diff --git a/t/perf/p2000-sparse-operations.sh b/t/perf/p2000-sparse-operations.sh
index 54f8602f3c..2a7106b949 100755
--- a/t/perf/p2000-sparse-operations.sh
+++ b/t/perf/p2000-sparse-operations.sh
@@ -118,5 +118,6 @@ test_perf_on_all git diff --cached
 test_perf_on_all git blame $SPARSE_CONE/a
 test_perf_on_all git blame $SPARSE_CONE/f3/a
 test_perf_on_all git checkout-index -f --all
+test_perf_on_all git update-index --add --remove $SPARSE_CONE/a
 
 test_done
diff --git a/t/t1092-sparse-checkout-compatibility.sh b/t/t1092-sparse-checkout-compatibility.sh
index 0c72c854d8..91f849f541 100755
--- a/t/t1092-sparse-checkout-compatibility.sh
+++ b/t/t1092-sparse-checkout-compatibility.sh
@@ -630,6 +630,173 @@ test_expect_success 'reset with wildcard pathspec' '
 	test_all_match git ls-files -s -- folder1
 '
 
+test_expect_success 'update-index modify outside sparse definition' '
+	init_repos &&
+
+	write_script edit-contents <<-\EOF &&
+	echo text >>$1
+	EOF
+
+	# Create & modify folder1/a
+	# Note that this setup is a manual way of reaching the erroneous
+	# condition in which a `skip-worktree` enabled, outside-of-cone file
+	# exists on disk. It is used here to ensure `update-index` is stable
+	# and behaves predictably if such a condition occurs.
+	run_on_sparse mkdir -p folder1 &&
+	run_on_sparse cp ../initial-repo/folder1/a folder1/a &&
+	run_on_all ../edit-contents folder1/a &&
+
+	# If file has skip-worktree enabled, update-index does not modify the
+	# index entry
+	test_sparse_match git update-index folder1/a &&
+	test_sparse_match git status --porcelain=v2 &&
+	test_must_be_empty sparse-checkout-out &&
+
+	# When skip-worktree is disabled (even on files outside sparse cone), file
+	# is updated in the index
+	test_sparse_match git update-index --no-skip-worktree folder1/a &&
+	test_all_match git status --porcelain=v2 &&
+	test_all_match git update-index folder1/a &&
+	test_all_match git status --porcelain=v2
+'
+
+test_expect_success 'update-index --add outside sparse definition' '
+	init_repos &&
+
+	write_script edit-contents <<-\EOF &&
+	echo text >>$1
+	EOF
+
+	# Create folder1, add new file
+	run_on_sparse mkdir -p folder1 &&
+	run_on_all ../edit-contents folder1/b &&
+
+	# The *untracked* out-of-cone file is added to the index because it does
+	# not have a `skip-worktree` bit to signal that it should be ignored
+	# (unlike in `git add`, which will fail due to the file being outside
+	# the sparse checkout definition).
+	test_all_match git update-index --add folder1/b &&
+	test_all_match git status --porcelain=v2
+'
+
+# NEEDSWORK: `--remove`, unlike the rest of `update-index`, does not ignore
+# `skip-worktree` entries by default and will remove them from the index.
+# The `--ignore-skip-worktree-entries` flag must be used in conjunction with
+# `--remove` to ignore the `skip-worktree` entries and prevent their removal
+# from the index.
