diff --git a/src/refdb.c b/src/refdb.c
index 6d0c536de..25aa8ac04 100644
--- a/src/refdb.c
+++ b/src/refdb.c
@@ -195,8 +195,13 @@ add_to_refs(const char *id, size_t idlen, char *name, size_t namelen, struct ref
 			type = REFERENCE_LOCAL_TAG;
 		}
 
-		namelen -= STRING_SIZE("refs/tags/");
-		name	+= STRING_SIZE("refs/tags/");
+		/* Don't remove the prefix if there is already a branch
+		 * with the same name. */
+		ref = string_map_get(&refs_by_name, name + STRING_SIZE("refs/tags/"));
+		if (ref == NULL || ref_is_tag(ref)) {
+			namelen -= STRING_SIZE("refs/tags/");
+			name	+= STRING_SIZE("refs/tags/");
+		}
 
 	} else if (!prefixcmp(name, "refs/remotes/")) {
 		type = REFERENCE_REMOTE;
diff --git a/test/refs/branch-tag-test b/test/refs/branch-tag-test
new file mode 100755
index 000000000..cebc18207
--- /dev/null
+++ b/test/refs/branch-tag-test
@@ -0,0 +1,35 @@
+#!/bin/sh
+
+. libtest.sh
+. libgit.sh
+
+export LINES=18
+
+steps '
+	:save-display refs-initial.screen
+'
+
+in_work_dir create_repo_from_tgz "$base_dir/files/refs-repo.tgz"
+in_work_dir git branch v2.0 v2.0.1
+
+test_tig refs
+
+assert_equals 'refs-initial.screen' <<EOF
+                                     All references
+2010-04-07 05:37 +0000 Max Power     master               Commit 10 E
+2009-02-13 23:31 +0000 Max Power     mp/feature           WIP: feature
+2009-12-26 01:11 +0000 作者          r1.1.2               Commit 8 C
+2009-12-26 01:11 +0000 作者          r1.1.x               Commit 8 C
+2009-12-17 12:49 +0000 René Lévesque r1.0                 Commit 8 B
+2010-03-12 16:31 +0000 René Lévesque v2.0                 Commit 10 B
+2010-04-07 05:37 +0000 Max Power     origin/master        Commit 10 E
+2010-04-07 05:37 +0000 Max Power     max-power/master     Commit 10 E
+2009-02-13 23:31 +0000 Max Power     max-power/mp/feature WIP: feature
+2009-11-30 12:05 +0000 Max Power     max-power/mp/gh-123  Commit 7 E
+2010-04-07 05:37 +0000 Max Power     origin/HEAD          Commit 10 E
+2010-01-12 01:56 +0000 Max Power     mp/good              Commit 8 E
+2010-03-04 04:09 +0000 A. U. Thor    refs/tags/v2.0       Commit 10 A
+2010-03-12 16:31 +0000 René Lévesque v2.0.1               Commit 10 B
+2010-01-20 14:18 +0000 A. U. Thor    v1.1.1               Commit 9 A
+[refs] All references                                                        88%
+EOF