diff --git a/Makefile b/Makefile
index 16ab0c7f02..db7596504a 100644
--- a/Makefile
+++ b/Makefile
@@ -97,7 +97,7 @@ LIB_H=cache.h object.h blob.h tree.h commit.h tag.h delta.h epoch.h csum-file.h
 LIB_OBJS=read-cache.o sha1_file.o usage.o object.o commit.o tree.o blob.o \
 	 tag.o date.o index.o diff-delta.o patch-delta.o entry.o path.o \
 	 refs.o csum-file.o pack-check.o pkt-line.o connect.o ident.o \
-	 sha1_name.o
+	 sha1_name.o setup.o
 
 LIB_H += rev-cache.h
 LIB_OBJS += rev-cache.o
diff --git a/cache.h b/cache.h
index f14a4ce91a..6365381c17 100644
--- a/cache.h
+++ b/cache.h
@@ -140,6 +140,9 @@ extern char *get_graft_file(void);
 
 #define ALTERNATE_DB_ENVIRONMENT "GIT_ALTERNATE_OBJECT_DIRECTORIES"
 
+extern const char **get_pathspec(const char *prefix, char **pathspec);
+extern const char *setup_git_directory(void);
+
 #define alloc_nr(x) (((x)+16)*3/2)
 
 /* Initialize and use the cache information */
diff --git a/diff-cache.c b/diff-cache.c
index 47a4e09ecc..400a4cb2ad 100644
--- a/diff-cache.c
+++ b/diff-cache.c
@@ -168,10 +168,11 @@ static const char diff_cache_usage[] =
 "[<common diff options>] <tree-ish> [<path>...]"
 COMMON_DIFF_OPTIONS_HELP;
 
-int main(int argc, const char **argv)
+int main(int argc, char **argv)
 {
 	const char *tree_name = NULL;
 	unsigned char sha1[20];
+	const char *prefix = setup_git_directory();
 	const char **pathspec = NULL;
 	void *tree;
 	unsigned long size;
@@ -179,15 +180,12 @@ int main(int argc, const char **argv)
 	int allow_options = 1;
 	int i;
 
-	read_cache();
 	for (i = 1; i < argc; i++) {
 		const char *arg = argv[i];
 
 		if (!allow_options || *arg != '-') {
-			if (tree_name) {
-				pathspec = argv + i;
+			if (tree_name)
 				break;
-			}
 			tree_name = arg;
 			continue;
 		}
@@ -265,12 +263,16 @@ int main(int argc, const char **argv)
 		usage(diff_cache_usage);
 	}
 
+	pathspec = get_pathspec(prefix, argv + i);
+
 	if (find_copies_harder && detect_rename != DIFF_DETECT_COPY)
 		usage(diff_cache_usage);
 
 	if (!tree_name || get_sha1(tree_name, sha1))
 		usage(diff_cache_usage);
 
+	read_cache();
+
 	/* The rest is for paths restriction. */
 	diff_setup(diff_setup_opt);
 
diff --git a/diff-files.c b/diff-files.c
index 2e6416e386..89eb29b3e2 100644
--- a/diff-files.c
+++ b/diff-files.c
@@ -41,12 +41,12 @@ static void show_modified(int oldmode, int mode,
 	diff_change(oldmode, mode, old_sha1, sha1, path, NULL);
 }
 
-int main(int argc, const char **argv)
+int main(int argc, char **argv)
 {
 	static const unsigned char null_sha1[20] = { 0, };
 	const char **pathspec;
-	int entries = read_cache();
-	int i;
+	const char *prefix = setup_git_directory();
+	int entries, i;
 
 	while (1 < argc && argv[1][0] == '-') {
 		if (!strcmp(argv[1], "-p") || !strcmp(argv[1], "-u"))
@@ -95,8 +95,9 @@ int main(int argc, const char **argv)
 		argv++; argc--;
 	}
 
-	/* Do we have a pathspec? */
-	pathspec = (argc > 1) ? argv + 1 : NULL;
+	/* Find the directory, and set up the pathspec */
+	pathspec = get_pathspec(prefix, argv + 1);
+	entries = read_cache();
 
 	if (find_copies_harder && detect_rename != DIFF_DETECT_COPY)
 		usage(diff_files_usage);
diff --git a/diff-tree.c b/diff-tree.c
index 0dd3cdacb2..fc87902a3d 100644
--- a/diff-tree.c
+++ b/diff-tree.c
@@ -395,16 +395,25 @@ static int diff_tree_stdin(char *line)
 	return diff_tree_commit(commit, line);
 }
 
+static int count_paths(const char **paths)
+{
+	int i = 0;
+	while (*paths++)
+		i++;
+	return i;
+}
+
 static const char diff_tree_usage[] =
 "git-diff-tree [--stdin] [-m] [-s] [-v] [--pretty] [-t] "
 "[<common diff options>] <tree-ish> <tree-ish>"
 COMMON_DIFF_OPTIONS_HELP;
 
