i;
+
+	if (0 <= it->entry_count)
+		return it->entry_count;
+
+	/*
+	 * We first scan for subtrees and update them; we start by
+	 * marking existing subtrees -- the ones that are unmarked
+	 * should not be in the result.
+	 */
+	for (i = 0; i < it->subtree_nr; i++)
+		it->down[i]->used = 0;
+
+	/*
+	 * Find the subtrees and update them.
+	 */
+	for (i = 0; i < entries; i++) {
+		struct cache_entry *ce = cache[i];
+		struct cache_tree_sub *sub;
+		const char *path, *slash;
+		int pathlen, sublen, subcnt;
+
+		path = ce->name;
+		pathlen = ce_namelen(ce);
+		if (pathlen <= baselen || memcmp(base, path, baselen))
+			break; /* at the end of this level */
+
+		slash = strchr(path + baselen, '/');
+		if (!slash)
+			continue;
+		/*
+		 * a/bbb/c (base = a/, slash = /c)
+		 * ==>
+		 * path+baselen = bbb/c, sublen = 3
+		 */
+		sublen = slash - (path + baselen);
+		sub = find_subtree(it, path + baselen, sublen, 1);
+		if (!sub->cache_tree)
+			sub->cache_tree = cache_tree();
+		subcnt = update_one(sub->cache_tree,
+				    cache + i, entries - i,
+				    path,
+				    baselen + sublen + 1,
+				    missing_ok);
+		i += subcnt - 1;
+		sub->used = 1;
+	}
+
+	discard_unused_subtrees(it);
+
+	/*
+	 * Then write out the tree object for this level.
+	 */
+	size = 8192;
+	buffer = xmalloc(size);
+	offset = 0;
+
+	for (i = 0; i < entries; i++) {
+		struct cache_entry *ce = cache[i];
+		struct cache_tree_sub *sub;
+		const char *path, *slash;
+		int pathlen, entlen;
+		const unsigned char *sha1;
+		unsigned mode;
+
+		path = ce->name;
+		pathlen = ce_namelen(ce);
+		if (pathlen <= baselen || memcmp(base, path, baselen))
+			break; /* at the end of this level */
+
+		slash = strchr(path + baselen, '/');
+		if (slash) {
+			entlen = slash - (path + baselen);
+			sub = find_subtree(it, path + baselen, entlen, 0);
+			if (!sub)
+				die("cache-tree.c: '%.*s' in '%s' not found",
+				    entlen, path + baselen, path);
+			i += sub->cache_tree->entry_count - 1;
+			sha1 = sub->cache_tree->sha1;
+			mode = S_IFDIR;
+		}
+		else {
+			sha1 = ce->sha1;
+			mode = ntohl(ce->ce_mode);
+			entlen = pathlen - baselen;
+		}
+		if (!missing_ok && !has_sha1_file(sha1))
+			return error("invalid object %s", sha1_to_hex(sha1));
+
+		if (!ce->ce_mode)
+			continue; /* entry being removed */
+
+		if (size < offset + entlen + 100) {
+			size = alloc_nr(offset + entlen + 100);
+			buffer = xrealloc(buffer, size);
+		}
+		offset += sprintf(buffer + offset,
+				  "%o %.*s", mode, entlen, path + baselen);
+		buffer[offset++] = 0;
+		memcpy(buffer + offset, sha1, 20);
+		offset += 20;
+
+#if DEBUG
+		fprintf(stderr, "cache-tree %o %.*s\n",
+			mode, entlen, path + baselen);
+#endif
+	}
+
+	write_sha1_file(buffer, offset, tree_type, it->sha1);
+	free(buffer);
+	it->entry_count = i;
+#if DEBUG
+	fprintf(stderr, "cache-tree (%d ent, %d subtree) %s\n",
+		it->entry_count, it->subtree_nr,
+		sha1_to_hex(it->sha1));
+#endif
+	return i;
+}
+
+int cache_tree_update(struct cache_tree *it,
+		      struct cache_entry **cache,
+		      int entries,
+		      int missing_ok)
+{
+	int i;
+	i = verify_cache(cache, entries);
+	if (i)
+		return i;
+	i = update_one(it, cache, entries, "", 0, missing_ok);
+	if (i < 0)
+		return i;
+	return 0;
+}
+
+static void *write_one(struct cache_tree *it,
+		       char *path,
+		       int pathlen,
+		       char *buffer,
+		       unsigned long *size,
+		       unsigned long *offset)
+{
+	int i;
+
+	/* One "cache-tree" entry consists of the following:
+	 * path (NUL terminated)
+	 * entry_count, subtree_nr ("%d %d\n")
+	 * tree-sha1 (missing if invalid)
+	 * subtree_nr "cache-tree" entries for subtrees.
