diff --git a/LibGit2Sharp.Tests/BranchFixture.cs b/LibGit2Sharp.Tests/BranchFixture.cs
index 481489ada..8870155b6 100644
--- a/LibGit2Sharp.Tests/BranchFixture.cs
+++ b/LibGit2Sharp.Tests/BranchFixture.cs
@@ -1,4 +1,5 @@
 using System;
+using System.IO;
 using System.Linq;
 using LibGit2Sharp.Tests.TestHelpers;
 using NUnit.Framework;
@@ -167,6 +168,20 @@ public void CanListAllBranches()
             }
         }
 
+        [Test]
+        public void CanListAllBranchesWhenGivenWorkingDir()
+        {
+            TemporaryCloneOfTestRepo path = BuildTemporaryCloneOfTestRepo(StandardTestRepoWorkingDirPath);
+            using (var repo = new Repository(path.DirectoryPath))
+            {
+                var expectedWdBranches = new[] { "master", "origin/HEAD", "origin/br2", "origin/master", "origin/packed-test", "origin/test" };
+
+                CollectionAssert.AreEqual(expectedWdBranches, repo.Branches.Select(b => b.Name).ToArray());
+
+                repo.Branches.Count().ShouldEqual(6);
+            }
+        }
+
         [Test]
         public void CanListAllBranchesIncludingRemoteRefs()
         {
diff --git a/LibGit2Sharp/Repository.cs b/LibGit2Sharp/Repository.cs
index 11c3b70d5..9c23bebea 100644
--- a/LibGit2Sharp/Repository.cs
+++ b/LibGit2Sharp/Repository.cs
@@ -1,4 +1,5 @@
 using System;
+using System.IO;
 using LibGit2Sharp.Core;
 using LibGit2Sharp.Core.Compat;
 
@@ -22,13 +23,28 @@ public class Repository : IDisposable
 
         /// <summary>
         ///   Initializes a new instance of the <see cref = "Repository" /> class.
-        ///   <para>For a standard repository, <paramref name = "path" /> should point to the ".git" folder. For a bare repository, <paramref name = "path" /> should directly point to the repository folder.</para>
+        ///   <para>For a standard repository, <paramref name = "path" /> should either point to the ".git" folder or to the working directory. For a bare repository, <paramref name = "path" /> should directly point to the repository folder.</para>
         /// </summary>
-        /// <param name = "path">The path to the git repository to open.</param>
+        /// <param name = "path">
+        ///   The path to the git repository to open, can be either the path to the git directory (for non-bare repositories this 
+        ///   would be the ".git" folder inside the working directory) or the path to the working directory.
+        /// </param>
         public Repository(string path)
         {
             Ensure.ArgumentNotNullOrEmptyString(path, "path");
 
+            // Check if the path points to the working directory instead of the git directory
+            // by checking if the directory contains a .git directory. The same test is done
+            // in libgit2 but if it gets to add .git to the path it will mess up the ref paths 
+            // returned from git_reference_listall (and more?) by prefixing them with a '/' such
+            // that what would normally be refs/heads/master becomes /refs/heads/master and 
+            // LibGit2Sharp doesn't expect that. This is a workaround. 
+            // See https://github.com/libgit2/libgit2sharp/pull/108
+            string gitDirPath = Path.Combine(path, ".git");
+
+            if (Directory.Exists(gitDirPath))
+                path = gitDirPath;
+
             int res = NativeMethods.git_repository_open(out handle, PosixPathHelper.ToPosix(path));
             Ensure.Success(res);