diff --git a/builtin/ls-files.c b/builtin/ls-files.c
index d449e46db5..e9b3546ca0 100644
--- a/builtin/ls-files.c
+++ b/builtin/ls-files.c
@@ -15,6 +15,7 @@
 #include "string-list.h"
 #include "pathspec.h"
 #include "run-command.h"
+#include "submodule.h"
 
 static int abbrev;
 static int show_deleted;
@@ -203,6 +204,9 @@ static void show_gitlink(const struct cache_entry *ce)
 	struct child_process cp = CHILD_PROCESS_INIT;
 	int status;
 
+	prepare_submodule_repo_env(&cp.env_array);
+	argv_array_push(&cp.env_array, GIT_DIR_ENVIRONMENT);
+
 	if (prefix_len)
 		argv_array_pushf(&cp.env_array, "%s=%s",
 				 GIT_TOPLEVEL_PREFIX_ENVIRONMENT,
diff --git a/t/t3007-ls-files-recurse-submodules.sh b/t/t3007-ls-files-recurse-submodules.sh
index 4cf6ccf5a8..c8030dd329 100755
--- a/t/t3007-ls-files-recurse-submodules.sh
+++ b/t/t3007-ls-files-recurse-submodules.sh
@@ -77,6 +77,7 @@ test_expect_success 'ls-files recurses more than 1 level' '
 	git -C submodule/subsub commit -m "add d" &&
 	git -C submodule submodule add ./subsub &&
 	git -C submodule commit -m "added subsub" &&
+	git submodule absorbgitdirs &&
 	git ls-files --recurse-submodules >actual &&
 	test_cmp expect actual
 '