+	 */
+	if (*size < *offset + pathlen + 100) {
+		*size = alloc_nr(*offset + pathlen + 100);
+		buffer = xrealloc(buffer, *size);
+	}
+	*offset += sprintf(buffer + *offset, "%.*s%c%d %d\n",
+			   pathlen, path, 0,
+			   it->entry_count, it->subtree_nr);
+
+#if DEBUG
+	if (0 <= it->entry_count)
+		fprintf(stderr, "cache-tree <%.*s> (%d ent, %d subtree) %s\n",
+			pathlen, path, it->entry_count, it->subtree_nr,
+			sha1_to_hex(it->sha1));
+	else
+		fprintf(stderr, "cache-tree <%.*s> (%d subtree) invalid\n",
+			pathlen, path, it->subtree_nr);
+#endif
+
+	if (0 <= it->entry_count) {
+		memcpy(buffer + *offset, it->sha1, 20);
+		*offset += 20;
+	}
+	for (i = 0; i < it->subtree_nr; i++) {
+		struct cache_tree_sub *down = it->down[i];
+		buffer = write_one(down->cache_tree, down->name, down->namelen,
+				   buffer, size, offset);
+	}
+	return buffer;
+}
+
+static void *cache_tree_write(const unsigned char *cache_sha1,
+			      struct cache_tree *root,
+			      unsigned long *offset_p)
+{
+	char path[PATH_MAX];
+	unsigned long size = 8192;
+	char *buffer = xmalloc(size);
+
+	/* the cache checksum of the corresponding index file. */
+	memcpy(buffer, cache_sha1, 20);
+	*offset_p = 20;
+	path[0] = 0;
+	return write_one(root, path, 0, buffer, &size, offset_p);
+}
+
+static struct cache_tree *read_one(const char **buffer, unsigned long *size_p)
+{
+	const char *buf = *buffer;
+	unsigned long size = *size_p;
+	struct cache_tree *it;
+	int i, subtree_nr;
+
+	it = NULL;
+	/* skip name, but make sure name exists */
+	while (size && *buf) {
+		size--;
+		buf++;
+	}
+	if (!size)
+		goto free_return;
+	buf++; size--;
+	it = cache_tree();
+	if (sscanf(buf, "%d %d\n", &it->entry_count, &subtree_nr) != 2)
+		goto free_return;
+	while (size && *buf && *buf != '\n') {
+		size--;
+		buf++;
+	}
+	if (!size)
+		goto free_return;
+	buf++; size--;
+	if (0 <= it->entry_count) {
+		if (size < 20)
+			goto free_return;
+		memcpy(it->sha1, buf, 20);
+		buf += 20;
+		size -= 20;
+	}
+
+#if DEBUG
+	if (0 <= it->entry_count)
+		fprintf(stderr, "cache-tree <%s> (%d ent, %d subtree) %s\n",
+			*buffer, it->entry_count, subtree_nr,
+			sha1_to_hex(it->sha1));
+	else
+		fprintf(stderr, "cache-tree <%s> (%d subtrees) invalid\n",
+			*buffer, subtree_nr);
+#endif
+
+	/*
+	 * Just a heuristic -- we do not add directories that often but
+	 * we do not want to have to extend it immediately when we do,
+	 * hence +2.
