diff --git a/builtin/ls-files.c b/builtin/ls-files.c
index d449e46db551fcc6284a454e1122bdee6af1954c..a6c70dbe9ec84921108a85485a12111c854833b8 100644
--- a/builtin/ls-files.c
+++ b/builtin/ls-files.c
@@ -15,6 +15,7 @@
 #include "string-list.h"
 #include "pathspec.h"
 #include "run-command.h"
+#include "submodule.h"
 
 static int abbrev;
 static int show_deleted;
@@ -202,6 +203,10 @@ static void show_gitlink(const struct cache_entry *ce)
 {
 	struct child_process cp = CHILD_PROCESS_INIT;
 	int status;
+	char *dir;
+
+	prepare_submodule_repo_env(&cp.env_array);
+	argv_array_push(&cp.env_array, GIT_DIR_ENVIRONMENT);
 
 	if (prefix_len)
 		argv_array_pushf(&cp.env_array, "%s=%s",
@@ -217,8 +222,10 @@ static void show_gitlink(const struct cache_entry *ce)
 	argv_array_pushv(&cp.args, submodule_options.argv);
 
 	cp.git_cmd = 1;
-	cp.dir = ce->name;
+	dir = mkpathdup("%s/%s", get_git_work_tree(), ce->name);
+	cp.dir = dir;
 	status = run_command(&cp);
+	free(dir);
 	if (status)
 		exit(status);
 }
diff --git a/t/t3007-ls-files-recurse-submodules.sh b/t/t3007-ls-files-recurse-submodules.sh
index 4cf6ccf5a8eadac4cc0ebb8b3091f1f3befa73a9..ebb956fd16ccce2536591da021239453da999140 100755
--- a/t/t3007-ls-files-recurse-submodules.sh
+++ b/t/t3007-ls-files-recurse-submodules.sh
@@ -77,10 +77,22 @@ test_expect_success 'ls-files recurses more than 1 level' '
 	git -C submodule/subsub commit -m "add d" &&
 	git -C submodule submodule add ./subsub &&
 	git -C submodule commit -m "added subsub" &&
+	git submodule absorbgitdirs &&
 	git ls-files --recurse-submodules >actual &&
 	test_cmp expect actual
 '
 
+test_expect_success 'ls-files works with GIT_DIR' '
+	cat >expect <<-\EOF &&
+	.gitmodules
+	c
+	subsub/d
+	EOF
+
+	git --git-dir=submodule/.git ls-files --recurse-submodules >actual &&
+	test_cmp expect actual
+'
+
 test_expect_success '--recurse-submodules and pathspecs setup' '
 	echo e >submodule/subsub/e.txt &&
 	git -C submodule/subsub add e.txt &&