diff --git a/builtin/fsmonitor--daemon.c b/builtin/fsmonitor--daemon.c
index 6011fe42ee..899355c55a 100644
--- a/builtin/fsmonitor--daemon.c
+++ b/builtin/fsmonitor--daemon.c
@@ -1424,6 +1424,17 @@ int cmd_fsmonitor__daemon(int argc, const char **argv, const char *prefix)
 		die(_("invalid 'ipc-threads' value (%d)"),
 		    fsmonitor__ipc_threads);
 
+	prepare_repo_settings(the_repository);
+	fsm_settings__set_ipc(the_repository);
+
+	if (fsm_settings__get_mode(the_repository) == FSMONITOR_MODE_INCOMPATIBLE) {
+		struct strbuf buf_reason = STRBUF_INIT;
+		fsm_settings__get_reason(the_repository, &buf_reason);
+		error("%s '%s'", buf_reason.buf, xgetcwd());
+		strbuf_release(&buf_reason);
+		return -1;
+	}
+
 	if (!strcmp(subcmd, "start"))
 		return !!try_to_start_background_daemon();
 
diff --git a/builtin/update-index.c b/builtin/update-index.c
index 79db3ff37e..3f1ed95549 100644
--- a/builtin/update-index.c
+++ b/builtin/update-index.c
@@ -1216,6 +1216,14 @@ int cmd_update_index(int argc, const char **argv, const char *prefix)
 	if (fsmonitor > 0) {
 		enum fsmonitor_mode fsm_mode = fsm_settings__get_mode(r);
 
+		if (fsm_mode == FSMONITOR_MODE_INCOMPATIBLE) {
+			struct strbuf buf_reason = STRBUF_INIT;
+			fsm_settings__get_reason(r, &buf_reason);
+			error("%s", buf_reason.buf);
+			strbuf_release(&buf_reason);
+			return -1;
+		}
+
 		if (fsm_mode == FSMONITOR_MODE_DISABLED) {
 			warning(_("core.useBuiltinFSMonitor is unset; "
 				"set it if you really want to enable the "
diff --git a/fsmonitor-settings.c b/fsmonitor-settings.c
index 2770266f5e..5a803a41d5 100644
--- a/fsmonitor-settings.c
+++ b/fsmonitor-settings.c
@@ -9,19 +9,57 @@
  */
 struct fsmonitor_settings {
 	enum fsmonitor_mode mode;
+	enum fsmonitor_reason reason;
 	char *hook_path;
 };
 
-void fsm_settings__set_ipc(struct repository *r)
+static void set_incompatible(struct repository *r,
+			     enum fsmonitor_reason reason)
 {
 	struct fsmonitor_settings *s = r->settings.fsmonitor;
 
+	s->mode = FSMONITOR_MODE_INCOMPATIBLE;
+	s->reason = reason;
+}
+
+static int check_for_incompatible(struct repository *r)
+{
+	if (!r->worktree) {
+		/*
+		 * Bare repositories don't have a working directory and
+		 * therefore have nothing to watch.
+		 */
+		set_incompatible(r, FSMONITOR_REASON_BARE);
+		return 1;
+	}
+
+	return 0;
+}
+
+static struct fsmonitor_settings *s_init(struct repository *r)
+{
+	if (!r->settings.fsmonitor)
+		CALLOC_ARRAY(r->settings.fsmonitor, 1);
+
+	return r->settings.fsmonitor;
+}
+
+void fsm_settings__set_ipc(struct repository *r)
+{
+	struct fsmonitor_settings *s = s_init(r);
+
+	if (check_for_incompatible(r))
+		return;
+
 	s->mode = FSMONITOR_MODE_IPC;
 }
 
 void fsm_settings__set_hook(struct repository *r, const char *path)
 {
-	struct fsmonitor_settings *s = r->settings.fsmonitor;
+	struct fsmonitor_settings *s = s_init(r);
+
+	if (check_for_incompatible(r))
+		return;
 
 	s->mode = FSMONITOR_MODE_HOOK;
 	s->hook_path = strdup(path);
@@ -29,9 +67,10 @@ void fsm_settings__set_hook(struct repository *r, const char *path)
 
 void fsm_settings__set_disabled(struct repository *r)
 {
-	struct fsmonitor_settings *s = r->settings.fsmonitor;
+	struct fsmonitor_settings *s = s_init(r);
 
 	s->mode = FSMONITOR_MODE_DISABLED;
+	s->reason = FSMONITOR_REASON_ZERO;
 	FREE_AND_NULL(s->hook_path);
 }
 