+test_expect_success 'update-index --remove outside sparse definition' '
+	init_repos &&
+
+	# When --ignore-skip-worktree-entries is _not_ specified:
+	# out-of-cone, not-on-disk files are removed from the index
+	test_sparse_match git update-index --remove folder1/a &&
+	cat >expect <<-EOF &&
+	D	folder1/a
+	EOF
+	test_sparse_match git diff --cached --name-status &&
+	test_cmp expect sparse-checkout-out &&
+
+	# Reset the state
+	test_all_match git reset --hard &&
+
+	# When --ignore-skip-worktree-entries is specified, out-of-cone
+	# (skip-worktree) files are ignored
+	test_sparse_match git update-index --remove --ignore-skip-worktree-entries folder1/a &&
+	test_sparse_match git diff --cached --name-status &&
+	test_must_be_empty sparse-checkout-out &&
+
+	# Reset the state
+	test_all_match git reset --hard &&
+
+	# --force-remove supercedes --ignore-skip-worktree-entries, removing
+	# a skip-worktree file from the index (and disk) when both are specified
+	# with --remove
+	test_sparse_match git update-index --force-remove --ignore-skip-worktree-entries folder1/a &&
+	cat >expect <<-EOF &&
+	D	folder1/a
+	EOF
+	test_sparse_match git diff --cached --name-status &&
+	test_cmp expect sparse-checkout-out
+'
+
+test_expect_success 'update-index with directories' '
+	init_repos &&
+
+	# update-index will exit silently when provided with a directory name
+	# containing a trailing slash
+	test_all_match git update-index deep/ folder1/ &&
+	grep "Ignoring path deep/" sparse-checkout-err &&
+	grep "Ignoring path folder1/" sparse-checkout-err &&
+
+	# When update-index is given a directory name WITHOUT a trailing slash, it will
+	# behave in different ways depending on the status of the directory on disk:
+	# * if it exists, the command exits with an error ("add individual files instead")
+	# * if it does NOT exist (e.g., in a sparse-checkout), it is assumed to be a
+	#   file and either triggers an error ("does not exist  and --remove not passed")
+	#   or is ignored completely (when using --remove)
+	test_all_match test_must_fail git update-index deep &&
+	run_on_all test_must_fail git update-index folder1 &&
+	test_must_fail git -C full-checkout update-index --remove folder1 &&
+	test_sparse_match git update-index --remove folder1 &&
+	test_all_match git status --porcelain=v2
+'
+
+test_expect_success 'update-index --again file outside sparse definition' '
+	init_repos &&
+
+	test_all_match git checkout -b test-reupdate &&
+
+	# Update HEAD without modifying the index to introduce a difference in
+	# folder1/a
+	test_sparse_match git reset --soft update-folder1 &&
+
+	# Because folder1/a differs in the index vs HEAD,
+	# `git update-index --no-skip-worktree --again` will effectively perform
+	# `git update-index --no-skip-worktree folder1/a` and remove the skip-worktree
+	# flag from folder1/a
+	test_sparse_match git update-index --no-skip-worktree --again &&
+	test_sparse_match git status --porcelain=v2 &&
+
+	cat >expect <<-EOF &&
+	D	folder1/a
+	EOF
+	test_sparse_match git diff --name-status &&
+	test_cmp expect sparse-checkout-out
+'
+
+test_expect_success 'update-index --cacheinfo' '
+	init_repos &&
+
+	deep_a_oid=$(git -C full-checkout rev-parse update-deep:deep/a) &&
+	folder2_oid=$(git -C full-checkout rev-parse update-folder2:folder2) &&
+	folder1_a_oid=$(git -C full-checkout rev-parse update-folder1:folder1/a) &&
+
+	test_all_match git update-index --cacheinfo 100644 $deep_a_oid deep/a &&
+	test_all_match git status --porcelain=v2 &&
+
+	# Cannot add sparse directory, even in sparse index case
+	test_all_match test_must_fail git update-index --add --cacheinfo 040000 $folder2_oid folder2/ &&
+
+	# Sparse match only: the new outside-of-cone entry is added *without* skip-worktree,
+	# so `git status` reports it as "deleted" in the worktree
+	test_sparse_match git update-index --add --cacheinfo 100644 $folder1_a_oid folder1/a &&
+	test_sparse_match git status --porcelain=v2 &&
+	cat >expect <<-EOF &&
+	MD folder1/a
+	EOF
+	test_sparse_match git status --short -- folder1/a &&
+	test_cmp expect sparse-checkout-out &&
+
+	# To return folder1/a to "normal" for a sparse checkout (ignored &
+	# outside-of-cone), add the skip-worktree flag.
+	test_sparse_match git update-index --skip-worktree folder1/a &&
+	cat >expect <<-EOF &&
+	S folder1/a
+	EOF
+	test_sparse_match git ls-files -t -- folder1/a &&
+	test_cmp expect sparse-checkout-out
+'
+
 test_expect_success 'merge, cherry-pick, and rebase' '
 	init_repos &&