diff --git a/dir.c b/dir.c
index d91295f2bcdcf8..e35331d3f71446 100644
--- a/dir.c
+++ b/dir.c
@@ -2746,13 +2746,33 @@ static void set_untracked_ident(struct untracked_cache *uc)
 	strbuf_addch(&uc->ident, 0);
 }
 
-static void new_untracked_cache(struct index_state *istate)
+static unsigned configured_default_dir_flags(struct index_state *istate)
+{
+	/* This logic is coordinated with the setting of these flags in
+	 * wt-status.c#wt_status_collect_untracked(), and the evaluation
+	 * of the config setting in commit.c#git_status_config()
+	 */
+	char *status_untracked_files_config_value;
+	int config_outcome = repo_config_get_string(istate->repo,
+								"status.showuntrackedfiles",
+								&status_untracked_files_config_value);
+	if (!config_outcome && !strcmp(status_untracked_files_config_value, "all")) {
+		return 0;
+	} else {
+		/*
+		 * The default, if "all" is not set, is "normal" - leading us here.
+		 * If the value is "none" then it really doesn't matter.
+		 */
+		return DIR_SHOW_OTHER_DIRECTORIES | DIR_HIDE_EMPTY_DIRECTORIES;
+	}
+}
+
+static void new_untracked_cache(struct index_state *istate, unsigned flags)
 {
 	struct untracked_cache *uc = xcalloc(1, sizeof(*uc));
 	strbuf_init(&uc->ident, 100);
 	uc->exclude_per_dir = ".gitignore";
-	/* should be the same flags used by git-status */
-	uc->dir_flags = DIR_SHOW_OTHER_DIRECTORIES | DIR_HIDE_EMPTY_DIRECTORIES;
+	uc->dir_flags = flags;
 	set_untracked_ident(uc);
 	istate->untracked = uc;
 	istate->cache_changed |= UNTRACKED_CHANGED;
@@ -2761,11 +2781,13 @@ static void new_untracked_cache(struct index_state *istate)
 void add_untracked_cache(struct index_state *istate)
 {
 	if (!istate->untracked) {
-		new_untracked_cache(istate);
+		new_untracked_cache(istate,
+				configured_default_dir_flags(istate));
 	} else {
 		if (!ident_in_untracked(istate->untracked)) {
 			free_untracked_cache(istate->untracked);
-			new_untracked_cache(istate);
+			new_untracked_cache(istate,
+					configured_default_dir_flags(istate));
 		}
 	}
 }
@@ -2781,10 +2803,12 @@ void remove_untracked_cache(struct index_state *istate)
 
 static struct untracked_cache_dir *validate_untracked_cache(struct dir_struct *dir,
 						      int base_len,
-						      const struct pathspec *pathspec)
+						      const struct pathspec *pathspec,
+							  struct index_state *istate)
 {
 	struct untracked_cache_dir *root;
 	static int untracked_cache_disabled = -1;
+	unsigned configured_dir_flags;
 
 	if (!dir->untracked)
 		return NULL;
@@ -2812,17 +2836,9 @@ static struct untracked_cache_dir *validate_untracked_cache(struct dir_struct *d
 	if (base_len || (pathspec && pathspec->nr))
 		return NULL;
 
-	/* Different set of flags may produce different results */
-	if (dir->flags != dir->untracked->dir_flags ||
-	    /*
-	     * See treat_directory(), case index_nonexistent. Without
-	     * this flag, we may need to also cache .git file content
-	     * for the resolve_gitlink_ref() call, which we don't.
-	     */
-	    !(dir->flags & DIR_SHOW_OTHER_DIRECTORIES) ||
-	    /* We don't support collecting ignore files */
-	    (dir->flags & (DIR_SHOW_IGNORED | DIR_SHOW_IGNORED_TOO |
-			   DIR_COLLECT_IGNORED)))
+	/* We don't support collecting ignore files */
+	if (dir->flags & (DIR_SHOW_IGNORED | DIR_SHOW_IGNORED_TOO |
+			DIR_COLLECT_IGNORED))
 		return NULL;
 
 	/*
@@ -2845,6 +2861,40 @@ static struct untracked_cache_dir *validate_untracked_cache(struct dir_struct *d
 		return NULL;
 	}
 
+	/* We don't support using or preparing the untracked cache if
+	 * the current effective flags don't match the configured
+	 * flags.
+	 */
+	configured_dir_flags = configured_default_dir_flags(istate);
+	if (dir->flags != configured_dir_flags)
+		return NULL;
+
+	/* If the untracked structure we received does not have the same flags
+	 * as configured, but the configured flags do match the effective flags,
+	 * then we need to reset / create a new "untracked" structure to match
+	 * the new config.
+	 * Keeping the saved and used untracked cache in-line with the
+	 * configuration provides an opportunity for frequent users of
+	 * "git status -uall" to leverage the untracked cache by aligning their
+	 * configuration (setting "status.showuntrackedfiles" to "all" or
+	 * "normal" as appropriate), where previously this option was
+	 * incompatible with untracked cache and *consistently* caused
+	 * surprisingly bad performance (with fscache and fsmonitor enabled) on
+	 * Windows.
+	 *
+	 * IMPROVEMENT OPPORTUNITY: If we reworked the untracked cache storage
+	 * to not be as bound up with the desired output in a given run,
+	 * and instead iterated through and stored enough information to
+	 * correctly serve both "modes", then users could get peak performance
+	 * with or without '-uall' regardless of their
+	 * "status.showuntrackedfiles" config.
+	 */
+	if (dir->flags != dir->untracked->dir_flags) {
+		free_untracked_cache(istate->untracked);
+		new_untracked_cache(istate, configured_dir_flags);
+		dir->untracked = istate->untracked;
+	}
+
 	if (!dir->untracked->root)
 		FLEX_ALLOC_STR(dir->untracked->root, name, "");
 
@@ -2916,7 +2966,7 @@ int read_directory(struct dir_struct *dir, struct index_state *istate,
 		return dir->nr;
 	}
 
-	untracked = validate_untracked_cache(dir, len, pathspec);
+	untracked = validate_untracked_cache(dir, len, pathspec, istate);
 	if (!untracked)
 		/*
 		 * make sure untracked cache code path is disabled,