diff --git a/builtin/difftool.c b/builtin/difftool.c
index b5e85ab079..d13350ce83 100644
--- a/builtin/difftool.c
+++ b/builtin/difftool.c
@@ -647,10 +647,6 @@ int cmd_difftool(int argc, const char **argv, const char *prefix)
 		OPT_END()
 	};
 
-	/* NEEDSWORK: once we no longer spawn anything, remove this */
-	setenv(GIT_DIR_ENVIRONMENT, absolute_path(get_git_dir()), 1);
-	setenv(GIT_WORK_TREE_ENVIRONMENT, absolute_path(get_git_work_tree()), 1);
-
 	git_config(difftool_config, NULL);
 	symlinks = has_symlinks;
 
@@ -661,6 +657,10 @@ int cmd_difftool(int argc, const char **argv, const char *prefix)
 	if (tool_help)
 		return print_tool_help();
 
+	/* NEEDSWORK: once we no longer spawn anything, remove this */
+	setenv(GIT_DIR_ENVIRONMENT, absolute_path(get_git_dir()), 1);
+	setenv(GIT_WORK_TREE_ENVIRONMENT, absolute_path(get_git_work_tree()), 1);
+
 	if (use_gui_tool && diff_gui_tool && *diff_gui_tool)
 		setenv("GIT_DIFF_TOOL", diff_gui_tool, 1);
 	else if (difftool_cmd) {
diff --git a/t/t7800-difftool.sh b/t/t7800-difftool.sh
index aa0ef02597..97bae54d83 100755
--- a/t/t7800-difftool.sh
+++ b/t/t7800-difftool.sh
@@ -23,6 +23,18 @@ prompt_given ()
 	test "$prompt" = "Launch 'test-tool' [Y/n]? branch"
 }
 
+test_expect_success 'basic usage requires no repo' '
+	test_expect_code 129 git difftool -h >output &&
+	grep ^usage: output &&
+	# create a ceiling directory to prevent Git from finding a repo
+	mkdir -p not/repo &&
+	test_when_finished rm -r not &&
+	test_expect_code 129 \
+	env GIT_CEILING_DIRECTORIES="$(pwd)/not" \
+	git -C not/repo difftool -h >output &&
+	grep ^usage: output
+'
+
 # Create a file on master and change it on branch
 test_expect_success 'setup' '
 	echo master >file &&