-int main(int argc, const char **argv)
+int main(int argc, char **argv)
 {
 	int nr_sha1;
 	char line[1000];
 	unsigned char sha1[2][20];
+	const char *prefix = setup_git_directory();
 
 	nr_sha1 = 0;
 	for (;;) {
@@ -523,11 +532,11 @@ int main(int argc, const char **argv)
 	if (find_copies_harder && detect_rename != DIFF_DETECT_COPY)
 		usage(diff_tree_usage);
 
-	if (argc > 0) {
+	paths = get_pathspec(prefix, argv);
+	if (paths) {
 		int i;
 
-		paths = argv;
-		nr_paths = argc;
+		nr_paths = count_paths(paths);
 		pathlens = xmalloc(nr_paths * sizeof(int));
 		for (i=0; i<nr_paths; i++)
 			pathlens[i] = strlen(paths[i]);
diff --git a/git-diff-script b/git-diff-script
index 03ed555e77..926f594be4 100755
--- a/git-diff-script
+++ b/git-diff-script
@@ -1,7 +1,5 @@
 #!/bin/sh
-. git-sh-setup-script || die "Not a git archive"
-
-rev=($(git-rev-parse --revs-only "$@"))
+rev=($(git-rev-parse --revs-only "$@")) || exit
 flags=($(git-rev-parse --no-revs --flags "$@"))
 files=($(git-rev-parse --no-revs --no-flags "$@"))
 case "${#rev[*]}" in
diff --git a/rev-parse.c b/rev-parse.c
index 1c6ae76f9a..39cf63540e 100644
--- a/rev-parse.c
+++ b/rev-parse.c
@@ -134,7 +134,8 @@ int main(int argc, char **argv)
 {
 	int i, as_is = 0;
 	unsigned char sha1[20];
-
+	const char *prefix = setup_git_directory();
+	
 	for (i = 1; i < argc; i++) {
 		char *arg = argv[i];
 		char *dotdot;
@@ -189,6 +190,10 @@ int main(int argc, char **argv)
 				for_each_ref(show_reference);
 				continue;
 			}
+			if (!strcmp(arg, "--show-prefix")) {
+				puts(prefix);
+				continue;
+			}
 			show_arg(arg);
 			continue;
 		}
diff --git a/setup.c b/setup.c
new file mode 100644
index 0000000000..453bddbb17
--- /dev/null
+++ b/setup.c
@@ -0,0 +1,110 @@
+#include "cache.h"
+
+const char **get_pathspec(const char *prefix, char **pathspec)
+{
+	char *entry = *pathspec;
+	char **p;
+	int prefixlen;
+
+	if (!prefix) {
+		char **p;
+		if (!entry)
+			return NULL;
+		p = pathspec;
+		do {
+			if (*entry != '.')
+				continue;
+			/* fixup ? */
+		} while ((entry = *++p) != NULL);
+		return (const char **) pathspec;
+	}
+
+	if (!entry) {
+		static const char *spec[2];
+		spec[0] = prefix;
+		spec[1] = NULL;
+		return spec;
+	}
+
+	/* Otherwise we have to re-write the entries.. */
+	prefixlen = strlen(prefix);
+	p = pathspec;
+	do {
+		int speclen, len = prefixlen;
+		char *n;
+
+		for (;;) {
+			if (!strcmp(entry, ".")) {
+				entry++;
+				break;
+			}
+			if (!strncmp(entry, "./", 2)) {
+				entry += 2;
+				continue;
+			}
+			if (!strncmp(entry, "../", 3)) {
+				do {
+					if (!len)
+						die("'%s' is outside repository", *p);
+					len--;
+				} while (len && prefix[len-1] != '/');
+				entry += 3;
+				continue;
+			}
+			break;
+		}
+		speclen = strlen(entry);
+		n = xmalloc(speclen + len + 1);
+		
+		memcpy(n, prefix, len);
+		memcpy(n + len, entry, speclen+1);
+		*p = n;
+	} while ((entry = *++p) != NULL);
+	return (const char **) pathspec;
+}
+
+const char *setup_git_directory(void)
+{
+	static char cwd[PATH_MAX+1];
+	int len, offset;
+
+	/*
+	 * If GIT_DIR is set explicitly, we're not going
+	 * to do any discovery
+	 */
+	if (gitenv(GIT_DIR_ENVIRONMENT))
+		return NULL;
+
+	if (!getcwd(cwd, sizeof(cwd)) || cwd[0] != '/')
+		die("Unable to read current working directory");
+
+	offset = len = strlen(cwd);
+	for (;;) {
+		/*
+		 * We always want to see a .git/HEAD and a .git/refs/
+		 * subdirectory
+		 */
+		if (!access(".git/HEAD", R_OK) && !access(".git/refs/", X_OK)) {
+			/*
+			 * Then we need either a GIT_OBJECT_DIRECTORY define
+			 * or a .git/objects/ directory
+			 */
+			if (gitenv(DB_ENVIRONMENT) || !access(".git/objects/", X_OK))
+				break;
+		}
+		chdir("..");
+		do {
+			if (!offset)
+				die("Not a git repository");
+		} while (cwd[--offset] != '/');
+	}
+
+	if (offset == len)
+		return NULL;
+
+	/* Make "offset" point to past the '/', and add a '/' at the end */
+	offset++;
+	cwd[len++] = '/';
+	cwd[len] = 0;
+	return cwd + offset;
+}