diff --git a/path.c b/path.c
index b80d2e6e4c2928..d3d3f8b8ad75b9 100644
--- a/path.c
+++ b/path.c
@@ -570,20 +570,20 @@ int normalize_path_copy(char *dst, const char *src)
 
 /*
  * path = Canonical absolute path
- * prefixes = string_list containing absolute paths
+ * prefixes = string_list containing normalized, absolute paths without
+ * trailing slashes (except for the root directory, which is denoted by "/").
  *
- * Determines, for each path in prefixes, whether the "prefix" really
+ * Determines, for each path in prefixes, whether the "prefix"
  * is an ancestor directory of path.  Returns the length of the longest
  * ancestor directory, excluding any trailing slashes, or -1 if no prefix
  * is an ancestor.  (Note that this means 0 is returned if prefixes is
  * ["/"].) "/foo" is not considered an ancestor of "/foobar".  Directories
  * are not considered to be their own ancestors.  path must be in a
  * canonical form: empty components, or "." or ".." components are not
- * allowed.  Empty strings in prefixes are ignored.
+ * allowed.
  */
 int longest_ancestor_length(const char *path, struct string_list *prefixes)
 {
-	char buf[PATH_MAX+1];
 	int i, max_len = -1;
 
 	if (!strcmp(path, "/"))
@@ -593,19 +593,15 @@ int longest_ancestor_length(const char *path, struct string_list *prefixes)
 		const char *ceil = prefixes->items[i].string;
 		int len = strlen(ceil);
 
-		if (len == 0 || len > PATH_MAX || !is_absolute_path(ceil))
-			continue;
-		if (normalize_path_copy(buf, ceil) < 0)
-			continue;
-		len = strlen(buf);
-		if (len > 0 && buf[len-1] == '/')
-			buf[--len] = '\0';
+		if (len == 1 && ceil[0] == '/')
+			len = 0; /* root matches anything, with length 0 */
+		else if (!strncmp(path, ceil, len) && path[len] == '/')
+			; /* match of length len */
+		else
+			continue; /* no match */
 
-		if (!strncmp(path, buf, len) &&
-		    path[len] == '/' &&
-		    len > max_len) {
+		if (len > max_len)
 			max_len = len;
-		}
 	}
 
 	return max_len;
diff --git a/setup.c b/setup.c
index b4cd3564561855..df97ad397643de 100644
--- a/setup.c
+++ b/setup.c
@@ -621,6 +621,28 @@ static dev_t get_device_or_die(const char *path, const char *prefix, int prefix_
 	return buf.st_dev;
 }
 
+/*
+ * A "string_list_each_func_t" function that normalizes an entry from
+ * GIT_CEILING_DIRECTORIES or discards it if unusable.
+ */
+static int normalize_ceiling_entry(struct string_list_item *item, void *unused)
+{
+	const char *ceil = item->string;
+	int len = strlen(ceil);
+	char buf[PATH_MAX+1];
+
+	if (len == 0 || len > PATH_MAX || !is_absolute_path(ceil))
+		return 0;
+	if (normalize_path_copy(buf, ceil) < 0)
+		return 0;
+	len = strlen(buf);
+	if (len > 1 && buf[len-1] == '/')
+		buf[--len] = '\0';
+	free(item->string);
+	item->string = xstrdup(buf);
+	return 1;
+}
+
 /*
  * We cannot decide in this function whether we are in the work tree or
  * not, since the config can only be read _after_ this function was called.
@@ -659,6 +681,7 @@ static const char *setup_git_directory_gently_1(int *nongit_ok)
 
 	if (env_ceiling_dirs) {
 		string_list_split(&ceiling_dirs, env_ceiling_dirs, PATH_SEP, -1);
+		filter_string_list(&ceiling_dirs, 0, normalize_ceiling_entry, NULL);
 		ceil_offset = longest_ancestor_length(cwd, &ceiling_dirs);
 		string_list_clear(&ceiling_dirs, 0);
 	}
diff --git a/t/t0060-path-utils.sh b/t/t0060-path-utils.sh
index 4ef2345982fe0e..09a42a428e1d28 100755
--- a/t/t0060-path-utils.sh
+++ b/t/t0060-path-utils.sh
@@ -93,47 +93,32 @@ norm_path /d1/s1//../s2/../../d2 /d2 POSIX
 norm_path /d1/.../d2 /d1/.../d2 POSIX
 norm_path /d1/..././../d2 /d1/d2 POSIX
 
