diff --git a/src/transports/local.c b/src/transports/local.c
index 6cf0573e8..c433339a7 100644
--- a/src/transports/local.c
+++ b/src/transports/local.c
@@ -46,14 +46,12 @@ static int add_ref(transport_local *t, const char *name)
 	if (error < GIT_SUCCESS)
 		goto out;
 
-	git_oid_cpy(&head->oid, git_reference_oid(ref));
+	git_oid_cpy(&head->oid, git_reference_oid(resolved_ref));
 
 	error = git_vector_insert(&t->refs, head);
 	if (error < GIT_SUCCESS)
 		goto out;
 
-	head = NULL;
-
 	/* If it's not a tag, we don't need to try to peel it */
 	if (git__prefixcmp(name, GIT_REFS_TAGS_DIR))
 		goto out;
@@ -63,6 +61,8 @@ static int add_ref(transport_local *t, const char *name)
 		git__rethrow(error, "Failed to lookup object");
 	}
 
+	head = NULL;
+
 	/* If it's not an annotated tag, just get out */
 	if (git_object_type(obj) != GIT_OBJ_TAG)
 		goto out;
@@ -163,20 +163,30 @@ static int local_connect(git_transport *transport, int GIT_UNUSED(direction))
 	GIT_UNUSED_ARG(direction);
 
 	/* The repo layer doesn't want the prefix */
-	if (!git__prefixcmp(transport->url, file_prefix))
-		path = transport->url + strlen(file_prefix);
-	else
+	if (!git__prefixcmp(transport->url, "file://")) {
+		path = transport->url + strlen("file://");
+
+#ifdef _MSC_VER
+		/* skip the leading slash on windows before the drive letter */
+		if (*path != '/')
+			return git__throw(GIT_EINVALIDPATH, "Invalid local uri '%s'.", transport->url);
+
+		path++;
+#endif
+
+	} else
 		path = transport->url;
 
 	error = git_repository_open(&repo, path);
 	if (error < GIT_SUCCESS)
 		return git__rethrow(error, "Failed to open remote");
 
+	t->repo = repo;
+
 	error = store_refs(t);
 	if (error < GIT_SUCCESS)
 		return git__rethrow(error, "Failed to retrieve references");
 
-	t->repo = repo;
 	t->parent.connected = 1;
 
 	return GIT_SUCCESS;
diff --git a/tests-clay/clay.h b/tests-clay/clay.h
index 210273532..f58076790 100644
--- a/tests-clay/clay.h
+++ b/tests-clay/clay.h
@@ -126,6 +126,9 @@ extern void test_core_vector__0(void);
 extern void test_core_vector__1(void);
 extern void test_core_vector__2(void);
 extern void test_index_rename__single_file(void);
+extern void test_network_remotelocal__cleanup(void);
+extern void test_network_remotelocal__initialize(void);
+extern void test_network_remotelocal__retrieve_advertised_references(void);
 extern void test_network_remotes__cleanup(void);
 extern void test_network_remotes__fnmatch(void);
 extern void test_network_remotes__initialize(void);
diff --git a/tests-clay/clay_main.c b/tests-clay/clay_main.c
index af9e08877..d2c954e22 100644
--- a/tests-clay/clay_main.c
+++ b/tests-clay/clay_main.c
@@ -199,6 +199,9 @@ static const struct clay_func _clay_cb_core_vector[] = {
 static const struct clay_func _clay_cb_index_rename[] = {
     {"single_file", &test_index_rename__single_file}
 };
+static const struct clay_func _clay_cb_network_remotelocal[] = {
+    {"retrieve_advertised_references", &test_network_remotelocal__retrieve_advertised_references}
+};
 static const struct clay_func _clay_cb_network_remotes[] = {
     {"fnmatch", &test_network_remotes__fnmatch},
 	{"parsing", &test_network_remotes__parsing},
@@ -397,6 +400,12 @@ static const struct clay_suite _clay_suites[] = {
         {NULL, NULL},
         {NULL, NULL},
         _clay_cb_index_rename, 1
+    },
+	{
+        "network::remotelocal",
+        {"initialize", &test_network_remotelocal__initialize},
+        {"cleanup", &test_network_remotelocal__cleanup},
+        _clay_cb_network_remotelocal, 1
     },
 	{
         "network::remotes",
@@ -520,8 +529,8 @@ static const struct clay_suite _clay_suites[] = {
     }
 };
 
-static size_t _clay_suite_count = 36;
-static size_t _clay_callback_count = 120;
+static size_t _clay_suite_count = 37;
+static size_t _clay_callback_count = 121;
 
 /* Core test functions */
 static void
diff --git a/tests-clay/network/remotelocal.c b/tests-clay/network/remotelocal.c
new file mode 100644
index 000000000..7dad39a4b
--- /dev/null
+++ b/tests-clay/network/remotelocal.c
@@ -0,0 +1,71 @@
+#include "clay_libgit2.h"
+#include "transport.h"
+#include "buffer.h"
+#include "path.h"
+
+static git_repository *repo;
+static git_buf file_path_buf = GIT_BUF_INIT;
+static git_remote *remote;
+
+static void build_local_file_url(git_buf *out, const char *fixture)
+{
+	git_buf path_buf = GIT_BUF_INIT;
+
+	cl_git_pass(git_path_prettify_dir(&path_buf, cl_fixture(fixture), NULL));
+	cl_git_pass(git_buf_puts(out, "file://"));
+
+#ifdef _MSC_VER
+	/*
+	 * A FILE uri matches the following format: file://[host]/path
+	 * where "host" can be empty and "path" is an absolute path to the resource.
+	 * 
+	 * In this test, no hostname is used, but we have to ensure the leading triple slashes:
+	 * 
+	 * *nix: file:///usr/home/...
+	 * Windows: file:///C:/Users/...
+	 */
+	cl_git_pass(git_buf_putc(out, '/'));
+#endif
+
+	cl_git_pass(git_buf_puts(out, git_buf_cstr(&path_buf)));
+
+	git_buf_free(&path_buf);
+}
+
+void test_network_remotelocal__initialize(void)
+{
+	cl_fixture("remotelocal");
+	cl_git_pass(git_repository_init(&repo, "remotelocal/", 0));
+	cl_assert(repo != NULL);
+
+	build_local_file_url(&file_path_buf, "testrepo.git");
+
+	cl_git_pass(git_remote_new(&remote, repo, git_buf_cstr(&file_path_buf), NULL));
+	cl_git_pass(git_remote_connect(remote, GIT_DIR_FETCH));
+}
+
+void test_network_remotelocal__cleanup(void)
+{
+	git_remote_free(remote);
+	git_buf_free(&file_path_buf);
+	git_repository_free(repo);
+	cl_fixture_cleanup("remotelocal");
+}
+
+static int count_ref__cb(git_remote_head *head, void *payload)
+{
+	int *count = (int *)payload;
+
+	(*count)++;
+
+	return GIT_SUCCESS;
+}
+
+void test_network_remotelocal__retrieve_advertised_references(void)
+{
+	int how_many_refs = 0;
+
+	cl_git_pass(git_remote_ls(remote, &count_ref__cb, &how_many_refs));
+
+	cl_assert(how_many_refs == 12); /* 1 HEAD + 9 refs + 2 peeled tags */
+}