diff --git a/submodule.c b/submodule.c
index 5294cef641e..e43f221af2d 100644
--- a/submodule.c
+++ b/submodule.c
@@ -362,6 +362,7 @@ void check_for_new_submodule_commits(unsigned char new_sha1[20])
 		while (parent) {
 			struct diff_options diff_opts;
 			diff_setup(&diff_opts);
+			DIFF_OPT_SET(&diff_opts, RECURSIVE);
 			diff_opts.output_format |= DIFF_FORMAT_CALLBACK;
 			diff_opts.format_callback = submodule_collect_changed_cb;
 			if (diff_setup_done(&diff_opts) < 0)
diff --git a/t/t5526-fetch-submodules.sh b/t/t5526-fetch-submodules.sh
index a1fddd4d15f..ca5b027c557 100755
--- a/t/t5526-fetch-submodules.sh
+++ b/t/t5526-fetch-submodules.sh
@@ -47,7 +47,7 @@ test_expect_success setup '
 		git init &&
 		echo subcontent > subfile &&
 		git add subfile &&
-		git submodule add "$pwd/deepsubmodule" deepsubmodule &&
+		git submodule add "$pwd/deepsubmodule" subdir/deepsubmodule &&
 		git commit -a -m new
 	) &&
 	git submodule add "$pwd/submodule" submodule &&
@@ -58,7 +58,7 @@ test_expect_success setup '
 		git submodule update --init --recursive
 	) &&
 	echo "Fetching submodule submodule" > expect.out &&
-	echo "Fetching submodule submodule/deepsubmodule" >> expect.out
+	echo "Fetching submodule submodule/subdir/deepsubmodule" >> expect.out
 '
 
 test_expect_success "fetch --recurse-submodules recurses into submodules" '
@@ -277,12 +277,12 @@ test_expect_success "Recursion picks up all submodules when necessary" '
 	(
 		cd submodule &&
 		(
-			cd deepsubmodule &&
+			cd subdir/deepsubmodule &&
 			git fetch &&
 			git checkout -q FETCH_HEAD
 		) &&
 		head1=$(git rev-parse --short HEAD^) &&
-		git add deepsubmodule &&
+		git add subdir/deepsubmodule &&
 		git commit -m "new deepsubmodule"
 		head2=$(git rev-parse --short HEAD) &&
 		echo "From $pwd/submodule" > ../expect.err.sub &&
@@ -309,12 +309,12 @@ test_expect_success "'--recurse-submodules=on-demand' doesn't recurse when no ne
 	(
 		cd submodule &&
 		(
-			cd deepsubmodule &&
+			cd subdir/deepsubmodule &&
 			git fetch &&
 			git checkout -q FETCH_HEAD
 		) &&
 		head1=$(git rev-parse --short HEAD^) &&
-		git add deepsubmodule &&
+		git add subdir/deepsubmodule &&
 		git commit -m "new deepsubmodule"
 		head2=$(git rev-parse --short HEAD) &&
 		echo "From $pwd/submodule" > ../expect.err.sub &&
@@ -345,13 +345,13 @@ test_expect_success "'--recurse-submodules=on-demand' recurses as deep as necess
 		git config fetch.recurseSubmodules false &&
 		(
 			cd submodule &&
-			git config -f .gitmodules submodule.deepsubmodule.fetchRecursive false
+			git config -f .gitmodules submodule.subdir/deepsubmodule.fetchRecursive false
 		) &&
 		git fetch --recurse-submodules=on-demand >../actual.out 2>../actual.err &&
 		git config --unset fetch.recurseSubmodules
 		(
 			cd submodule &&
-			git config --unset -f .gitmodules submodule.deepsubmodule.fetchRecursive
+			git config --unset -f .gitmodules submodule.subdir/deepsubmodule.fetchRecursive
 		)
 	) &&
 	test_i18ncmp expect.out actual.out &&