diff --git a/dir.c b/dir.c
index 570b651a17..b0100f5533 100644
--- a/dir.c
+++ b/dir.c
@@ -1048,6 +1048,37 @@ char *get_relative_cwd(char *buffer, int size, const char *dir)
 	}
 }
 
+ * Given two normalized paths (a trailing slash is ok), if subdir is
+ * outside dir, return -1.  Otherwise return the offset in subdir that
+ * can be used as relative path to dir.
+ */
+int dir_inside_of(const char *subdir, const char *dir)
+{
+	int offset = 0;
+
+	assert(dir && subdir && *dir && *subdir);
+
+	while (*dir && *subdir && *dir == *subdir) {
+		dir++;
+		subdir++;
+		offset++;
+	}
+
+	/* hel[p]/me vs hel[l]/yeah */
+	if (*dir && *subdir)
+		return -1;
+
+	if (!*subdir)
+		return !*dir ? offset : -1; /* same dir */
+
+	/* foo/[b]ar vs foo/[] */
+	if (is_dir_sep(dir[-1]))
+		return is_dir_sep(subdir[-1]) ? offset : -1;
+
+	/* foo[/]bar vs foo[] */
+	return is_dir_sep(*subdir) ? offset + 1 : -1;
+}
+
 int is_inside_dir(const char *dir)
 {
 	char buffer[PATH_MAX];
diff --git a/dir.h b/dir.h
index 72a764ed84..86a99ed9c1 100644
--- a/dir.h
+++ b/dir.h
@@ -83,6 +83,7 @@ extern int file_exists(const char *);
 
 extern char *get_relative_cwd(char *buffer, int size, const char *dir);
 extern int is_inside_dir(const char *dir);
+extern int dir_inside_of(const char *subdir, const char *dir);
 
 static inline int is_dot_or_dotdot(const char *name)
 {
diff --git a/setup.c b/setup.c
index dadc66659a..f0468c6864 100644
--- a/setup.c
+++ b/setup.c
@@ -322,6 +322,7 @@ static const char *setup_explicit_git_dir(const char *gitdirenv,
 	const char *work_tree_env = getenv(GIT_WORK_TREE_ENVIRONMENT);
 	const char *worktree;
 	char *gitfile;
+	int offset;
 
 	if (PATH_MAX - 40 < strlen(gitdirenv))
 		die("'$%s' too big", GIT_DIR_ENVIRONMENT);
@@ -387,15 +388,15 @@ static const char *setup_explicit_git_dir(const char *gitdirenv,
 		return NULL;
 	}
 
-	if (!prefixcmp(cwd, worktree) &&
-	    cwd[strlen(worktree)] == '/') { /* cwd inside worktree */
+	offset = dir_inside_of(cwd, worktree);
+	if (offset >= 0) {	/* cwd inside worktree? */
 		set_git_dir(make_absolute_path(gitdirenv));
 		if (chdir(worktree))
 			die_errno("Could not chdir to '%s'", worktree);
 		cwd[len++] = '/';
 		cwd[len] = '\0';
 		free(gitfile);
-		return cwd + strlen(worktree) + 1;
+		return cwd + offset;
 	}
 
 	/* cwd outside worktree */