diff --git a/frontend/dockerfile/builder/build.go b/frontend/dockerfile/builder/build.go
index fbd4c42b0a93..84e45eff9e09 100644
--- a/frontend/dockerfile/builder/build.go
+++ b/frontend/dockerfile/builder/build.go
@@ -49,6 +49,7 @@ const (
 	keyNameContext             = "contextkey"
 	keyNameDockerfile          = "dockerfilekey"
 	keyContextSubDir           = "contextsubdir"
+	keyContextKeepGitDir       = "build-arg:BUILDKIT_CONTEXT_KEEP_GIT_DIR"
 )
 
 var httpPrefix = regexp.MustCompile(`^https?://`)
@@ -129,7 +130,7 @@ func Build(ctx context.Context, c client.Client) (*client.Result, error) {
 
 	var buildContext *llb.State
 	isScratchContext := false
-	if st, ok := detectGitContext(opts[localNameContext]); ok {
+	if st, ok := detectGitContext(opts[localNameContext], opts[keyContextKeepGitDir]); ok {
 		if !forceLocalDockerfile {
 			src = *st
 		}
@@ -451,12 +452,19 @@ func filter(opt map[string]string, key string) map[string]string {
 	return m
 }
 
-func detectGitContext(ref string) (*llb.State, bool) {
+func detectGitContext(ref, gitContext string) (*llb.State, bool) {
 	found := false
 	if httpPrefix.MatchString(ref) && gitUrlPathWithFragmentSuffix.MatchString(ref) {
 		found = true
 	}
 
+	keepGit := false
+	if gitContext != "" {
+		if v, err := strconv.ParseBool(gitContext); err == nil {
+			keepGit = v
+		}
+	}
+
 	for _, prefix := range []string{"git://", "github.com/", "git@"} {
 		if strings.HasPrefix(ref, prefix) {
 			found = true
@@ -472,7 +480,12 @@ func detectGitContext(ref string) (*llb.State, bool) {
 	if len(parts) > 1 {
 		branch = parts[1]
 	}
-	st := llb.Git(parts[0], branch, dockerfile2llb.WithInternalName("load git source "+ref))
+	gitOpts := []llb.GitOption{dockerfile2llb.WithInternalName("load git source " + ref)}
+	if keepGit {
+		gitOpts = append(gitOpts, llb.KeepGitDir())
+	}
+
+	st := llb.Git(parts[0], branch, gitOpts...)
 	return &st, true
 }
 
diff --git a/source/git/gitsource.go b/source/git/gitsource.go
index b2a3eacfe4b7..d2d6ff76179e 100644
--- a/source/git/gitsource.go
+++ b/source/git/gitsource.go
@@ -153,6 +153,14 @@ type gitSourceHandler struct {
 	cacheKey string
 }
 
+func (gs *gitSourceHandler) shaToCacheKey(sha string) string {
+	key := sha
+	if gs.src.KeepGitDir {
+		key += ".git"
+	}
+	return key
+}
+
 func (gs *gitSource) Resolve(ctx context.Context, id source.Identifier, _ *session.Manager) (source.SourceInstance, error) {
 	gitIdentifier, ok := id.(*source.GitIdentifier)
 	if !ok {
@@ -175,6 +183,7 @@ func (gs *gitSourceHandler) CacheKey(ctx context.Context, index int) (string, bo
 	defer gs.locker.Unlock(remote)
 
 	if isCommitSHA(ref) {
+		ref = gs.shaToCacheKey(ref)
 		gs.cacheKey = ref
 		return ref, true, nil
 	}
@@ -201,6 +210,7 @@ func (gs *gitSourceHandler) CacheKey(ctx context.Context, index int) (string, bo
 	if !isCommitSHA(sha) {
 		return "", false, errors.Errorf("invalid commit sha %q", sha)
 	}
+	sha = gs.shaToCacheKey(sha)
 	gs.cacheKey = sha
 	return sha, true, nil
 }
@@ -298,11 +308,15 @@ func (gs *gitSourceHandler) Snapshot(ctx context.Context) (out cache.ImmutableRe
 	}()
 
