diff --git a/pager.c b/pager.c
index dac358f047..975955ba82 100644
--- a/pager.c
+++ b/pager.c
@@ -11,8 +11,6 @@
  * something different on Windows.
  */
 
-static int spawned_pager;
-
 #ifndef WIN32
 static void pager_preexec(void)
 {
@@ -78,7 +76,7 @@ void setup_pager(void)
 	if (!pager)
 		return;
 
-	spawned_pager = 1; /* means we are emitting to terminal */
+	setenv("GIT_PAGER_IN_USE", "true", 1);
 
 	/* spawn the pager */
 	pager_argv[0] = pager;
@@ -109,10 +107,6 @@ void setup_pager(void)
 int pager_in_use(void)
 {
 	const char *env;
-
-	if (spawned_pager)
-		return 1;
-
 	env = getenv("GIT_PAGER_IN_USE");
 	return env ? git_config_bool("GIT_PAGER_IN_USE", env) : 0;
 }
diff --git a/t/t7006-pager.sh b/t/t7006-pager.sh
index 2ac729f40c..4884e1b40c 100755
--- a/t/t7006-pager.sh
+++ b/t/t7006-pager.sh
@@ -181,6 +181,17 @@ test_expect_success 'color when writing to a file intended for a pager' '
 	colorful colorful.log
 '
 
+test_expect_success TTY 'colors are sent to pager for external commands' '
+	test_config alias.externallog "!git log" &&
+	test_config color.ui auto &&
+	(
+		TERM=vt100 &&
+		export TERM &&
+		test_terminal git -p externallog
+	) &&
+	colorful paginated.out
+'
+
 # Use this helper to make it easy for the caller of your
 # terminal-using function to specify whether it should fail.
 # If you write