-ancestor / "" -1
 ancestor / / -1
-ancestor /foo "" -1
-ancestor /foo : -1
-ancestor /foo ::. -1
-ancestor /foo ::..:: -1
 ancestor /foo / 0
 ancestor /foo /fo -1
 ancestor /foo /foo -1
-ancestor /foo /foo/ -1
 ancestor /foo /bar -1
-ancestor /foo /bar/ -1
 ancestor /foo /foo/bar -1
-ancestor /foo /foo:/bar/ -1
-ancestor /foo /foo/:/bar/ -1
-ancestor /foo /foo::/bar/ -1
-ancestor /foo /:/foo:/bar/ 0
-ancestor /foo /foo:/:/bar/ 0
-ancestor /foo /:/bar/:/foo 0
-ancestor /foo/bar "" -1
+ancestor /foo /foo:/bar -1
+ancestor /foo /:/foo:/bar 0
+ancestor /foo /foo:/:/bar 0
+ancestor /foo /:/bar:/foo 0
 ancestor /foo/bar / 0
 ancestor /foo/bar /fo -1
-ancestor /foo/bar foo -1
 ancestor /foo/bar /foo 4
-ancestor /foo/bar /foo/ 4
 ancestor /foo/bar /foo/ba -1
 ancestor /foo/bar /:/fo 0
 ancestor /foo/bar /foo:/foo/ba 4
 ancestor /foo/bar /bar -1
-ancestor /foo/bar /bar/ -1
-ancestor /foo/bar /fo: -1
-ancestor /foo/bar :/fo -1
-ancestor /foo/bar /foo:/bar/ 4
-ancestor /foo/bar /:/foo:/bar/ 4
-ancestor /foo/bar /foo:/:/bar/ 4
-ancestor /foo/bar /:/bar/:/fo 0
-ancestor /foo/bar /:/bar/ 0
-ancestor /foo/bar .:/foo/. 4
-ancestor /foo/bar .:/foo/.:.: 4
-ancestor /foo/bar /foo/./:.:/bar 4
-ancestor /foo/bar .:/bar -1
+ancestor /foo/bar /fo -1
+ancestor /foo/bar /foo:/bar 4
+ancestor /foo/bar /:/foo:/bar 4
+ancestor /foo/bar /foo:/:/bar 4
+ancestor /foo/bar /:/bar:/fo 0
+ancestor /foo/bar /:/bar 0
+ancestor /foo/bar /foo 4
+ancestor /foo/bar /foo:/bar 4
+ancestor /foo/bar /bar -1
 
 test_expect_success 'strip_path_suffix' '
 	test c:/msysgit = $(test-path-utils strip_path_suffix \
diff --git a/test-path-utils.c b/test-path-utils.c
index acb05600df7fa1..0092cbf3540e2f 100644
--- a/test-path-utils.c
+++ b/test-path-utils.c
@@ -1,6 +1,33 @@
 #include "cache.h"
 #include "string-list.h"
 
+/*
+ * A "string_list_each_func_t" function that normalizes an entry from
+ * GIT_CEILING_DIRECTORIES.  If the path is unusable for some reason,
+ * die with an explanation.
+ */
+static int normalize_ceiling_entry(struct string_list_item *item, void *unused)
+{
+	const char *ceil = item->string;
+	int len = strlen(ceil);
+	char buf[PATH_MAX+1];
+
+	if (len == 0)
+		die("Empty path is not supported");
+	if (len > PATH_MAX)
+		die("Path \"%s\" is too long", ceil);
+	if (!is_absolute_path(ceil))
+		die("Path \"%s\" is not absolute", ceil);
+	if (normalize_path_copy(buf, ceil) < 0)
+		die("Path \"%s\" could not be normalized", ceil);
+	len = strlen(buf);
+	if (len > 1 && buf[len-1] == '/')
+		die("Normalized path \"%s\" ended with slash", buf);
+	free(item->string);
+	item->string = xstrdup(buf);
+	return 1;
+}
+
 int main(int argc, char **argv)
 {
 	if (argc == 3 && !strcmp(argv[1], "normalize_path_copy")) {
@@ -33,10 +60,26 @@ int main(int argc, char **argv)
 	if (argc == 4 && !strcmp(argv[1], "longest_ancestor_length")) {
 		int len;
 		struct string_list ceiling_dirs = STRING_LIST_INIT_DUP;
+		char *path = xstrdup(argv[2]);
 
+		/*
+		 * We have to normalize the arguments because under
+		 * Windows, bash mangles arguments that look like
+		 * absolute POSIX paths or colon-separate lists of
+		 * absolute POSIX paths into DOS paths (e.g.,
+		 * "/foo:/foo/bar" might be converted to
+		 * "D:\Src\msysgit\foo;D:\Src\msysgit\foo\bar"),
+		 * whereas longest_ancestor_length() requires paths
+		 * that use forward slashes.
+		 */
+		if (normalize_path_copy(path, path))
+			die("Path \"%s\" could not be normalized", argv[2]);
 		string_list_split(&ceiling_dirs, argv[3], PATH_SEP, -1);
-		len = longest_ancestor_length(argv[2], &ceiling_dirs);
+		filter_string_list(&ceiling_dirs, 0,
+				   normalize_ceiling_entry, NULL);
+		len = longest_ancestor_length(path, &ceiling_dirs);
 		string_list_clear(&ceiling_dirs, 0);
+		free(path);
 		printf("%d\n", len);
 		return 0;
 	}