 	if gs.src.KeepGitDir {
-		_, err = gitWithinDir(ctx, checkoutDir, "", "init")
+		checkoutDirGit := filepath.Join(checkoutDir, ".git")
+		if err := os.MkdirAll(checkoutDir, 0711); err != nil {
+			return nil, err
+		}
+		_, err = gitWithinDir(ctx, checkoutDirGit, "", "init")
 		if err != nil {
 			return nil, err
 		}
-		_, err = gitWithinDir(ctx, checkoutDir, "", "remote", "add", "origin", gitDir)
+		_, err = gitWithinDir(ctx, checkoutDirGit, "", "remote", "add", "origin", gitDir)
 		if err != nil {
 			return nil, err
 		}
@@ -313,16 +327,18 @@ func (gs *gitSourceHandler) Snapshot(ctx context.Context) (out cache.ImmutableRe
 			if err != nil {
 				return nil, err
 			}
+		} else {
+			pullref += ":" + pullref
 		}
-		_, err = gitWithinDir(ctx, checkoutDir, "", "fetch", "--depth=1", "origin", pullref)
+		_, err = gitWithinDir(ctx, checkoutDirGit, "", "fetch", "-u", "--depth=1", "origin", pullref)
 		if err != nil {
 			return nil, err
 		}
-		_, err = gitWithinDir(ctx, checkoutDir, checkoutDir, "checkout", "FETCH_HEAD")
+		_, err = gitWithinDir(ctx, checkoutDirGit, checkoutDir, "checkout", "FETCH_HEAD")
 		if err != nil {
 			return nil, errors.Wrapf(err, "failed to checkout remote %s", gs.src.Remote)
 		}
-		gitDir = checkoutDir
+		gitDir = checkoutDirGit
 	} else {
 		_, err = gitWithinDir(ctx, gitDir, checkoutDir, "checkout", ref, "--", ".")
 		if err != nil {
diff --git a/source/git/gitsource_test.go b/source/git/gitsource_test.go
index 5bcaac72cd7a..f5cf1ac7bf42 100644
--- a/source/git/gitsource_test.go
+++ b/source/git/gitsource_test.go
@@ -53,7 +53,12 @@ func testRepeatedFetch(t *testing.T, keepGitDir bool) {
 	require.NoError(t, err)
 	require.True(t, done)
 
-	require.Equal(t, 40, len(key1))
+	expLen := 40
+	if keepGitDir {
+		expLen += 4
+	}
+
+	require.Equal(t, expLen, len(key1))
 
 	ref1, err := g.Snapshot(ctx)
 	require.NoError(t, err)
@@ -171,7 +176,12 @@ func testFetchBySHA(t *testing.T, keepGitDir bool) {
 	require.NoError(t, err)
 	require.True(t, done)
 
-	require.Equal(t, 40, len(key1))
+	expLen := 40
+	if keepGitDir {
+		expLen += 4
+	}
+
+	require.Equal(t, expLen, len(key1))
 
 	ref1, err := g.Snapshot(ctx)
 	require.NoError(t, err)
@@ -244,13 +254,18 @@ func testMultipleRepos(t *testing.T, keepGitDir bool) {
 	g2, err := gs.Resolve(ctx, id2, nil)
 	require.NoError(t, err)
 
+	expLen := 40
+	if keepGitDir {
+		expLen += 4
+	}
+
 	key1, _, err := g.CacheKey(ctx, 0)
 	require.NoError(t, err)
-	require.Equal(t, 40, len(key1))
+	require.Equal(t, expLen, len(key1))
 
 	key2, _, err := g2.CacheKey(ctx, 0)
 	require.NoError(t, err)
-	require.Equal(t, 40, len(key2))
+	require.Equal(t, expLen, len(key2))
 
 	require.NotEqual(t, key1, key2)