diff --git a/builtin/checkout.c b/builtin/checkout.c
index 2eefda81d8..1144c569c6 100644
--- a/builtin/checkout.c
+++ b/builtin/checkout.c
@@ -626,6 +626,7 @@ static void show_local_changes(struct object *head,
 	repo_init_revisions(the_repository, &rev, NULL);
 	rev.diffopt.flags = opts->flags;
 	rev.diffopt.output_format |= DIFF_FORMAT_NAME_STATUS;
+	rev.diffopt.flags.recursive = 1;
 	diff_setup_done(&rev.diffopt);
 	add_pending_object(&rev, head, NULL);
 	run_diff_index(&rev, 0);
diff --git a/t/t1092-sparse-checkout-compatibility.sh b/t/t1092-sparse-checkout-compatibility.sh
index f9f8c988bb..83458b092c 100755
--- a/t/t1092-sparse-checkout-compatibility.sh
+++ b/t/t1092-sparse-checkout-compatibility.sh
@@ -372,6 +372,14 @@ test_expect_success 'deep changes during checkout' '
 	test_all_match git checkout base
 '
 
+test_expect_success 'checkout with modified sparse directory' '
+	init_repos &&
+
+	test_all_match git checkout rename-in-to-out -- . &&
+	test_sparse_match git sparse-checkout reapply &&
+	test_all_match git checkout base
+'
+
 test_expect_success 'add outside sparse cone' '
 	init_repos &&