diff --git a/git.c b/git.c
index 33dd4d39d9..7def319e60 100644
--- a/git.c
+++ b/git.c
@@ -66,6 +66,7 @@ static int handle_options(const char*** argv, int* argc)
 			setenv(GIT_DIR_ENVIRONMENT, (*argv)[1], 1);
 			(*argv)++;
 			(*argc)--;
+			handled++;
 		} else if (!prefixcmp(cmd, "--git-dir=")) {
 			setenv(GIT_DIR_ENVIRONMENT, cmd + 10, 1);
 		} else if (!strcmp(cmd, "--bare")) {