+	 */
+	it->subtree_alloc = subtree_nr + 2;
+	it->down = xcalloc(it->subtree_alloc, sizeof(struct cache_tree_sub *));
+	for (i = 0; i < subtree_nr; i++) {
+		/* read each subtree */
+		struct cache_tree *sub;
+		const char *name = buf;
+		int namelen;
+		sub = read_one(&buf, &size);
+		if (!sub)
+			goto free_return;
+		namelen = strlen(name);
+		it->down[i] = find_subtree(it, name, namelen, 1);
+		it->down[i]->cache_tree = sub;
+	}
+	if (subtree_nr != it->subtree_nr)
+		die("cache-tree: internal error");
+	*buffer = buf;
+	*size_p = size;
+	return it;
+
+ free_return:
+	cache_tree_free(it);
+	return NULL;
+}
+
+static struct cache_tree *cache_tree_read(unsigned char *sha1,
+					  const char *buffer,
+					  unsigned long size)
+{
+	/* check the cache-tree matches the index */
+	if (memcmp(buffer, sha1, 20))
+		return NULL; /* checksum mismatch */
+	if (buffer[20])
+		return NULL; /* not the whole tree */
+	buffer += 20;
+	size -= 20;
+	return read_one(&buffer, &size);
+}
+
+struct cache_tree *read_cache_tree(unsigned char *sha1)
+{
+	int fd;
+	struct stat st;
+	char path[PATH_MAX];
+	unsigned long size = 0;
+	void *map;
+	struct cache_tree *it;
+
+	sprintf(path, "%s.aux", get_index_file());
+	fd = open(path, O_RDONLY);
+	if (fd < 0)
+		return cache_tree();
+
+	if (fstat(fd, &st))
+		return cache_tree();
+	size = st.st_size;
+	map = mmap(NULL, size, PROT_READ, MAP_PRIVATE, fd, 0);
+	close(fd);
+	if (map == MAP_FAILED)
+		return cache_tree();
+	it = cache_tree_read(sha1, map, size);
+	munmap(map, size);
+	if (!it)
+		return cache_tree();
+	return it;
+}
+
+int write_cache_tree(const unsigned char *sha1, struct cache_tree *root)
+{
+	char path[PATH_MAX];
+	unsigned long size = 0;
+	void *buf, *buffer;
+	int fd, ret = -1;
+
+	sprintf(path, "%s.aux", get_index_file());
+	if (!root) {
+		unlink(path);
+		return -1;
+	}
+	fd = open(path, O_WRONLY|O_CREAT, 0666);
+	if (fd < 0)
+		return -1;
+	buffer = buf = cache_tree_write(sha1, root, &size);
+	while (size) {
+		int written = xwrite(fd, buf, size);
+		if (written <= 0)
+			goto fail;
+		buf += written;
+		size -= written;
+	}
+	ret = 0;
+
+ fail:
+	close(fd);
+	free(buffer);
+	if (ret)
+		unlink(path);
+	return ret;
+}
diff --git a/cache-tree.h b/cache-tree.h
new file mode 100644
index 0000000000..7b149afdc5
--- /dev/null
+++ b/cache-tree.h
@@ -0,0 +1,29 @@
+#ifndef CACHE_TREE_H
+#define CACHE_TREE_H
+
+struct cache_tree;
+struct cache_tree_sub {
+	struct cache_tree *cache_tree;
+	int namelen;
+	int used;
+	char name[FLEX_ARRAY];
+};
+
+struct cache_tree {
+	int entry_count; /* negative means "invalid" */
+	unsigned char sha1[20];
+	int subtree_nr;
+	int subtree_alloc;
+	struct cache_tree_sub **down;
+};
+
+struct cache_tree *cache_tree(void);
+void cache_tree_free(struct cache_tree *);
+void cache_tree_invalidate_path(struct cache_tree *, const char *);
+
+int write_cache_tree(const unsigned char *, struct cache_tree *);
+struct cache_tree *read_cache_tree(unsigned char *);
+int cache_tree_update(struct cache_tree *, struct cache_entry **, int, int);
+
+
+#endif