diff --git a/refs.c b/refs.c
index 662a9e6f9e..0648df2b6c 100644
--- a/refs.c
+++ b/refs.c
@@ -1307,6 +1307,7 @@ struct ref_update *ref_transaction_add_update(
 		const char *refname, unsigned int flags,
 		const struct object_id *new_oid,
 		const struct object_id *old_oid,
+		const struct object_id *peeled,
 		const char *new_target, const char *old_target,
 		const char *committer_info,
 		const char *msg)
@@ -1339,6 +1340,8 @@ struct ref_update *ref_transaction_add_update(
 		update->committer_info = xstrdup_or_null(committer_info);
 		update->msg = normalize_reflog_message(msg);
 	}
+	if (flags & REF_HAVE_PEELED)
+		oidcpy(&update->peeled, peeled);
 
 	/*
 	 * This list is generally used by the backends to avoid duplicates.
@@ -1392,6 +1395,8 @@ enum ref_transaction_error ref_transaction_update(struct ref_transaction *transa
 						  unsigned int flags, const char *msg,
 						  struct strbuf *err)
 {
+	struct object_id peeled;
+
 	assert(err);
 
 	if ((flags & REF_FORCE_CREATE_REFLOG) &&
@@ -1432,10 +1437,16 @@ enum ref_transaction_error ref_transaction_update(struct ref_transaction *transa
 				    oid_to_hex(new_oid), refname);
 			return REF_TRANSACTION_ERROR_INVALID_NEW_VALUE;
 		}
+
+		if (o->type == OBJ_TAG) {
+			if (!peel_object(transaction->ref_store->repo, new_oid, &peeled,
+					 PEEL_OBJECT_VERIFY_TAGGED_OBJECT_TYPE))
+				flags |= REF_HAVE_PEELED;
+		}
 	}
 
 	ref_transaction_add_update(transaction, refname, flags,
-				   new_oid, old_oid, new_target,
+				   new_oid, old_oid, &peeled, new_target,
 				   old_target, NULL, msg);
 
 	return 0;
@@ -1462,7 +1473,7 @@ int ref_transaction_update_reflog(struct ref_transaction *transaction,
 		return -1;
 
 	update = ref_transaction_add_update(transaction, refname, flags,
-					    new_oid, old_oid, NULL, NULL,
+					    new_oid, old_oid, NULL, NULL, NULL,
 					    committer_info, msg);
 	update->index = index;
 
diff --git a/refs/files-backend.c b/refs/files-backend.c
index f20f580fbc..d0896d0e37 100644
--- a/refs/files-backend.c
+++ b/refs/files-backend.c
@@ -1325,7 +1325,8 @@ static void prune_ref(struct files_ref_store *refs, struct ref_to_prune *r)
 	ref_transaction_add_update(
 			transaction, r->name,
 			REF_NO_DEREF | REF_HAVE_NEW | REF_HAVE_OLD | REF_IS_PRUNING,
-			null_oid(the_hash_algo), &r->oid, NULL, NULL, NULL, NULL);
+			null_oid(the_hash_algo), &r->oid, NULL, NULL, NULL,
+			NULL, NULL);
 	if (ref_transaction_commit(transaction, &err))
 		goto cleanup;
 
@@ -2468,7 +2469,7 @@ static enum ref_transaction_error split_head_update(struct ref_update *update,
 	new_update = ref_transaction_add_update(
 			transaction, "HEAD",
 			update->flags | REF_LOG_ONLY | REF_NO_DEREF | REF_LOG_VIA_SPLIT,
-			&update->new_oid, &update->old_oid,
+			&update->new_oid, &update->old_oid, &update->peeled,
 			NULL, NULL, update->committer_info, update->msg);
 	new_update->parent_update = update;
 
@@ -2530,8 +2531,8 @@ static enum ref_transaction_error split_symref_update(struct ref_update *update,
 			transaction, referent, new_flags,
 			update->new_target ? NULL : &update->new_oid,
 			update->old_target ? NULL : &update->old_oid,
-			update->new_target, update->old_target, NULL,
-			update->msg);
+			&update->peeled, update->new_target, update->old_target,
+			NULL, update->msg);
 
 	new_update->parent_update = update;
 
