diff --git a/Documentation/git-init.txt b/Documentation/git-init.txt
index 7151d12f349..f081b24d9d8 100644
--- a/Documentation/git-init.txt
+++ b/Documentation/git-init.txt
@@ -8,7 +8,7 @@ git-init - Create an empty git repository or reinitialize an existing one
 
 SYNOPSIS
 --------
-'git init' [-q | --quiet] [--bare] [--template=<template_directory>] [--shared[=<permissions>]]
+'git init' [-q | --quiet] [--bare] [--template=<template_directory>] [--shared[=<permissions>]] [directory]
 
 
 OPTIONS
@@ -74,6 +74,9 @@ By default, the configuration flag receive.denyNonFastForwards is enabled
 in shared repositories, so that you cannot force a non fast-forwarding push
 into it.
 
+If you name a (possibly non-existent) directory at the end of the command
+line, the command is run inside the directory (possibly after creating it).
+
 --
 
 
diff --git a/builtin-init-db.c b/builtin-init-db.c
index 4a5600631c5..b7f708de1f1 100644
--- a/builtin-init-db.c
+++ b/builtin-init-db.c
@@ -371,7 +371,7 @@ static int guess_repository_type(const char *git_dir)
 }
 
 static const char init_db_usage[] =
-"git init [-q | --quiet] [--bare] [--template=<template-directory>] [--shared[=<permissions>]]";
+"git init [-q | --quiet] [--bare] [--template=<template-directory>] [--shared[=<permissions>]] [directory]";
 
 /*
  * If you want to, you can share the DB area with any number of branches.
@@ -384,27 +384,67 @@ int cmd_init_db(int argc, const char **argv, const char *prefix)
 	const char *git_dir;
 	const char *template_dir = NULL;
 	unsigned int flags = 0;
+	int bare_given = 0;
 	int i;
 
 	for (i = 1; i < argc; i++, argv++) {
 		const char *arg = argv[1];
 		if (!prefixcmp(arg, "--template="))
 			template_dir = arg+11;
-		else if (!strcmp(arg, "--bare")) {
-			static char git_dir[PATH_MAX+1];
-			is_bare_repository_cfg = 1;
-			setenv(GIT_DIR_ENVIRONMENT, getcwd(git_dir,
-						sizeof(git_dir)), 0);
-		} else if (!strcmp(arg, "--shared"))
+		else if (!strcmp(arg, "--bare"))
+			bare_given = is_bare_repository_cfg = 1;
+		else if (!strcmp(arg, "--shared"))
 			init_shared_repository = PERM_GROUP;
 		else if (!prefixcmp(arg, "--shared="))
 			init_shared_repository = git_config_perm("arg", arg+9);
 		else if (!strcmp(arg, "-q") || !strcmp(arg, "--quiet"))
 			flags |= INIT_DB_QUIET;
-		else
+		else if (arg[0] == '-')
 			usage(init_db_usage);
+		else
+			break;
 	}
 
+	if (i == argc - 1) {
+		int mkdir_tried = 0;
+	retry:
+		if (chdir(argv[1]) < 0) {
+			if (!mkdir_tried) {
+				int saved;
+				/*
+				 * At this point we haven't read any configuration,
+				 * and we know shared_repository should always be 0;
+				 * but just in case we play safe.
+				 */
+				saved = shared_repository;
+				shared_repository = 0;
+				switch (safe_create_leading_directories_const(argv[1])) {
+				case -3:
+					errno = EEXIST;
+					/* fallthru */
+				case -1:
+					die_errno("cannot mkdir %s", argv[1]);
+					break;
+				default:
+					break;
+				}
+				shared_repository = saved;
+				if (mkdir(argv[1], 0777) < 0)
+					die_errno("cannot mkdir %s", argv[1]);
+				mkdir_tried = 1;
+				goto retry;
+			}
+			die_errno("cannot chdir to %s", argv[1]);
+		}
+	} else if (i < argc - 1) {
+		usage(init_db_usage);
+	}
+	if (bare_given == 1) {
+		static char git_dir[PATH_MAX+1];
+
+		setenv(GIT_DIR_ENVIRONMENT,
+			getcwd(git_dir, sizeof(git_dir)), 0);
+	}
 	if (init_shared_repository != -1)
 		shared_repository = init_shared_repository;
 
diff --git a/t/t0001-init.sh b/t/t0001-init.sh
index e3d846420dc..49caa29061a 100755
--- a/t/t0001-init.sh
+++ b/t/t0001-init.sh
@@ -208,4 +208,81 @@ test_expect_success 'init rejects insanely long --template' '
 	)
 '
 
+test_expect_success 'init creates a new directory' '
+	rm -fr newdir &&
+	(
+		git init newdir &&
+		test -d newdir/.git/refs
+	)
+'
+
+test_expect_success 'init creates a new bare directory' '
+	rm -fr newdir &&
+	(
+		git init --bare newdir &&
+		test -d newdir/refs
+	)
+'
+
+test_expect_success 'init recreates a directory' '
+	rm -fr newdir &&
+	(
+		mkdir newdir &&
+		git init newdir &&
+		test -d newdir/.git/refs
+	)
+'
+
+test_expect_success 'init recreates a new bare directory' '
+	rm -fr newdir &&
+	(
+		mkdir newdir &&
+		git init --bare newdir &&
+		test -d newdir/refs
+	)
+'
+
+test_expect_success 'init creates a new deep directory' '
+	rm -fr newdir &&
+	(
+		# Leading directories should honor umask while
+		# the repository itself should follow "shared"
+		umask 002 &&
+		git init --bare --shared=0660 newdir/a/b/c &&
+		test -d newdir/a/b/c/refs &&
+		ls -ld newdir/a newdir/a/b > lsab.out &&
+		! grep -v "^drwxrw[sx]r-x" ls.out &&
+		ls -ld newdir/a/b/c > lsc.out &&
+		! grep -v "^drwxrw[sx]---" lsc.out
+	)
+'
+
+test_expect_success 'init notices EEXIST (1)' '
+	rm -fr newdir &&
+	(
+		>newdir &&
+		test_must_fail git init newdir &&
+		test -f newdir
+	)
+'
+
+test_expect_success 'init notices EEXIST (2)' '
+	rm -fr newdir &&
+	(
+		mkdir newdir &&
+		>newdir/a
+		test_must_fail git init newdir/a/b &&
+		test -f newdir/a
+	)
+'
+
+test_expect_success POSIXPERM 'init notices EPERM' '
+	rm -fr newdir &&
+	(
+		mkdir newdir &&
+		chmod -w newdir &&
+		test_must_fail git init newdir/a/b
+	)
+'
+
 test_done