diff --git a/git-gui/GIT-VERSION-GEN b/git-gui/GIT-VERSION-GEN
index 79f1c527ff..8fac8cb410 100755
--- a/git-gui/GIT-VERSION-GEN
+++ b/git-gui/GIT-VERSION-GEN
@@ -1,20 +1,53 @@
 #!/bin/sh
 
 GVF=GIT-VERSION-FILE
-DEF_VER=v0.5.GIT
+DEF_VER=0.6.GITGUI
 
 LF='
 '
 
-# First try git-describe, then see if there is a version file
-# (included in release tarballs), then default
-if VN=$(git describe --abbrev=4 HEAD 2>/dev/null) &&
+tree_search ()
+{
+	head=$1
+	tree=$2
+	for p in $(git rev-list --parents --max-count=1 $head 2>/devnull)
+	do
+		test $tree = $(git rev-parse $p^{tree} 2>/dev/null) &&
+		vn=$(git describe --abbrev=4 $p 2>/dev/null) &&
+		case "$vn" in
+		gitgui-[0-9]*) echo $vn; break;;
+		esac
+	done
+}
+
+# We may be a subproject, so try looking for the merge
+# commit that supplied this directory content if we are
+# not at the toplevel.  We probably will always be the
+# second parent in the commit, but we shouldn't rely on
+# that fact.
+#
+# If we are at the toplevel or the merge assumption fails
+# try looking for a gitgui-* tag, or fallback onto the
+# distributed version file.
+
+if prefix="$(git rev-parse --show-prefix 2>/dev/null)"
+   test -n "$prefix" &&
+   head=$(git rev-list --max-count=1 HEAD -- . 2>/dev/null) &&
+   tree=$(git rev-parse --verify "HEAD:$prefix" 2>/dev/null) &&
+   VN=$(tree_search $head $tree)
    case "$VN" in
-   *$LF*) (exit 1) ;;
-   v[0-9]*) : happy ;;
+   gitgui-[0-9]*) : happy ;;
+   *) (exit 1) ;;
    esac
 then
-	VN=$(echo "$VN" | sed -e 's/-/./g');
+	VN=$(echo "$VN" | sed -e 's/^gitgui-//;s/-/./g');
+elif VN=$(git describe --abbrev=4 HEAD 2>/dev/null) &&
+   case "$VN" in
+   gitgui-[0-9]*) : happy ;;
+   *) (exit 1) ;;
+   esac
+then
+	VN=$(echo "$VN" | sed -e 's/^gitgui-//;s/-/./g');
 elif test -f version
 then
 	VN=$(cat version) || VN="$DEF_VER"
@@ -22,8 +55,6 @@ else
 	VN="$DEF_VER"
 fi
 
-VN=$(expr "$VN" : v*'\(.*\)')
-
 dirty=$(sh -c 'git diff-index --name-only HEAD' 2>/dev/null) || dirty=
 case "$dirty" in
 '')
@@ -34,13 +65,13 @@ esac
 
 if test -r $GVF
 then
-	VC=$(sed -e 's/^GIT_VERSION = //' <$GVF)
+	VC=$(sed -e 's/^GITGUI_VERSION = //' <$GVF)
 else
 	VC=unset
 fi
 test "$VN" = "$VC" || {
-	echo >&2 "GIT_VERSION = $VN"
-	echo "GIT_VERSION = $VN" >$GVF
+	echo >&2 "GITGUI_VERSION = $VN"
+	echo "GITGUI_VERSION = $VN" >$GVF
 }
 
 
diff --git a/git-gui/Makefile b/git-gui/Makefile
index 8fade69127..fd82d9d16d 100644
--- a/git-gui/Makefile
+++ b/git-gui/Makefile
@@ -12,18 +12,22 @@ ifndef SHELL_PATH
 	SHELL_PATH = /bin/sh
 endif
 
-gitexecdir := $(shell git --exec-path)
-INSTALL = install
+ifndef gitexecdir
+	gitexecdir := $(shell git --exec-path)
+endif
+
+ifndef INSTALL
+	INSTALL = install
+endif
 
 DESTDIR_SQ = $(subst ','\'',$(DESTDIR))
 gitexecdir_SQ = $(subst ','\'',$(gitexecdir))
-
 SHELL_PATH_SQ = $(subst ','\'',$(SHELL_PATH))
 
 $(patsubst %.sh,%,$(SCRIPT_SH)) : % : %.sh
 	rm -f $@ $@+
 	sed -e '1s|#!.*/sh|#!$(SHELL_PATH_SQ)|' \
-		-e 's/@@GIT_VERSION@@/$(GIT_VERSION)/g' \
+		-e 's/@@GITGUI_VERSION@@/$(GITGUI_VERSION)/g' \
 		$@.sh >$@+
 	chmod +x $@+
 	mv $@+ $@
@@ -31,7 +35,7 @@ $(patsubst %.sh,%,$(SCRIPT_SH)) : % : %.sh
 $(GITGUI_BUILT_INS): git-gui
 	rm -f $@ && ln git-gui $@
 
-# These can record GIT_VERSION
+# These can record GITGUI_VERSION
 $(patsubst %.sh,%,$(SCRIPT_SH)): GIT-VERSION-FILE
 
 all:: $(ALL_PROGRAMS)
@@ -41,8 +45,12 @@ install: all
 	$(INSTALL) git-gui '$(DESTDIR_SQ)$(gitexecdir_SQ)'
 	$(foreach p,$(GITGUI_BUILT_INS), rm -f '$(DESTDIR_SQ)$(gitexecdir_SQ)/$p' && ln '$(DESTDIR_SQ)$(gitexecdir_SQ)/git-gui' '$(DESTDIR_SQ)$(gitexecdir_SQ)/$p' ;)
 
+dist-version:
+	@mkdir -p $(TARDIR)
+	@echo $(GITGUI_VERSION) > $(TARDIR)/version
+
 clean::
 	rm -f $(ALL_PROGRAMS) GIT-VERSION-FILE
 
-.PHONY: all install clean
+.PHONY: all install dist-version clean
 .PHONY: .FORCE-GIT-VERSION-FILE
diff --git a/git-gui/git-gui.sh b/git-gui/git-gui.sh
index ea16be43ac..f5010dd47a 100755
--- a/git-gui/git-gui.sh
+++ b/git-gui/git-gui.sh
@@ -2,7 +2,7 @@
 # Tcl ignores the next line -*- tcl -*- \
 exec wish "$0" -- "$@"
 
-set appvers {@@GIT_VERSION@@}
+set appvers {@@GITGUI_VERSION@@}
 set copyright {
 Copyright © 2006, 2007 Shawn Pearce, Paul Mackerras.