diff --git a/builtin/rev-parse.c b/builtin/rev-parse.c
index 218b5f34d6..a216be63cf 100644
--- a/builtin/rev-parse.c
+++ b/builtin/rev-parse.c
@@ -1063,7 +1063,7 @@ int cmd_rev_parse(int argc,
 				continue;
 			}
 			if (!strcmp(arg, "--is-inside-git-dir")) {
-				printf("%s\n", is_inside_git_dir() ? "true"
+				printf("%s\n", is_inside_git_dir(the_repository) ? "true"
 						: "false");
 				continue;
 			}
diff --git a/setup.c b/setup.c
index ba2898473a..80f3ba0d62 100644
--- a/setup.c
+++ b/setup.c
@@ -26,7 +26,6 @@
 #include "trace2.h"
 #include "worktree.h"
 
-static int inside_git_dir = -1;
 static int inside_work_tree = -1;
 static int work_tree_config_is_bogus;
 enum allowed_bare_repo {
@@ -299,7 +298,7 @@ void verify_filename(const char *prefix,
  */
 void verify_non_filename(const char *prefix, const char *arg)
 {
-	if (!is_inside_work_tree() || is_inside_git_dir())
+	if (!is_inside_work_tree() || is_inside_git_dir(the_repository))
 		return;
 	if (*arg == '-')
 		return; /* flag */
@@ -470,11 +469,12 @@ int is_nonbare_repository_dir(struct strbuf *path)
 	return ret;
 }
 
-int is_inside_git_dir(void)
+int is_inside_git_dir(struct repository *repo)
 {
-	if (inside_git_dir < 0)
-		inside_git_dir = is_inside_dir(repo_get_git_dir(the_repository));
-	return inside_git_dir;
+	struct strbuf buf = STRBUF_INIT;
+	int ret = is_inside_dir(strbuf_realpath(&buf, repo_get_git_dir(repo), 1));
+	strbuf_release(&buf);
+	return ret;
 }
 
 int is_inside_work_tree(void)
@@ -1251,7 +1251,6 @@ static const char *setup_discovered_git_dir(struct repository *repo,
 	set_git_work_tree(".");
 	if (strcmp(gitdir, DEFAULT_GIT_DIR_ENVIRONMENT))
 		set_git_dir(repo, gitdir, 0);
-	inside_git_dir = 0;
 	inside_work_tree = 1;
 	if (offset >= cwd->len)
 		return NULL;
@@ -1287,7 +1286,6 @@ static const char *setup_bare_git_dir(struct repository *repo,
 		return setup_explicit_git_dir(repo, gitdir, cwd, repo_fmt, nongit_ok);
 	}
 
-	inside_git_dir = 1;
 	inside_work_tree = 0;
 	if (offset != cwd->len) {
 		if (chdir(cwd->buf))
diff --git a/setup.h b/setup.h
index 80bc6e5f07..115bda647c 100644
--- a/setup.h
+++ b/setup.h
@@ -4,7 +4,7 @@
 #include "refs.h"
 #include "string-list.h"
 
-int is_inside_git_dir(void);
+int is_inside_git_dir(struct repository *repo);
 int is_inside_work_tree(void);
 int get_common_dir_noenv(struct strbuf *sb, const char *gitdir);
 int get_common_dir(struct strbuf *sb, const char *gitdir);