diff --git a/Upgrade/V5.hs b/Upgrade/V5.hs
index 98ec5df091..3ed6288ed6 100644
--- a/Upgrade/V5.hs
+++ b/Upgrade/V5.hs
@@ -15,6 +15,8 @@ import Annex.InodeSentinal
 import Annex.Link
 import Annex.CatFile
 import Annex.WorkTree
+import Annex.UUID
+import Logs.Location
 import qualified Annex.Content as Content
 import qualified Database.Keys
 import qualified Annex.Direct as Direct
@@ -102,14 +104,24 @@ upgradeDirectWorkTree = do
 					=<< inRepo (toTopFilePath f)
 	go _ = noop
 
-	fromdirect f k = whenM (Direct.goodContent k f) $ do
-		-- If linkToAnnex fails for some reason, the work tree file
-		-- still has the content; the annex object file is just
-		-- not populated with it. Since the work tree file
-		-- is recorded as an associated file, things will still
-		-- work that way, it's just not ideal.
-		ic <- withTSDelta (liftIO . genInodeCache f)
-		void $ Content.linkToAnnex k f ic
+	fromdirect f k = ifM (Direct.goodContent k f)
+		( do
+			-- If linkToAnnex fails for some reason, the work tree
+			-- file still has the content; the annex object file
+			-- is just not populated with it. Since the work tree
+			-- file is recorded as an associated file, things will
+			-- still work that way, it's just not ideal.
+			ic <- withTSDelta (liftIO . genInodeCache f)
+			void $ Content.linkToAnnex k f ic
+		, unlessM (Content.inAnnex k) $ do
+			-- Worktree file was deleted or modified;
+			-- if there are no other copies of the content
+			-- then it's been lost.
+			locs <- Direct.associatedFiles k
+			unlessM (anyM (Direct.goodContent k) locs) $ do
+				u <- getUUID
+				logChange k u InfoMissing
+		)
 	
 	writepointer f k = liftIO $ do
 		nukeFile f
diff --git a/doc/bugs/direct_mode_upgrade_with_deleted_file.mdwn b/doc/bugs/direct_mode_upgrade_with_deleted_file.mdwn
index c62f2a396b..dd9eb69720 100644
--- a/doc/bugs/direct_mode_upgrade_with_deleted_file.mdwn
+++ b/doc/bugs/direct_mode_upgrade_with_deleted_file.mdwn
@@ -8,6 +8,8 @@ But `git whereis` thinks the content is present, which it's not any longer.
 Seems that the upgrade process needs to notice when a deleted file was the
 only copy of the content, and set its content as not present.
 
+> [[done]] --[[Joey]]
+
 And `git fsck` doesn't find a problem, despite the content not being
 present. And does not fix the location log.
 This part may not be specific to this case, seems it must be some bug in