diff --git a/CHANGELOG b/CHANGELOG
index fcbadc1cf1..3a50cd4495 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -14,6 +14,8 @@ git-annex (7.20181106) UNRELEASED; urgency=medium
     be clearer about what the problem is and how to resolve it.
   * export, sync --content: Avoid unnecessarily trying to upload files
     to an exporttree remote that already contains the files.
+  * smudge: When passed a file located outside the working tree, eg by git
+    diff, avoid erroring out.
 
  -- Joey Hess <id@joeyh.name>  Tue, 06 Nov 2018 12:44:27 -0400
 
diff --git a/Command/Smudge.hs b/Command/Smudge.hs
index a526f997f1..1a6b7a64fc 100644
--- a/Command/Smudge.hs
+++ b/Command/Smudge.hs
@@ -18,6 +18,7 @@ import Logs.Location
 import qualified Database.Keys
 import qualified Git.BuildVersion
 import Git.FilePath
+import qualified Git
 import qualified Git.Ref
 import Backend
 
@@ -77,11 +78,14 @@ smudge file = do
 clean :: FilePath -> CommandStart
 clean file = do
 	b <- liftIO $ B.hGetContents stdin
-	case parseLinkOrPointer b of
-		Just k -> do
-			getMoveRaceRecovery k file
-			liftIO $ B.hPut stdout b
-		Nothing -> go b =<< catKeyFile file
+	ifM fileoutsiderepo
+		( liftIO $ B.hPut stdout b
+		, case parseLinkOrPointer b of
+			Just k -> do
+				getMoveRaceRecovery k file
+				liftIO $ B.hPut stdout b
+			Nothing -> go b =<< catKeyFile file
+		)
 	stop
   where
 	go b oldkey = ifM (shouldAnnex file oldkey)
@@ -130,6 +134,13 @@ clean file = do
 		, hardlinkFileTmp = False
 		}
 
+	-- git diff can run the clean filter on files outside the
+	-- repository; can't annex those
+	fileoutsiderepo = do
+	        repopath <- liftIO . absPath =<< fromRepo Git.repoPath
+		filepath <- liftIO $ absPath file
+		return $ not $ dirContains repopath filepath
+
 -- New files are annexed as configured by annex.largefiles, with a default
 -- of annexing them.
 -- 
diff --git a/doc/bugs/v6_smudge_filter_breaks_git_diff_for_files_outside_the_repository.mdwn b/doc/bugs/v6_smudge_filter_breaks_git_diff_for_files_outside_the_repository.mdwn
index 313869aa54..54e70ea0fb 100644
--- a/doc/bugs/v6_smudge_filter_breaks_git_diff_for_files_outside_the_repository.mdwn
+++ b/doc/bugs/v6_smudge_filter_breaks_git_diff_for_files_outside_the_repository.mdwn
@@ -22,3 +22,5 @@ $ git diff ../file1.txt ../file2.txt
 ### What version of git-annex are you using? On what operating system?
 
 6.20180913-1~bpo9+1 on Debian Stretch + backports.
+
+> [[fixed|done]] --[[Joey]]