diff --git a/src/vs/workbench/parts/git/browser/gitWorkbenchContributions.ts b/src/vs/workbench/parts/git/browser/gitWorkbenchContributions.ts
index 15c7b694520afd164f72c5129390a230ea25b08d..48355bed0f7ebd924853cad16389525b04c7a1bb 100644
--- a/src/vs/workbench/parts/git/browser/gitWorkbenchContributions.ts
+++ b/src/vs/workbench/parts/git/browser/gitWorkbenchContributions.ts
@@ -26,6 +26,7 @@ import output = require('vs/workbench/parts/output/common/output');
 import {SyncActionDescriptor} from 'vs/platform/actions/common/actions';
 import {EditorBrowserRegistry} from 'vs/editor/browser/editorBrowserExtensions';
 import confregistry = require('vs/platform/configuration/common/configurationRegistry');
+import {IConfigurationService} from 'vs/platform/configuration/common/configuration';
 import quickopen = require('vs/workbench/browser/quickopen');
 import editorcontrib = require('vs/workbench/parts/git/browser/gitEditorContributions');
 import {IActivityService, ProgressBadge, NumberBadge} from 'vs/workbench/services/activity/common/activityService';
@@ -52,6 +53,7 @@ export class StatusUpdater implements ext.IWorkbenchContribution
 	private eventService: IEventService;
 	private activityService:IActivityService;
 	private messageService:IMessageService;
+	private configurationService:IConfigurationService;
 	private progressBadgeDelayer: async.Delayer<void>;
 	private toDispose: lifecycle.IDisposable[];
 
@@ -59,12 +61,14 @@ export class StatusUpdater implements ext.IWorkbenchContribution
 		@IGitService gitService: IGitService,
 		@IEventService eventService: IEventService,
 		@IActivityService activityService: IActivityService,
-		@IMessageService messageService: IMessageService
+		@IMessageService messageService: IMessageService,
+		@IConfigurationService configurationService: IConfigurationService
 	) {
 		this.gitService = gitService;
 		this.eventService = eventService;
 		this.activityService = activityService;
 		this.messageService = messageService;
+		this.configurationService = configurationService;
 
 		this.progressBadgeDelayer = new async.Delayer<void>(200);
 
@@ -86,9 +90,21 @@ export class StatusUpdater implements ext.IWorkbenchContribution
 	}
 
 	private showChangesBadge(): void {
-		var count = this.gitService.getModel().getStatus().getGroups().map((g1: git.IStatusGroup) => {
-			return g1.all().length;
-		}).reduce((a, b) => a + b, 0);
+		const config = this.configurationService.getConfiguration<git.IGitConfiguration>('git');
+
+		// only use the filter version of the map callback if filtering by file status is really necessary
+		var mapper = (g1: git.IStatusGroup) => {
+				return g1.all().filter((f1: git.IFileStatus) => {
+					return f1.getStatus() !== git.Status.UNTRACKED;
+				}).length;
+			};
+
+		// no need to filter by file status if we count both tracked and untracked files
+		if (config.countUntracked) {
+			mapper = (g1: git.IStatusGroup) => g1.all().length;
+		}
+
+		var count = this.gitService.getModel().getStatus().getGroups().map(mapper).reduce((a, b) => a + b, 0);
 
 		var badge = new NumberBadge(count, (num)=>{ return nls.localize('gitPendingChangesBadge', '{0} pending changes', num); });
 
@@ -547,6 +563,11 @@ export function registerContributions(): void {
 				type: 'boolean',
 				description: nls.localize('confirmSync', "Confirm before synchronizing git repositories."),
 				default: false
+			},
+			'git.countUntracked': {
+				type: 'boolean',
+				description: nls.localize('countUntracked', "Count untracked files in the changes badge."),
+				default: true
 			}
 		}
 	});
diff --git a/src/vs/workbench/parts/git/common/git.ts b/src/vs/workbench/parts/git/common/git.ts
index 6968a5f7b3d03b51690e707aa1ead2d37717848c..b00d9a1f3f17fcd302a7dd59f7d2f3c3117899e7 100644
--- a/src/vs/workbench/parts/git/common/git.ts
+++ b/src/vs/workbench/parts/git/common/git.ts
@@ -240,6 +240,7 @@ export interface IGitConfiguration {
 	enableLongCommitWarning: boolean;
 	allowLargeRepositories: boolean;
 	confirmSync: boolean;
+	countUntracked: boolean;
 }
 
 // Service interfaces