diff --git a/dir.c b/dir.c
index 1c55dc3e36..1d17b800cf 100644
--- a/dir.c
+++ b/dir.c
@@ -49,7 +49,7 @@ struct cached_dir {
 static enum path_treatment read_directory_recursive(struct dir_struct *dir,
 	struct index_state *istate, const char *path, int len,
 	struct untracked_cache_dir *untracked,
-	int check_only, const struct pathspec *pathspec);
+	int check_only, int stop_at_first_file, const struct pathspec *pathspec);
 static int get_dtype(struct dirent *de, struct index_state *istate,
 		     const char *path, int len);
 
@@ -1404,8 +1404,13 @@ static enum path_treatment treat_directory(struct dir_struct *dir,
 
 	untracked = lookup_untracked(dir->untracked, untracked,
 				     dirname + baselen, len - baselen);
+
+	/*
+	 * If this is an excluded directory, then we only need to check if
+	 * the directory contains any files.
+	 */
 	return read_directory_recursive(dir, istate, dirname, len,
-					untracked, 1, pathspec);
+					untracked, 1, exclude, pathspec);
 }
 
 /*
@@ -1633,7 +1638,7 @@ static enum path_treatment treat_path_fast(struct dir_struct *dir,
 		 * with check_only set.
 		 */
 		return read_directory_recursive(dir, istate, path->buf, path->len,
-						cdir->ucd, 1, pathspec);
+						cdir->ucd, 1, 0, pathspec);
 	/*
 	 * We get path_recurse in the first run when
 	 * directory_exists_in_index() returns index_nonexistent. We
@@ -1793,12 +1798,20 @@ static void close_cached_dir(struct cached_dir *cdir)
  * Also, we ignore the name ".git" (even if it is not a directory).
  * That likely will not change.
  *
+ * If 'stop_at_first_file' is specified, 'path_excluded' is returned
+ * to signal that a file was found. This is the least significant value that
+ * indicates that a file was encountered that does not depend on the order of
+ * whether an untracked or exluded path was encountered first.
+ *
  * Returns the most significant path_treatment value encountered in the scan.
+ * If 'stop_at_first_file' is specified, `path_excluded` is the most
+ * significant path_treatment value that will be returned.
  */
+
 static enum path_treatment read_directory_recursive(struct dir_struct *dir,
 	struct index_state *istate, const char *base, int baselen,
 	struct untracked_cache_dir *untracked, int check_only,
-	const struct pathspec *pathspec)
+	int stop_at_first_file, const struct pathspec *pathspec)
 {
 	struct cached_dir cdir;
 	enum path_treatment state, subdir_state, dir_state = path_none;
@@ -1832,12 +1845,34 @@ static enum path_treatment read_directory_recursive(struct dir_struct *dir,
 			subdir_state =
 				read_directory_recursive(dir, istate, path.buf,
 							 path.len, ud,
-							 check_only, pathspec);
+							 check_only, stop_at_first_file, pathspec);
 			if (subdir_state > dir_state)
 				dir_state = subdir_state;
 		}
 
 		if (check_only) {
+			if (stop_at_first_file) {
+				/*
+				 * If stopping at first file, then
+				 * signal that a file was found by
+				 * returning `path_excluded`. This is
+				 * to return a consistent value
+				 * regardless of whether an ignored or
+				 * excluded file happened to be
+				 * encountered 1st.
+				 *
+				 * In current usage, the
+				 * `stop_at_first_file` is passed when
+				 * an ancestor directory has matched
+				 * an exclude pattern, so any found
+				 * files will be excluded.
+				 */
+				if (dir_state >= path_excluded) {
+					dir_state = path_excluded;
+					break;
+				}
+			}
+
 			/* abort early if maximum state has been reached */
 			if (dir_state == path_untracked) {
 				if (cdir.fdir)
@@ -2108,7 +2143,7 @@ int read_directory(struct dir_struct *dir, struct index_state *istate,
 		 */
 		dir->untracked = NULL;
 	if (!len || treat_leading_path(dir, istate, path, len, pathspec))
-		read_directory_recursive(dir, istate, path, len, untracked, 0, pathspec);
+		read_directory_recursive(dir, istate, path, len, untracked, 0, 0, pathspec);
 	QSORT(dir->entries, dir->nr, cmp_dir_entry);
 	QSORT(dir->ignored, dir->ignored_nr, cmp_dir_entry);