diff --git a/builtin/checkout.c b/builtin/checkout.c
index 711a923530..767ca9e18c 100644
--- a/builtin/checkout.c
+++ b/builtin/checkout.c
@@ -452,7 +452,7 @@ static void setup_branch_path(struct branch_info *branch)
 {
 	struct strbuf buf = STRBUF_INIT;
 
-	strbuf_branchname(&buf, branch->name, 0);
+	strbuf_branchname(&buf, branch->name, INTERPRET_BRANCH_LOCAL);
 	if (strcmp(buf.buf, branch->name))
 		branch->name = xstrdup(buf.buf);
 	strbuf_splice(&buf, 0, 0, "refs/heads/", 11);
diff --git a/t/t3204-branch-name-interpretation.sh b/t/t3204-branch-name-interpretation.sh
index 05e88f92d9..698d9cc4f3 100755
--- a/t/t3204-branch-name-interpretation.sh
+++ b/t/t3204-branch-name-interpretation.sh
@@ -120,4 +120,14 @@ test_expect_success 'delete branch named "@"' '
 	expect_deleted refs/heads/@
 '
 
+test_expect_success 'checkout does not treat remote @{upstream} as a branch' '
+	git update-ref refs/remotes/origin/checkout one &&
+	git branch --set-upstream-to=origin/checkout &&
+	git update-ref refs/heads/origin/checkout two &&
+	git update-ref refs/heads/remotes/origin/checkout two &&
+
+	git checkout @{upstream} &&
+	expect_branch HEAD one
+'
+
 test_done