diff --git a/read-cache.c b/read-cache.c
index a78b88a41bf..8a50ff66b30 100644
--- a/read-cache.c
+++ b/read-cache.c
@@ -849,6 +849,19 @@ struct cache_entry *make_empty_transient_cache_entry(size_t len,
 	return xcalloc(1, cache_entry_size(len));
 }
 
+enum verify_path_result {
+	PATH_OK,
+	PATH_INVALID,
+	PATH_DIR_WITH_SEP,
+};
+
+static enum verify_path_result verify_path_internal(const char *, unsigned);
+
+int verify_path(const char *path, unsigned mode)
+{
+	return verify_path_internal(path, mode) == PATH_OK;
+}
+
 struct cache_entry *make_cache_entry(struct index_state *istate,
 				     unsigned int mode,
 				     const struct object_id *oid,
@@ -859,7 +872,7 @@ struct cache_entry *make_cache_entry(struct index_state *istate,
 	struct cache_entry *ce, *ret;
 	int len;
 
-	if (!verify_path(path, mode)) {
+	if (verify_path_internal(path, mode) == PATH_INVALID) {
 		error(_("invalid path '%s'"), path);
 		return NULL;
 	}
@@ -993,60 +1006,62 @@ static int verify_dotfile(const char *rest, unsigned mode)
 	return 1;
 }
 
-int verify_path(const char *path, unsigned mode)
+static enum verify_path_result verify_path_internal(const char *path,
+						    unsigned mode)
 {
 	char c = 0;
 
 	if (has_dos_drive_prefix(path))
-		return 0;
+		return PATH_INVALID;
 
 	if (!is_valid_path(path))
-		return 0;
+		return PATH_INVALID;
 
 	goto inside;
 	for (;;) {
 		if (!c)
-			return 1;
+			return PATH_OK;
 		if (is_dir_sep(c)) {
 inside:
 			if (protect_hfs) {
 
 				if (is_hfs_dotgit(path))
-					return 0;
+					return PATH_INVALID;
 				if (S_ISLNK(mode)) {
 					if (is_hfs_dotgitmodules(path))
-						return 0;
+						return PATH_INVALID;
 				}
 			}
 			if (protect_ntfs) {
 #if defined GIT_WINDOWS_NATIVE || defined __CYGWIN__
 				if (c == '\\')
-					return 0;
+					return PATH_INVALID;
 #endif
 				if (is_ntfs_dotgit(path))
-					return 0;
+					return PATH_INVALID;
 				if (S_ISLNK(mode)) {
 					if (is_ntfs_dotgitmodules(path))
-						return 0;
+						return PATH_INVALID;
 				}
 			}
 
 			c = *path++;
 			if ((c == '.' && !verify_dotfile(path, mode)) ||
 			    is_dir_sep(c))
-				return 0;
+				return PATH_INVALID;
 			/*
 			 * allow terminating directory separators for
 			 * sparse directory entries.
 			 */
 			if (c == '\0')
-				return S_ISDIR(mode);
+				return S_ISDIR(mode) ? PATH_DIR_WITH_SEP :
+						       PATH_INVALID;
 		} else if (c == '\\' && protect_ntfs) {
 			if (is_ntfs_dotgit(path))
-				return 0;
+				return PATH_INVALID;
 			if (S_ISLNK(mode)) {
 				if (is_ntfs_dotgitmodules(path))
-					return 0;
+					return PATH_INVALID;
 			}
 		}
 
@@ -1349,7 +1364,7 @@ static int add_index_entry_with_check(struct index_state *istate, struct cache_e
 
 	if (!ok_to_add)
 		return -1;
-	if (!verify_path(ce->name, ce->ce_mode))
+	if (verify_path_internal(ce->name, ce->ce_mode) == PATH_INVALID)
 		return error(_("invalid path '%s'"), ce->name);
 
 	if (!skip_df_check &&
diff --git a/t/t3905-stash-include-untracked.sh b/t/t3905-stash-include-untracked.sh
index dd2cdcc1148..5390eec4e3b 100755
--- a/t/t3905-stash-include-untracked.sh
+++ b/t/t3905-stash-include-untracked.sh
@@ -422,4 +422,10 @@ test_expect_success 'stash show --{include,only}-untracked on stashes without un
 	test_must_be_empty actual
 '
 
+test_expect_success 'stash -u ignores sub-repository' '
+	test_when_finished "rm -rf sub-repo" &&
+	git init sub-repo &&
+	git stash -u
+'
+
 test_done