diff --git a/tests/resources/.gitignore b/tests/resources/.gitignore
new file mode 100644
index 000000000..43a19cc9d
Binary files /dev/null and b/tests/resources/.gitignore differ
diff --git a/tests/t12-repo.c b/tests/t12-repo.c
index 4e51f1b15..055fb46dc 100644
--- a/tests/t12-repo.c
+++ b/tests/t12-repo.c
@@ -268,6 +268,144 @@ BEGIN_TEST(empty0, "test if a repository is empty or not")
 	git_repository_free(repo_empty);
 END_TEST
 
+#define DISCOVER_FOLDER TEST_RESOURCES "/discover.git"
+
+#define SUB_REPOSITORY_FOLDER_NAME "sub_repo"
+#define SUB_REPOSITORY_FOLDER DISCOVER_FOLDER "/" SUB_REPOSITORY_FOLDER_NAME
+#define SUB_REPOSITORY_FOLDER_SUB SUB_REPOSITORY_FOLDER "/sub"
+#define SUB_REPOSITORY_FOLDER_SUB_SUB SUB_REPOSITORY_FOLDER_SUB "/subsub"
+#define SUB_REPOSITORY_FOLDER_SUB_SUB_SUB SUB_REPOSITORY_FOLDER_SUB_SUB "/subsubsub"
+
+#define REPOSITORY_ALTERNATE_FOLDER DISCOVER_FOLDER "/alternate_sub_repo"
+#define REPOSITORY_ALTERNATE_FOLDER_SUB REPOSITORY_ALTERNATE_FOLDER "/sub"
+#define REPOSITORY_ALTERNATE_FOLDER_SUB_SUB REPOSITORY_ALTERNATE_FOLDER_SUB "/subsub"
+#define REPOSITORY_ALTERNATE_FOLDER_SUB_SUB_SUB REPOSITORY_ALTERNATE_FOLDER_SUB_SUB "/subsubsub"
+
+#define ALTERNATE_MALFORMED_FOLDER1 DISCOVER_FOLDER "/alternate_malformed_repo1"
+#define ALTERNATE_MALFORMED_FOLDER2 DISCOVER_FOLDER "/alternate_malformed_repo2"
+#define ALTERNATE_MALFORMED_FOLDER3 DISCOVER_FOLDER "/alternate_malformed_repo3"
+#define ALTERNATE_NOT_FOUND_FOLDER DISCOVER_FOLDER "/alternate_not_found_repo"
+
+static int ensure_repository_discover(const char *start_path, const char *ceiling_dirs, const char *expected_path)
+{
+	int error;
+	char found_path[GIT_PATH_MAX];
+
+	error = git_repository_discover(found_path, sizeof(found_path), start_path, 0, ceiling_dirs);
+	//across_fs is always 0 as we can't automate the filesystem change tests
+
+	if (error < GIT_SUCCESS)
+		return error;
+
+	return strcmp(found_path, expected_path) ? GIT_ERROR : GIT_SUCCESS;
+}
+
+static int write_file(const char *path, const char *content)
+{
+	int error;
+	git_file file;
+
+	if (gitfo_exists(path) == GIT_SUCCESS) {
+		error = gitfo_unlink(path);
+
+		if (error < GIT_SUCCESS)
+			return error;
+	}
+
+	file = gitfo_creat_force(path, 0644);
+	if (file < GIT_SUCCESS)
+		return file;
+
+	error = gitfo_write(file, (void*)content, strlen(content) * sizeof(char));
+
+	gitfo_close(file);
+
+	return error;
+}
+
+//no check is performed on ceiling_dirs length, so be sure it's long enough
+static int append_ceiling_dir(char *ceiling_dirs, const char *path)
+{
+	int len = strlen(ceiling_dirs);
+	int error;
+
+	error = gitfo_prettify_dir_path(ceiling_dirs + len + (len ? 1 : 0), GIT_PATH_MAX, path, NULL);
+	if (error < GIT_SUCCESS)
+		return git__rethrow(error, "Failed to append ceiling directory.");
+
+	if (len)
+		ceiling_dirs[len] = ':';
+
+	return GIT_SUCCESS;
+}
+
+BEGIN_TEST(discover0, "test discover")
+	git_repository *repo;
+	char ceiling_dirs[GIT_PATH_MAX * 2] = "";
+	char repository_path[GIT_PATH_MAX];
+	char sub_repository_path[GIT_PATH_MAX];
+	char found_path[GIT_PATH_MAX];
+	int error;
+	int mode = 0755;
+
+	rmdir_recurs(DISCOVER_FOLDER);
+	must_pass(append_ceiling_dir(ceiling_dirs,TEST_RESOURCES));
+	gitfo_mkdir_recurs(DISCOVER_FOLDER, mode);
+
+	must_fail(error = git_repository_discover(repository_path, sizeof(repository_path), DISCOVER_FOLDER, 0, ceiling_dirs));
+	must_be_true(error == GIT_ENOTAREPO);
+
+	must_pass(git_repository_init(&repo, DISCOVER_FOLDER, 1));
+	must_pass(git_repository_discover(repository_path, sizeof(repository_path), DISCOVER_FOLDER, 0, ceiling_dirs));
+