@@ -2994,7 +2995,7 @@ static int files_transaction_prepare(struct ref_store *ref_store,
 			ref_transaction_add_update(
 					packed_transaction, update->refname,
 					REF_HAVE_NEW | REF_NO_DEREF,
-					&update->new_oid, NULL,
+					&update->new_oid, NULL, NULL,
 					NULL, NULL, NULL, NULL);
 		}
 	}
@@ -3200,19 +3201,22 @@ static int files_transaction_finish_initial(struct files_ref_store *refs,
 			if (update->flags & REF_LOG_ONLY)
 				ref_transaction_add_update(loose_transaction, update->refname,
 							   update->flags, &update->new_oid,
-							   &update->old_oid, NULL, NULL,
+							   &update->old_oid, &update->peeled,
+							   NULL, NULL,
 							   update->committer_info, update->msg);
 			else
 				ref_transaction_add_update(loose_transaction, update->refname,
 							   update->flags & ~REF_HAVE_OLD,
 							   update->new_target ? NULL : &update->new_oid, NULL,
-							   update->new_target, NULL, update->committer_info,
+							   &update->peeled, update->new_target,
+							   NULL, update->committer_info,
 							   NULL);
 		} else {
 			ref_transaction_add_update(packed_transaction, update->refname,
 						   update->flags & ~REF_HAVE_OLD,
 						   &update->new_oid, &update->old_oid,
-						   NULL, NULL, update->committer_info, NULL);
+						   &update->peeled, NULL, NULL,
+						   update->committer_info, NULL);
 		}
 	}
 
diff --git a/refs/refs-internal.h b/refs/refs-internal.h
index d103387ebf..307dcb277b 100644
--- a/refs/refs-internal.h
+++ b/refs/refs-internal.h
@@ -39,6 +39,13 @@ struct ref_transaction;
  */
 #define REF_LOG_ONLY (1 << 7)
 
+/*
+ * The reference contains a peeled object ID. This is used when the
+ * new_oid is pointing to a tag object and the reference backend
+ * wants to also store the peeled value for optimized retrieval.
+ */
+#define REF_HAVE_PEELED (1 << 15)
+
 /*
  * Return the length of time to retry acquiring a loose reference lock
  * before giving up, in milliseconds:
@@ -92,6 +99,12 @@ struct ref_update {
 	 */
 	struct object_id old_oid;
 
+	/*
+	 * If the new_oid points to a tag object, set this to the peeled
+	 * object ID for optimized retrieval without needed to hit the odb.
+	 */
+	struct object_id peeled;
+
 	/*
 	 * If set, point the reference to this value. This can also be
 	 * used to convert regular references to become symbolic refs.
@@ -169,6 +182,7 @@ struct ref_update *ref_transaction_add_update(
 		const char *refname, unsigned int flags,
 		const struct object_id *new_oid,
 		const struct object_id *old_oid,
+		const struct object_id *peeled,
 		const char *new_target, const char *old_target,
 		const char *committer_info,
 		const char *msg);
diff --git a/refs/reftable-backend.c b/refs/reftable-backend.c
index 444b0c24e5..b0c010387d 100644
--- a/refs/reftable-backend.c
+++ b/refs/reftable-backend.c
@@ -1107,8 +1107,8 @@ static enum ref_transaction_error prepare_single_update(struct reftable_ref_stor
 		ref_transaction_add_update(
 			transaction, "HEAD",
 			u->flags | REF_LOG_ONLY | REF_NO_DEREF,
-			&u->new_oid, &u->old_oid, NULL, NULL, NULL,
-			u->msg);
+			&u->new_oid, &u->old_oid, &u->peeled, NULL, NULL,
+			NULL, u->msg);
 	}
 
 	ret = reftable_backend_read_ref(be, rewritten_ref,
@@ -1194,7 +1194,7 @@ static enum ref_transaction_error prepare_single_update(struct reftable_ref_stor
 				transaction, referent->buf, new_flags,
 				u->new_target ? NULL : &u->new_oid,
 				u->old_target ? NULL : &u->old_oid,
-				u->new_target, u->old_target,
+				&u->peeled, u->new_target, u->old_target,
 				u->committer_info, u->msg);
 
 			new_update->parent_update = u;