diff --git a/src/repository.c b/src/repository.c
index 413bb17ae..41a176a81 100644
--- a/src/repository.c
+++ b/src/repository.c
@@ -592,6 +592,7 @@ void git_repository_set_index(git_repository *repo, git_index *index)
 
 	repo->_index = index;
 	GIT_REFCOUNT_OWN(repo->_index, repo);
+	GIT_REFCOUNT_INC(index);
 }
 
 static int check_repositoryformatversion(git_repository *repo)
diff --git a/tests-clar/repo/setters.c b/tests-clar/repo/setters.c
index 721eaaf2b..0c3b28d33 100644
--- a/tests-clar/repo/setters.c
+++ b/tests-clar/repo/setters.c
@@ -1,6 +1,7 @@
 #include "clar_libgit2.h"
 #include "buffer.h"
 #include "posix.h"
+#include "util.h"
 
 static git_repository *repo;
 
@@ -35,3 +36,24 @@ void test_repo_setters__setting_a_workdir_prettifies_its_path(void)
 
 	cl_assert(git__suffixcmp(git_repository_workdir(repo), "/") == 0);
 }
+
+void test_repo_setters__setting_a_new_index_on_a_repo_which_has_already_loaded_one_properly_honors_the_refcount(void)
+{
+	git_index *new_index;
+
+	cl_git_pass(git_index_open(&new_index, "./my-index"));
+	cl_assert(((git_refcount *)new_index)->refcount == 1);
+
+	git_repository_set_index(repo, new_index);
+	cl_assert(((git_refcount *)new_index)->refcount == 2);
+
+	git_repository_free(repo);
+	cl_assert(((git_refcount *)new_index)->refcount == 1);
+
+	git_index_free(new_index);
+
+	/* 
+	 * Ensure the cleanup method won't try to free the repo as it's already been taken care of
+	 */
+	repo = NULL;
+}