diff --git a/setup.c b/setup.c
index 65f4ac95a8..911e80988f 100644
--- a/setup.c
+++ b/setup.c
@@ -960,8 +960,14 @@ void read_gitfile_error_die(int error_code, const char *path, const char *dir)
  * will be set to an error code and NULL will be returned. If
  * return_error_code is NULL the function will die instead (for most
  * cases).
+ *
+ * If the code is READ_GITFILE_ERR_NOT_A_REPO and return_error_dir is
+ * non-NULL, the directory to which the gitfile points will be returned
+ * there. The caller is responsible for freeing the resulting string.
  */
-const char *read_gitfile_gently(const char *path, int *return_error_code)
+const char *read_gitfile_gently_with_error_dir(const char *path,
+					       int *return_error_code,
+					       char **return_error_dir)
 {
 	const int max_file_size = 1 << 20;  /* 1MB */
 	int error_code = 0;
@@ -1026,6 +1032,8 @@ const char *read_gitfile_gently(const char *path, int *return_error_code)
 	}
 	if (!is_git_directory(dir)) {
 		error_code = READ_GITFILE_ERR_NOT_A_REPO;
+		if (return_error_dir)
+			*return_error_dir = xstrdup(dir);
 		goto cleanup_return;
 	}
 
@@ -1609,11 +1617,12 @@ static enum discovery_result setup_git_directory_gently_1(struct strbuf *dir,
 		int offset = dir->len, error_code = 0;
 		char *gitdir_path = NULL;
 		char *gitfile = NULL;
+		char *error_dst = NULL;
 
 		if (offset > min_offset)
 			strbuf_addch(dir, '/');
 		strbuf_addstr(dir, DEFAULT_GIT_DIR_ENVIRONMENT);
-		gitdirenv = read_gitfile_gently(dir->buf, &error_code);
+		gitdirenv = read_gitfile_gently_with_error_dir(dir->buf, &error_code, &error_dst);
 		if (!gitdirenv) {
 			switch (error_code) {
 			case READ_GITFILE_ERR_MISSING:
@@ -1637,9 +1646,11 @@ static enum discovery_result setup_git_directory_gently_1(struct strbuf *dir,
 					return GIT_DIR_INVALID_GITFILE;
 			default:
 				if (die_on_error)
-					read_gitfile_error_die(error_code, dir->buf, NULL);
-				else
+					read_gitfile_error_die(error_code, dir->buf, error_dst);
+				else {
+					free(error_dst);
 					return GIT_DIR_INVALID_GITFILE;
+				}
 			}
 		} else {
 			gitfile = xstrdup(dir->buf);
diff --git a/setup.h b/setup.h
index b9fd96bea6..0b99fab962 100644
--- a/setup.h
+++ b/setup.h
@@ -39,7 +39,8 @@ int is_nonbare_repository_dir(struct strbuf *path);
 #define READ_GITFILE_ERR_MISSING 9
 #define READ_GITFILE_ERR_IS_A_DIR 10
 void read_gitfile_error_die(int error_code, const char *path, const char *dir);
-const char *read_gitfile_gently(const char *path, int *return_error_code);
+const char *read_gitfile_gently_with_error_dir(const char *path, int *return_error_code, char **return_error_dir);
+#define read_gitfile_gently(path, err) read_gitfile_gently_with_error_dir((path), (err), NULL)
 #define read_gitfile(path) read_gitfile_gently((path), NULL)
 const char *resolve_gitdir_gently(const char *suspect, int *return_error_code);
 #define resolve_gitdir(path) resolve_gitdir_gently((path), NULL)
diff --git a/t/t0002-gitfile.sh b/t/t0002-gitfile.sh
index dfbcdddbcc..6967e12b9f 100755
--- a/t/t0002-gitfile.sh
+++ b/t/t0002-gitfile.sh
@@ -27,7 +27,7 @@ test_expect_success 'bad setup: invalid .git file format' '
 test_expect_success 'bad setup: invalid .git file path' '
 	echo "gitdir: $REAL.not" >.git &&
 	test_must_fail git rev-parse 2>.err &&
-	test_grep "not a git repository" .err
+	test_grep "not a git repository: $REAL.not" .err
 '
 
 test_expect_success 'final setup + check rev-parse --git-dir' '