@@ -65,12 +104,6 @@ static int check_for_hook(struct repository *r)
 
 static void lookup_fsmonitor_settings(struct repository *r)
 {
-	struct fsmonitor_settings *s;
-
-	CALLOC_ARRAY(s, 1);
-
-	r->settings.fsmonitor = s;
-
 	if (check_for_ipc(r))
 		return;
 
@@ -95,3 +128,35 @@ const char *fsm_settings__get_hook_path(struct repository *r)
 
 	return r->settings.fsmonitor->hook_path;
 }
+
+static void create_reason_message(struct repository *r,
+				  struct strbuf *buf_reason)
+{
+	struct fsmonitor_settings *s = r->settings.fsmonitor;
+
+	switch (s->reason) {
+	case FSMONITOR_REASON_ZERO:
+		return;
+
+	case FSMONITOR_REASON_BARE:
+		strbuf_addstr(buf_reason,
+			      _("bare repos are incompatible with fsmonitor"));
+		return;
+
+	default:
+		BUG("Unhandled case in create_reason_message '%d'", s->reason);
+	}
+}
+enum fsmonitor_reason fsm_settings__get_reason(struct repository *r,
+					       struct strbuf *buf_reason)
+{
+	strbuf_reset(buf_reason);
+
+	if (!r->settings.fsmonitor)
+		lookup_fsmonitor_settings(r);
+
+	if (r->settings.fsmonitor->mode == FSMONITOR_MODE_INCOMPATIBLE)
+		create_reason_message(r, buf_reason);
+
+	return r->settings.fsmonitor->reason;
+}
diff --git a/fsmonitor-settings.h b/fsmonitor-settings.h
index 50b2923461..eb45524b1f 100644
--- a/fsmonitor-settings.h
+++ b/fsmonitor-settings.h
@@ -4,17 +4,28 @@
 struct repository;
 
 enum fsmonitor_mode {
+	FSMONITOR_MODE_INCOMPATIBLE = -1, /* see _reason */
 	FSMONITOR_MODE_DISABLED = 0,
 	FSMONITOR_MODE_HOOK = 1, /* core.fsmonitor */
 	FSMONITOR_MODE_IPC = 2,  /* core.useBuiltinFSMonitor */
 };
 
+/*
+ * Incompatibility reasons.
+ */
+enum fsmonitor_reason {
+	FSMONITOR_REASON_ZERO = 0,
+	FSMONITOR_REASON_BARE = 1,
+};
+
 void fsm_settings__set_ipc(struct repository *r);
 void fsm_settings__set_hook(struct repository *r, const char *path);
 void fsm_settings__set_disabled(struct repository *r);
 
 enum fsmonitor_mode fsm_settings__get_mode(struct repository *r);
 const char *fsm_settings__get_hook_path(struct repository *r);
+enum fsmonitor_reason fsm_settings__get_reason(struct repository *r,
+					       struct strbuf *buf_reason);
 
 struct fsmonitor_settings;
 
diff --git a/t/t7519-status-fsmonitor.sh b/t/t7519-status-fsmonitor.sh
index a6308acf00..51b2218601 100755
--- a/t/t7519-status-fsmonitor.sh
+++ b/t/t7519-status-fsmonitor.sh
@@ -55,6 +55,32 @@ test_lazy_prereq UNTRACKED_CACHE '
 	test $ret -ne 1
 '
 
+# Test that we detect and disallow repos that are incompatible with FSMonitor.
+test_expect_success 'incompatible bare repo' '
+	test_when_finished "rm -rf ./bare-clone actual expect" &&
+	git init --bare bare-clone &&
+	cat >expect <<-\EOF &&
+	error: bare repos are incompatible with fsmonitor
+	EOF
+
+	test_must_fail \
+		git -C ./bare-clone -c core.fsmonitor=foo \
+			update-index --fsmonitor 2>actual &&
+	test_cmp expect actual &&
+
+	test_must_fail \
+		git -C ./bare-clone -c core.usebuiltinfsmonitor=true \
+			update-index --fsmonitor 2>actual &&
+	test_cmp expect actual
+'
+
+test_expect_success FSMONITOR_DAEMON 'run fsmonitor-daemon in bare repo' '
+	test_when_finished "rm -rf ./bare-clone actual" &&
+	git init --bare bare-clone &&
+	test_must_fail git -C ./bare-clone fsmonitor--daemon run 2>actual &&
+	grep "bare repos are incompatible with fsmonitor" actual
+'
+
 test_expect_success 'setup' '
 	mkdir -p .git/hooks &&
 	: >tracked &&