diff --git a/src/cargo/sources/git/utils.rs b/src/cargo/sources/git/utils.rs
index 66301c1da1b..4722dc2ce97 100644
--- a/src/cargo/sources/git/utils.rs
+++ b/src/cargo/sources/git/utils.rs
@@ -146,7 +146,7 @@ impl GitRemote {
             paths::remove_dir_all(dst)?;
         }
         fs::create_dir_all(dst)?;
-        let mut repo = git2::Repository::init_bare(dst)?;
+        let mut repo = init(dst, true)?;
         fetch(
             &mut repo,
             &self.url,
@@ -385,7 +385,7 @@ impl<'a> GitCheckout<'a> {
                 Err(..) => {
                     let path = parent.workdir().unwrap().join(child.path());
                     let _ = paths::remove_dir_all(&path);
-                    git2::Repository::init(&path)?
+                    init(&path, false)?
                 }
             };
 
@@ -833,7 +833,7 @@ fn reinitialize(repo: &mut git2::Repository) -> CargoResult<()> {
     debug!("reinitializing git repo at {:?}", path);
     let tmp = path.join("tmp");
     let bare = !repo.path().ends_with(".git");
-    *repo = git2::Repository::init(&tmp)?;
+    *repo = init(&tmp, false)?;
     for entry in path.read_dir()? {
         let entry = entry?;
         if entry.file_name().to_str() == Some("tmp") {
@@ -842,15 +842,21 @@ fn reinitialize(repo: &mut git2::Repository) -> CargoResult<()> {
         let path = entry.path();
         drop(paths::remove_file(&path).or_else(|_| paths::remove_dir_all(&path)));
     }
-    if bare {
-        *repo = git2::Repository::init_bare(path)?;
-    } else {
-        *repo = git2::Repository::init(path)?;
-    }
+    *repo = init(&path, bare)?;
     paths::remove_dir_all(&tmp)?;
     Ok(())
 }
 
+fn init(path: &Path, bare: bool) -> CargoResult<git2::Repository> {
+    let mut opts = git2::RepositoryInitOptions::new();
+    // Skip anyting related to templates, they just call all sorts of issues as
+    // we really don't want to use them yet they insist on being used. See #6240
+    // for an example issue that comes up.
+    opts.external_template(false);
+    opts.bare(bare);
+    Ok(git2::Repository::init_opts(&path, &opts)?)
+}
+
 /// Updating the index is done pretty regularly so we want it to be as fast as
 /// possible. For registries hosted on GitHub (like the crates.io index) there's
 /// a fast path available to use [1] to tell us that there's no updates to be
diff --git a/tests/testsuite/git.rs b/tests/testsuite/git.rs
index 2e4d4633903..ea89a964bdc 100644
--- a/tests/testsuite/git.rs
+++ b/tests/testsuite/git.rs
@@ -2625,3 +2625,48 @@ fn use_the_cli() {
 
     project.cargo("build -v").with_stderr(stderr).run();
 }
+
+#[test]
+fn templatedir_doesnt_cause_problems() {
+    let git_project2 = git::new("dep2", |project| {
+        project
+            .file("Cargo.toml", &basic_manifest("dep2", "0.5.0"))
+            .file("src/lib.rs", "")
+    }).unwrap();
+    let git_project = git::new("dep1", |project| {
+        project
+            .file("Cargo.toml", &basic_manifest("dep1", "0.5.0"))
+            .file("src/lib.rs", "")
+    }).unwrap();
+    let p = project()
+        .file(
+            "Cargo.toml",
+            &format!(r#"
+                [project]
+                name = "fo"
+                version = "0.5.0"
+                authors = []
+
+                [dependencies]
+                dep1 = {{ git = '{}' }}
+            "#, git_project.url()),
+        ).file("src/main.rs", "fn main() {}")
+        .build();
+
+    File::create(paths::home().join(".gitconfig"))
+        .unwrap()
+        .write_all(
+            &format!(r#"
+                [init]
+                templatedir = {}
+            "#, git_project2.url()
+                .to_file_path()
+                .unwrap()
+                .to_str()
+                .unwrap()
+                .replace("\\", "/")
+            ).as_bytes(),
+        ).unwrap();
+
+    p.cargo("build").run();
+}