diff --git a/diff.c b/diff.c
index 782896db55..bf65892f78 100644
--- a/diff.c
+++ b/diff.c
@@ -2704,10 +2704,16 @@ static void diff_fill_sha1_info(struct diff_filespec *one)
 static void strip_prefix(int prefix_length, const char **namep, const char **otherp)
 {
 	/* Strip the prefix but do not molest /dev/null and absolute paths */
-	if (*namep && **namep != '/')
+	if (*namep && **namep != '/') {
 		*namep += prefix_length;
-	if (*otherp && **otherp != '/')
+		if (**namep == '/')
+			++*namep;
+	}
+	if (*otherp && **otherp != '/') {
 		*otherp += prefix_length;
+		if (**otherp == '/')
+			++*otherp;
+	}
 }
 
 static void run_diff(struct diff_filepair *p, struct diff_options *o)
diff --git a/t/t4045-diff-relative.sh b/t/t4045-diff-relative.sh
new file mode 100755
index 0000000000..8a3c63b9e2
--- /dev/null
+++ b/t/t4045-diff-relative.sh
@@ -0,0 +1,61 @@
+#!/bin/sh
+
+test_description='diff --relative tests'
+. ./test-lib.sh
+
+test_expect_success 'setup' '
+	git commit --allow-empty -m empty &&
+	echo content >file1 &&
+	mkdir subdir &&
+	echo other content >subdir/file2 &&
+	git add . &&
+	git commit -m one
+'
+
+check_diff() {
+expect=$1; shift
+cat >expected <<EOF
+diff --git a/$expect b/$expect
+new file mode 100644
+index 0000000..25c05ef
+--- /dev/null
++++ b/$expect
+@@ -0,0 +1 @@
++other content
+EOF
+test_expect_success "-p $*" "
+	git diff -p $* HEAD^ >actual &&
+	test_cmp expected actual
+"
+}
+
+check_stat() {
+expect=$1; shift
+cat >expected <<EOF
+ $expect |    1 +
+ 1 files changed, 1 insertions(+), 0 deletions(-)
+EOF
+test_expect_success "--stat $*" "
+	git diff --stat $* HEAD^ >actual &&
+	test_cmp expected actual
+"
+}
+
+check_raw() {
+expect=$1; shift
+cat >expected <<EOF
+:000000 100644 0000000000000000000000000000000000000000 25c05ef3639d2d270e7fe765a67668f098092bc5 A	$expect
+EOF
+test_expect_success "--raw $*" "
+	git diff --no-abbrev --raw $* HEAD^ >actual &&
+	test_cmp expected actual
+"
+}
+
+for type in diff stat raw; do
+	check_$type file2 --relative=subdir/
+	check_$type file2 --relative=subdir
+	check_$type dir/file2 --relative=sub
+done
+
+test_done