diff --git a/builtin-init-db.c b/builtin-init-db.c
index 1d7d15e8d53a7a2817ceff6f5c5e056747688c9e..c8ed5c2a0b8837c443be790eb6b4b520c6d6373b 100644
--- a/builtin-init-db.c
+++ b/builtin-init-db.c
@@ -124,8 +124,11 @@ static void copy_templates(const char *git_dir, int len, const char *template_di
 	int template_len;
 	DIR *dir;
 
-	if (!template_dir)
-		template_dir = DEFAULT_GIT_TEMPLATE_DIR;
+	if (!template_dir) {
+		template_dir = getenv("GIT_TEMPLATE_DIR");
+		if (!template_dir)
+			template_dir = DEFAULT_GIT_TEMPLATE_DIR;
+	}
 	strcpy(template_path, template_dir);
 	template_len = strlen(template_path);
 	if (template_path[template_len-1] != '/') {
diff --git a/t/test-lib.sh b/t/test-lib.sh
index ac7be769b4d4f04908a64592a5c3ad8c43c27e60..f0f9cd6be01681c90d1914eaa8a40144e2280adf 100755
--- a/t/test-lib.sh
+++ b/t/test-lib.sh
@@ -208,8 +208,9 @@ test_done () {
 # t/ subdirectory and are run in trash subdirectory.
 PATH=$(pwd)/..:$PATH
 GIT_EXEC_PATH=$(pwd)/..
+GIT_TEMPLATE_DIR=$(pwd)/../templates/blt
 HOME=$(pwd)/trash
-export PATH GIT_EXEC_PATH HOME
+export PATH GIT_EXEC_PATH GIT_TEMPLATE_DIR HOME
 
 GITPERLLIB=$(pwd)/../perl/blib/lib:$(pwd)/../perl/blib/arch/auto/Git
 export GITPERLLIB