diff --git a/setup.c b/setup.c
index 4612f110ee..358e139d84 100644
--- a/setup.c
+++ b/setup.c
@@ -184,6 +184,10 @@ const char *setup_git_directory_gently(int *nongit_ok)
 		}
 		return NULL;
 	bad_dir_environ:
+		if (!nongit_ok) {
+			*nongit_ok = 1;
+			return NULL;
+		}
 		path[len] = 0;
 		die("Not a git repository: '%s'", path);
 	}