diff --git a/path.c b/path.c
index 79aa104712..0005df3a5f 100644
--- a/path.c
+++ b/path.c
@@ -336,7 +336,7 @@ char *enter_repo(char *path, int strict)
 
 	if (access("objects", X_OK) == 0 && access("refs", X_OK) == 0 &&
 	    validate_headref("HEAD") == 0) {
-		setenv(GIT_DIR_ENVIRONMENT, ".", 1);
+		set_git_dir(".");
 		check_repository_format();
 		return path;
 	}
diff --git a/setup.c b/setup.c
index 710e2f3008..b38cbee145 100644
--- a/setup.c
+++ b/setup.c
@@ -404,9 +404,9 @@ const char *setup_git_directory_gently(int *nongit_ok)
 				inside_work_tree = 0;
 			if (offset != len) {
 				cwd[offset] = '\0';
-				setenv(GIT_DIR_ENVIRONMENT, cwd, 1);
+				set_git_dir(cwd);
 			} else
-				setenv(GIT_DIR_ENVIRONMENT, ".", 1);
+				set_git_dir(".");
 			check_repository_format_gently(nongit_ok);
 			return NULL;
 		}