diff --git a/path.c b/path.c
index 42609524a5..af2716199b 100644
--- a/path.c
+++ b/path.c
@@ -311,8 +311,10 @@ const char *make_absolute_path(const char *path)
 			if (last_slash) {
 				*last_slash = '\0';
 				last_elem = xstrdup(last_slash + 1);
-			} else
+			} else {
 				last_elem = xstrdup(buf);
+				*buf = '\0';
+			}
 		}
 
 		if (*buf) {
diff --git a/t/t0000-basic.sh b/t/t0000-basic.sh
index 92de088227..27b54cbb12 100755
--- a/t/t0000-basic.sh
+++ b/t/t0000-basic.sh
@@ -304,6 +304,8 @@ test_expect_success 'absolute path works as expected' '
 	test "$dir" = "$(test-absolute-path $dir2)" &&
 	file="$dir"/index &&
 	test "$file" = "$(test-absolute-path $dir2/index)" &&
+	basename=blub &&
+	test "$dir/$basename" = $(cd .git && test-absolute-path $basename) &&
 	ln -s ../first/file .git/syml &&
 	sym="$(cd first; pwd -P)"/file &&
 	test "$sym" = "$(test-absolute-path $dir2/syml)"