diff --git a/git/repo/base.py b/git/repo/base.py
index 20c96b228..df52137eb 100644
--- a/git/repo/base.py
+++ b/git/repo/base.py
@@ -71,6 +71,7 @@ class Repo(object):
 	re_hexsha_shortened = re.compile('^[0-9A-Fa-f]{4,40}$')
 	re_author_committer_start = re.compile(r'^(author|committer)')
 	re_tab_full_line = re.compile(r'^\t(.*)$')
+	re_git_file_gitdir = re.compile('gitdir: (.*)')
 	
 	# invariants
 	# represents the configuration level of a configuration file
@@ -113,6 +114,17 @@ def __init__(self, path=None, odbt = DefaultDBType):
 				self.git_dir = gitpath
 				self._working_tree_dir = curpath
 				break
+			if isfile(gitpath):
+				line = open(gitpath, 'r').readline().strip()
+				match = self.re_git_file_gitdir.match(line)
+				if match:
+					gitpath = match.group(1)
+					if not os.path.isabs(gitpath):
+						gitpath = os.path.normpath(join(curpath, gitpath))
+					if is_git_dir(gitpath):
+						self.git_dir = gitpath
+						self._working_tree_dir = curpath
+						break
 			curpath, dummy = os.path.split(curpath)
 			if not dummy:
 				break
diff --git a/git/test/fixtures/git_file b/git/test/fixtures/git_file
new file mode 100644
index 000000000..2efda9f50
--- /dev/null
+++ b/git/test/fixtures/git_file
@@ -0,0 +1 @@
+gitdir: ./.real
diff --git a/git/test/test_repo.py b/git/test/test_repo.py
index 18d5c1b84..a4d148d18 100644
--- a/git/test/test_repo.py
+++ b/git/test/test_repo.py
@@ -594,6 +594,23 @@ def test_repo_odbtype(self):
 			target_type = GitCmdObjectDB
 		assert isinstance(self.rorepo.odb, target_type)
 			
+	@with_rw_repo('HEAD')
+	def test_git_file(self, rwrepo):
+		# Move the .git directory to another location and create the .git file.
+		real_path_abs = os.path.abspath(join_path_native(rwrepo.working_tree_dir, '.real'))
+		os.rename(rwrepo.git_dir, real_path_abs)
+		git_file_path = join_path_native(rwrepo.working_tree_dir, '.git')
+		open(git_file_path, 'wb').write(fixture('git_file'))
+		
+		# Create a repo and make sure it's pointing to the relocated .git directory.
+		git_file_repo = Repo(rwrepo.working_tree_dir)
+		assert os.path.abspath(git_file_repo.git_dir) == real_path_abs
+		
+		# Test using an absolute gitdir path in the .git file.
+		open(git_file_path, 'wb').write('gitdir: %s\n' % real_path_abs)
+		git_file_repo = Repo(rwrepo.working_tree_dir)
+		assert os.path.abspath(git_file_repo.git_dir) == real_path_abs
+		
 	def test_submodules(self):
 		assert len(self.rorepo.submodules) == 1		# non-recursive
 		assert len(list(self.rorepo.iter_submodules())) >= 2