diff --git a/src/repository.c b/src/repository.c
index 4e0f9d491..ce313280e 100644
--- a/src/repository.c
+++ b/src/repository.c
@@ -871,13 +871,16 @@ const char *git_repository_workdir(git_repository *repo)
 
 int git_repository_set_workdir(git_repository *repo, const char *workdir)
 {
+	git_buf path = GIT_BUF_INIT;
+
 	assert(repo && workdir);
 
+	if (git_path_prettify_dir(&path, workdir, NULL) < 0)
+		return -1;
+
 	free(repo->workdir);
 
-	repo->workdir = git__strdup(workdir);
-	GITERR_CHECK_ALLOC(repo->workdir);
-
+	repo->workdir = git_buf_detach(&path);
 	repo->is_bare = 0;
 	return 0;
 }
diff --git a/tests-clar/repo/setters.c b/tests-clar/repo/setters.c
new file mode 100644
index 000000000..7a65a404b
--- /dev/null
+++ b/tests-clar/repo/setters.c
@@ -0,0 +1,34 @@
+#include "clar_libgit2.h"
+#include "buffer.h"
+
+static git_repository *repo;
+
+void test_repo_setters__initialize(void)
+{
+	cl_fixture_sandbox("testrepo.git");
+	cl_git_pass(git_repository_open(&repo, "testrepo.git"));
+}
+
+void test_repo_setters__cleanup(void)
+{
+	git_repository_free(repo);
+	cl_fixture_cleanup("testrepo.git");
+}
+
+void test_repo_setters__setting_a_workdir_turns_a_bare_repository_into_a_standard_one(void)
+{
+	cl_assert(git_repository_is_bare(repo) == 1);
+
+	cl_assert(git_repository_workdir(repo) == NULL);
+	cl_git_pass(git_repository_set_workdir(repo, "./new_workdir"));
+
+	cl_assert(git_repository_workdir(repo) != NULL);
+	cl_assert(git_repository_is_bare(repo) == 0);
+}
+
+void test_repo_setters__setting_a_workdir_prettifies_its_path(void)
+{
+	cl_git_pass(git_repository_set_workdir(repo, "./new_workdir"));
+
+	cl_assert(git__suffixcmp(git_repository_workdir(repo), "/") == 0);
+}