diff --git a/Documentation/config.txt b/Documentation/config.txt
index b75dada9c3d150a05d0353bc0d78eba426f459e3..4d42bff7182ce0d0b72bd5d6f13ac11e2e2ef372 100644
--- a/Documentation/config.txt
+++ b/Documentation/config.txt
@@ -553,9 +553,19 @@ color.grep::
 	`never`), never.  When set to `true` or `auto`, use color only
 	when the output is written to the terminal.  Defaults to `false`.
 
+color.grep.external::
+	The string value of this variable is passed to an external 'grep'
+	command as a command line option if match highlighting is turned
+	on.  If set to an empty string, no option is passed at all,
+	turning off coloring for external 'grep' calls; this is the default.
+	For GNU grep, set it to `--color=always` to highlight matches even
+	when a pager is used.
+
 color.grep.match::
 	Use customized color for matches.  The value of this variable
-	may be specified as in color.branch.<slot>.
+	may be specified as in color.branch.<slot>.  It is passed using
+	the environment variables 'GREP_COLOR' and 'GREP_COLORS' when
+	calling an external 'grep'.
 
 color.interactive::
 	When set to `always`, always use colors for interactive prompts
diff --git a/builtin-grep.c b/builtin-grep.c
index e2c0f01616027fbb03e1656dbf975ba7ffcfc573..9e7e766a496e44d3f5f266f24eb3430ae046235a 100644
--- a/builtin-grep.c
+++ b/builtin-grep.c
@@ -30,6 +30,10 @@ static int grep_config(const char *var, const char *value, void *cb)
 		opt->color = git_config_colorbool(var, value, -1);
 		return 0;
 	}
+	if (!strcmp(var, "grep.color.external") ||
+	    !strcmp(var, "color.grep.external")) {
+		return git_config_string(&(opt->color_external), var, value);
+	}
 	if (!strcmp(var, "grep.color.match") ||
 	    !strcmp(var, "color.grep.match")) {
 		if (!value)
@@ -287,6 +291,21 @@ static int flush_grep(struct grep_opt *opt,
 	return status;
 }
 
+static void grep_add_color(struct strbuf *sb, const char *escape_seq)
+{
+	size_t orig_len = sb->len;
+
+	while (*escape_seq) {
+		if (*escape_seq == 'm')
+			strbuf_addch(sb, ';');
+		else if (*escape_seq != '\033' && *escape_seq  != '[')
+			strbuf_addch(sb, *escape_seq);
+		escape_seq++;
+	}
+	if (sb->len > orig_len && sb->buf[sb->len - 1] == ';')
+		strbuf_setlen(sb, sb->len - 1);
+}
+
 static int external_grep(struct grep_opt *opt, const char **paths, int cached)
 {
 	int i, nr, argc, hit, len, status;
@@ -357,6 +376,23 @@ static int external_grep(struct grep_opt *opt, const char **paths, int cached)
 		push_arg("-e");
 		push_arg(p->pattern);
 	}
+	if (opt->color) {
+		struct strbuf sb = STRBUF_INIT;
+
+		grep_add_color(&sb, opt->color_match);
+		setenv("GREP_COLOR", sb.buf, 1);
+
+		strbuf_reset(&sb);
+		strbuf_addstr(&sb, "mt=");
+		grep_add_color(&sb, opt->color_match);
+		strbuf_addstr(&sb, ":sl=:cx=:fn=:ln=:bn=:se=");
+		setenv("GREP_COLORS", sb.buf, 1);
+
+		strbuf_release(&sb);
+
+		if (opt->color_external && strlen(opt->color_external) > 0)
+			push_arg(opt->color_external);
+	}
 
 	hit = 0;
 	argc = nr;
diff --git a/grep.h b/grep.h
index 73b33ab0788d2436660db7411928d6a2b016dd50..a67005de62d1442e7ba6a8dc27320225a0d55819 100644
--- a/grep.h
+++ b/grep.h
@@ -80,6 +80,7 @@ struct grep_opt {
 	unsigned null_following_name:1;
 	int color;
 	char color_match[COLOR_MAXLEN];
+	const char *color_external;
 	int regflags;
 	unsigned pre_context;
 	unsigned post_context;