+	must_pass(git_repository_init(&repo, SUB_REPOSITORY_FOLDER, 0));
+	must_pass(gitfo_mkdir_recurs(SUB_REPOSITORY_FOLDER_SUB_SUB_SUB, mode));
+	must_pass(git_repository_discover(sub_repository_path, sizeof(sub_repository_path), SUB_REPOSITORY_FOLDER, 0, ceiling_dirs));
+
+	must_pass(gitfo_mkdir_recurs(SUB_REPOSITORY_FOLDER_SUB_SUB_SUB, mode));
+	must_pass(ensure_repository_discover(SUB_REPOSITORY_FOLDER_SUB, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(SUB_REPOSITORY_FOLDER_SUB_SUB, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(SUB_REPOSITORY_FOLDER_SUB_SUB_SUB, ceiling_dirs, sub_repository_path));
+
+	must_pass(gitfo_mkdir_recurs(REPOSITORY_ALTERNATE_FOLDER_SUB_SUB_SUB, mode));
+	must_pass(write_file(REPOSITORY_ALTERNATE_FOLDER "/" DOT_GIT, "gitdir: ../" SUB_REPOSITORY_FOLDER_NAME "/" DOT_GIT));
+	must_pass(write_file(REPOSITORY_ALTERNATE_FOLDER_SUB_SUB "/" DOT_GIT, "gitdir: ../../../" SUB_REPOSITORY_FOLDER_NAME "/" DOT_GIT));
+	must_pass(write_file(REPOSITORY_ALTERNATE_FOLDER_SUB_SUB_SUB "/" DOT_GIT, "gitdir: ../../../../"));
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER_SUB, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER_SUB_SUB, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER_SUB_SUB_SUB, ceiling_dirs, repository_path));
+
+	must_pass(gitfo_mkdir_recurs(ALTERNATE_MALFORMED_FOLDER1, mode));
+	must_pass(write_file(ALTERNATE_MALFORMED_FOLDER1 "/" DOT_GIT, "Anything but not gitdir:"));
+	must_pass(gitfo_mkdir_recurs(ALTERNATE_MALFORMED_FOLDER2, mode));
+	must_pass(write_file(ALTERNATE_MALFORMED_FOLDER2 "/" DOT_GIT, "gitdir:"));
+	must_pass(gitfo_mkdir_recurs(ALTERNATE_MALFORMED_FOLDER3, mode));
+	must_pass(write_file(ALTERNATE_MALFORMED_FOLDER3 "/" DOT_GIT, "gitdir: \n\n\n"));
+	must_pass(gitfo_mkdir_recurs(ALTERNATE_NOT_FOUND_FOLDER, mode));
+	must_pass(write_file(ALTERNATE_NOT_FOUND_FOLDER "/" DOT_GIT, "gitdir: a_repository_that_surely_does_not_exist"));
+	must_fail(git_repository_discover(found_path, sizeof(found_path), ALTERNATE_MALFORMED_FOLDER1, 0, ceiling_dirs));
+	must_fail(git_repository_discover(found_path, sizeof(found_path), ALTERNATE_MALFORMED_FOLDER2, 0, ceiling_dirs));
+	must_fail(git_repository_discover(found_path, sizeof(found_path), ALTERNATE_MALFORMED_FOLDER3, 0, ceiling_dirs));
+	must_fail(git_repository_discover(found_path, sizeof(found_path), ALTERNATE_NOT_FOUND_FOLDER, 0, ceiling_dirs));
+
+	must_pass(append_ceiling_dir(ceiling_dirs, SUB_REPOSITORY_FOLDER));
+	//this must pass as ceiling_directories cannot predent the current
+	//working directory to be checked
+	must_pass(git_repository_discover(found_path, sizeof(found_path), SUB_REPOSITORY_FOLDER, 0, ceiling_dirs));
+	must_fail(error = git_repository_discover(found_path, sizeof(found_path), SUB_REPOSITORY_FOLDER_SUB, 0, ceiling_dirs));
+	must_fail(error = git_repository_discover(found_path, sizeof(found_path), SUB_REPOSITORY_FOLDER_SUB_SUB, 0, ceiling_dirs));
+	must_fail(error = git_repository_discover(found_path, sizeof(found_path), SUB_REPOSITORY_FOLDER_SUB_SUB_SUB, 0, ceiling_dirs));
+
+	//.gitfile redirection should not be affected by ceiling directories
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER_SUB, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER_SUB_SUB, ceiling_dirs, sub_repository_path));
+	must_pass(ensure_repository_discover(REPOSITORY_ALTERNATE_FOLDER_SUB_SUB_SUB, ceiling_dirs, repository_path));
+
+	rmdir_recurs(DISCOVER_FOLDER);
+END_TEST
+
 BEGIN_SUITE(repository)
 	ADD_TEST(odb0);
 	ADD_TEST(odb1);
@@ -278,5 +416,6 @@ BEGIN_SUITE(repository)
 	ADD_TEST(open1);
 	ADD_TEST(open2);
 	ADD_TEST(empty0);
+	ADD_TEST(discover0);
 END_SUITE