diff --git a/Annex.hs b/Annex.hs
index 202c25e4f3..e4c05c6277 100644
--- a/Annex.hs
+++ b/Annex.hs
@@ -31,6 +31,7 @@ module Annex (
 	changeGitRepo,
 	getRemoteGitConfig,
 	withCurrentState,
+	changeDirectory,
 ) where
 
 import Common
@@ -300,3 +301,14 @@ withCurrentState :: Annex a -> Annex (IO a)
 withCurrentState a = do
 	s <- getState id
 	return $ eval s a
+
+{- It's not safe to use setCurrentDirectory in the Annex monad,
+ - because the git repo paths are stored relative.
+ - Instead, use this.
+ -}
+changeDirectory :: FilePath -> Annex ()
+changeDirectory d = do
+	r <- liftIO . Git.adjustPath absPath =<< gitRepo
+	liftIO $ setCurrentDirectory d
+	r' <- liftIO $ Git.relPath r
+	changeState $ \s -> s { repo = r' }
diff --git a/Command/Sync.hs b/Command/Sync.hs
index 2299306edd..0433153b1c 100644
--- a/Command/Sync.hs
+++ b/Command/Sync.hs
@@ -29,6 +29,7 @@ import Annex.Hook
 import qualified Git.Command
 import qualified Git.LsFiles as LsFiles
 import qualified Git.Branch
+import qualified Git.Types as Git
 import qualified Git.Ref
 import qualified Git
 import qualified Remote.Git
@@ -107,7 +108,7 @@ seek rs = do
  - of the repo. This also means that sync always acts on all files in the
  - repository, not just on a subdirectory. -}
 prepMerge :: Annex ()
-prepMerge = liftIO . setCurrentDirectory =<< fromRepo Git.repoPath
+prepMerge = Annex.changeDirectory =<< fromRepo Git.repoPath
 
 syncBranch :: Git.Ref -> Git.Ref
 syncBranch = Git.Ref.under "refs/heads/synced" . fromDirectBranch