diff --git a/ignore/src/dir.rs b/ignore/src/dir.rs
index 77ee6ad3..13065c3d 100644
--- a/ignore/src/dir.rs
+++ b/ignore/src/dir.rs
@@ -254,7 +254,7 @@ impl Ignore {
             git_global_matcher: self.0.git_global_matcher.clone(),
             git_ignore_matcher: gi_matcher,
             git_exclude_matcher: gi_exclude_matcher,
-            has_git: dir.join(".git").is_dir(),
+            has_git: dir.join(".git").exists(),
             opts: self.0.opts,
         };
         (ig, errs.into_error_option())
diff --git a/tests/tests.rs b/tests/tests.rs
index 855f2484..cab1f42d 100644
--- a/tests/tests.rs
+++ b/tests/tests.rs
@@ -651,7 +651,7 @@ sherlock!(ignore_git_parent_stop, "Sherlock", ".",
     //
     // .gitignore (contains `sherlock`)
     // foo/
-    //   .git
+    //   .git/
     //   bar/
     //      sherlock
     //
@@ -674,6 +674,39 @@ sherlock:be, to a very large extent, the result of luck. Sherlock Holmes
     assert_eq!(lines, expected);
 });
 
+// Like ignore_git_parent_stop, but with a .git file instead of a .git
+// directory.
+sherlock!(ignore_git_parent_stop_file, "Sherlock", ".",
+|wd: WorkDir, mut cmd: Command| {
+    // This tests that searching parent directories for .gitignore files stops
+    // after it sees a .git *file*. A .git file is used for submodules. To test
+    // this, we create this directory hierarchy:
+    //
+    // .gitignore (contains `sherlock`)
+    // foo/
+    //   .git
+    //   bar/
+    //      sherlock
+    //
+    // And we perform the search inside `foo/bar/`. ripgrep will stop looking
+    // for .gitignore files after it sees `foo/.git`, and therefore not
+    // respect the top-level `.gitignore` containing `sherlock`.
+    wd.remove("sherlock");
+    wd.create(".gitignore", "sherlock\n");
+    wd.create_dir("foo");
+    wd.create("foo/.git", "");
+    wd.create_dir("foo/bar");
+    wd.create("foo/bar/sherlock", hay::SHERLOCK);
+    cmd.current_dir(wd.path().join("foo").join("bar"));
+
+    let lines: String = wd.stdout(&mut cmd);
+    let expected = "\
+sherlock:For the Doctor Watsons of this world, as opposed to the Sherlock
+sherlock:be, to a very large extent, the result of luck. Sherlock Holmes
+";
+    assert_eq!(lines, expected);
+});
+
 sherlock!(ignore_ripgrep_parent_no_stop, "Sherlock", ".",
 |wd: WorkDir, mut cmd: Command| {
     // This is like the `ignore_git_parent_stop` test, except it checks that