diff --git a/submodule.c b/submodule.c
index 5294cef641ef74ec525d8d747c82faf0bef7352a..b6dec70bd1a6b35c8ecc6a1a9953d64bfe6c4510 100644
--- a/submodule.c
+++ b/submodule.c
@@ -14,6 +14,15 @@ static struct string_list config_fetch_recurse_submodules_for_name;
 static struct string_list config_ignore_for_name;
 static int config_fetch_recurse_submodules = RECURSE_SUBMODULES_ON_DEMAND;
 static struct string_list changed_submodule_paths;
+/*
+ * The following flag is set if the .gitmodules file is unmerged. We then
+ * disable recursion for all submodules where .git/config doesn't have a
+ * matching config entry because we can't guess what might be configured in
+ * .gitmodules unless the user resolves the conflict. When a command line
+ * option is given (which always overrides configuration) this flag will be
+ * ignored.
+ */
+static int gitmodules_is_unmerged;
 
 static int add_submodule_odb(const char *path)
 {
@@ -63,6 +72,8 @@ void set_diffopt_flags_from_submodule_config(struct diff_options *diffopt,
 		ignore_option = unsorted_string_list_lookup(&config_ignore_for_name, path_option->util);
 		if (ignore_option)
 			handle_ignore_submodules_arg(diffopt, ignore_option->util);
+		else if (gitmodules_is_unmerged)
+			DIFF_OPT_SET(diffopt, IGNORE_SUBMODULES);
 	}
 }
 
@@ -82,9 +93,24 @@ void gitmodules_config(void)
 	const char *work_tree = get_git_work_tree();
 	if (work_tree) {
 		struct strbuf gitmodules_path = STRBUF_INIT;
+		int pos;
 		strbuf_addstr(&gitmodules_path, work_tree);
 		strbuf_addstr(&gitmodules_path, "/.gitmodules");
-		git_config_from_file(submodule_config, gitmodules_path.buf, NULL);
+		if (read_cache() < 0)
+			die("index file corrupt");
+		pos = cache_name_pos(".gitmodules", 11);
+		if (pos < 0) { /* .gitmodules not found or isn't merged */
+			pos = -1 - pos;
+			if (active_nr > pos) {  /* there is a .gitmodules */
+				const struct cache_entry *ce = active_cache[pos];
+				if (ce_namelen(ce) == 11 &&
+				    !memcmp(ce->name, ".gitmodules", 11))
+					gitmodules_is_unmerged = 1;
+			}
+		}
+
+		if (!gitmodules_is_unmerged)
+			git_config_from_file(submodule_config, gitmodules_path.buf, NULL);
 		strbuf_release(&gitmodules_path);
 	}
 }
@@ -434,7 +460,8 @@ int fetch_populated_submodules(int num_options, const char **options,
 					default_argv = "on-demand";
 				}
 			} else {
-				if (config_fetch_recurse_submodules == RECURSE_SUBMODULES_OFF)
+				if ((config_fetch_recurse_submodules == RECURSE_SUBMODULES_OFF) ||
+				    gitmodules_is_unmerged)
 					continue;
 				if (config_fetch_recurse_submodules == RECURSE_SUBMODULES_ON_DEMAND) {
 					if (!unsorted_string_list_lookup(&changed_submodule_paths, ce->name))
diff --git a/t/t7506-status-submodule.sh b/t/t7506-status-submodule.sh
index c8d50a65672fdc00ccb42e6b7cece44b255623f1..d31b34da83d5ad336f2355acc0d2536b9d30e3ce 100755
--- a/t/t7506-status-submodule.sh
+++ b/t/t7506-status-submodule.sh
@@ -4,17 +4,21 @@ test_description='git status for submodule'
 
 . ./test-lib.sh
 
-test_expect_success 'setup' '
-	test_create_repo sub &&
+test_create_repo_with_commit () {
+	test_create_repo "$1" &&
 	(
-		cd sub &&
+		cd "$1" &&
 		: >bar &&
 		git add bar &&
 		git commit -m " Add bar" &&
 		: >foo &&
 		git add foo &&
 		git commit -m " Add foo"
-	) &&
+	)
+}
+
+test_expect_success 'setup' '
+	test_create_repo_with_commit sub &&
 	echo output > .gitignore &&
 	git add sub .gitignore &&
 	git commit -m "Add submodule sub"
@@ -187,4 +191,84 @@ test_expect_success 'status -a clean (empty submodule dir)' '
 	test_i18ngrep "nothing to commit" output
 '
 
+cat >status_expect <<\EOF
+AA .gitmodules
+A  sub1
+EOF
+
+test_expect_success 'status with merge conflict in .gitmodules' '
+	git clone . super &&
+	test_create_repo_with_commit sub1 &&
+	test_tick &&
+	test_create_repo_with_commit sub2 &&
+	(
+		cd super &&
+		prev=$(git rev-parse HEAD) &&
+		git checkout -b add_sub1 &&
+		git submodule add ../sub1 &&
+		git commit -m "add sub1" &&
+		git checkout -b add_sub2 $prev &&
+		git submodule add ../sub2 &&
+		git commit -m "add sub2" &&
+		git checkout -b merge_conflict_gitmodules &&
+		test_must_fail git merge add_sub1 &&
+		git status -s >../status_actual 2>&1
+	) &&
+	test_cmp status_actual status_expect
+'
+
+sha1_merge_sub1=$(cd sub1 && git rev-parse HEAD)
+sha1_merge_sub2=$(cd sub2 && git rev-parse HEAD)
+short_sha1_merge_sub1=$(cd sub1 && git rev-parse --short HEAD)
+short_sha1_merge_sub2=$(cd sub2 && git rev-parse --short HEAD)
+cat >diff_expect <<\EOF
+diff --cc .gitmodules
+index badaa4c,44f999a..0000000
+--- a/.gitmodules
++++ b/.gitmodules
+@@@ -1,3 -1,3 +1,9 @@@
+++<<<<<<< HEAD
+ +[submodule "sub2"]
+ +	path = sub2
+ +	url = ../sub2
+++=======
++ [submodule "sub1"]
++ 	path = sub1
++ 	url = ../sub1
+++>>>>>>> add_sub1
+EOF
+
+cat >diff_submodule_expect <<\EOF
+diff --cc .gitmodules
+index badaa4c,44f999a..0000000
+--- a/.gitmodules
++++ b/.gitmodules
+@@@ -1,3 -1,3 +1,9 @@@
+++<<<<<<< HEAD
+ +[submodule "sub2"]
+ +	path = sub2
+ +	url = ../sub2
+++=======
++ [submodule "sub1"]
++ 	path = sub1
++ 	url = ../sub1
+++>>>>>>> add_sub1
+EOF
+
+test_expect_success 'diff with merge conflict in .gitmodules' '
+	(
+		cd super &&
+		git diff >../diff_actual 2>&1
+	) &&
+	test_cmp diff_actual diff_expect
+'
+
+test_expect_success 'diff --submodule with merge conflict in .gitmodules' '
+	(
+		cd super &&
+		git diff --submodule >../diff_submodule_actual 2>&1
+	) &&
+	test_cmp diff_submodule_actual diff_submodule_expect
+'
+
 test_done