diff --git a/setup.c b/setup.c
index 82c0cc2a13..465b42a1d7 100644
--- a/setup.c
+++ b/setup.c
@@ -402,9 +402,9 @@ static void update_linked_gitdir(const char *gitfile, const char *gitdir)
 	struct strbuf path = STRBUF_INIT;
 	struct stat st;
 
-	strbuf_addf(&path, "%s/gitfile", gitdir);
+	strbuf_addf(&path, "%s/gitdir", gitdir);
 	if (stat(path.buf, &st) || st.st_mtime + 24 * 3600 < time(NULL))
-		write_file(path.buf, 0, "%s\n", gitfile);
+		write_file(path.buf, 1, "%s\n", gitfile);
 	strbuf_release(&path);
 }