diff --git a/cache.h b/cache.h
index 33decd942d4985c8efc1c75fd3fa2f4adf4a56ca..d85ce86f7fd72ee90553241316c1cf6d84a2898d 100644
--- a/cache.h
+++ b/cache.h
@@ -859,7 +859,7 @@ struct cache_def {
 
 extern int has_symlink_leading_path(const char *name, int len);
 extern int threaded_has_symlink_leading_path(struct cache_def *, const char *, int);
-extern int has_symlink_or_noent_leading_path(const char *name, int len);
+extern int check_leading_path(const char *name, int len);
 extern int has_dirs_only_path(const char *name, int len, int prefix_len);
 extern void schedule_dir_for_removal(const char *name, int len);
 extern void remove_scheduled_dirs(void);
diff --git a/symlinks.c b/symlinks.c
index b7343ebd623c1031418cf5c2d932a51581fbe25d..3cacebd91adc2958e81d952523bd7cfe0078078c 100644
--- a/symlinks.c
+++ b/symlinks.c
@@ -209,15 +209,26 @@ int has_symlink_leading_path(const char *name, int len)
 }
 
 /*
- * Return non-zero if path 'name' has a leading symlink component or
+ * Return zero if path 'name' has a leading symlink component or
  * if some leading path component does not exists.
+ *
+ * Return -1 if leading path exists and is a directory.
+ *
+ * Return path length if leading path exists and is neither a
+ * directory nor a symlink.
  */
-int has_symlink_or_noent_leading_path(const char *name, int len)
+int check_leading_path(const char *name, int len)
 {
 	struct cache_def *cache = &default_cache;	/* FIXME */
-	return lstat_cache(cache, name, len,
-			   FL_SYMLINK|FL_NOENT|FL_DIR, USE_ONLY_LSTAT) &
-		(FL_SYMLINK|FL_NOENT);
+	int flags;
+	int match_len = lstat_cache_matchlen(cache, name, len, &flags,
+			   FL_SYMLINK|FL_NOENT|FL_DIR, USE_ONLY_LSTAT);
+	if (flags & (FL_SYMLINK|FL_NOENT))
+		return 0;
+	else if (flags & FL_DIR)
+		return -1;
+	else
+		return match_len;
 }
 
 /*
diff --git a/t/t7607-merge-overwrite.sh b/t/t7607-merge-overwrite.sh
index f8e8ff0b6fcc078ae5c683d858a82e154f442427..d4a499dee2ec3daabdba75eb6185778567204b0b 100755
--- a/t/t7607-merge-overwrite.sh
+++ b/t/t7607-merge-overwrite.sh
@@ -100,7 +100,7 @@ test_expect_success 'will not overwrite untracked subtree' '
 	test_cmp important sub/f/important
 '
 
-test_expect_failure 'will not overwrite untracked file in leading path' '
+test_expect_success 'will not overwrite untracked file in leading path' '
 	git reset --hard c0 &&
 	rm -rf sub &&
 	cp important sub &&
diff --git a/unpack-trees.c b/unpack-trees.c
index df1c9209d46e91071bbb68e32a4f0117741f6db1..6816113420637404bc7d1f71f4e0f54bf338c93a 100644
--- a/unpack-trees.c
+++ b/unpack-trees.c
@@ -182,7 +182,7 @@ static void display_error_msgs(struct unpack_trees_options *o)
  */
 static void unlink_entry(struct cache_entry *ce)
 {
-	if (has_symlink_or_noent_leading_path(ce->name, ce_namelen(ce)))
+	if (!check_leading_path(ce->name, ce_namelen(ce)))
 		return;
 	if (remove_or_warn(ce->ce_mode, ce->name))
 		return;
@@ -1194,18 +1194,28 @@ static int verify_absent_1(struct cache_entry *ce,
 				 enum unpack_trees_error_types error_type,
 				 struct unpack_trees_options *o)
 {
+	int len;
 	struct stat st;
 
 	if (o->index_only || o->reset || !o->update)
 		return 0;
 
-	if (has_symlink_or_noent_leading_path(ce->name, ce_namelen(ce)))
+	len = check_leading_path(ce->name, ce_namelen(ce));
+	if (!len)
 		return 0;
+	else if (len > 0) {
+		char path[PATH_MAX + 1];
+		memcpy(path, ce->name, len);
+		path[len] = 0;
+		lstat(path, &st);
 
-	if (!lstat(ce->name, &st))
+		return check_ok_to_remove(path, len, DT_UNKNOWN, NULL, &st,
+				error_type, o);
+	} else if (!lstat(ce->name, &st))
 		return check_ok_to_remove(ce->name, ce_namelen(ce),
 				ce_to_dtype(ce), ce, &st,
 				error_type, o);
+
 	return 0;
 }