diff --git a/merge-ort.c b/merge-ort.c
index 9e85a5e60ae69f..2b837a58c3a6f8 100644
--- a/merge-ort.c
+++ b/merge-ort.c
@@ -1502,11 +1502,44 @@ static void resolve_trivial_directory_merge(struct conflict_info *ci, int side)
 	VERIFY_CI(ci);
 	assert((side == 1 && ci->match_mask == 5) ||
 	       (side == 2 && ci->match_mask == 3));
+
+	/*
+	 * Since ci->stages[0] matches ci->stages[3-side], resolve merge in
+	 * favor of ci->stages[side].
+	 */
 	oidcpy(&ci->merged.result.oid, &ci->stages[side].oid);
 	ci->merged.result.mode = ci->stages[side].mode;
 	ci->merged.is_null = is_null_oid(&ci->stages[side].oid);
+
+	/*
+	 * Because we resolved in favor of "side", we are no longer
+	 * considering the paths which matched (i.e. had the same hash) any
+	 * more.  Strip the matching paths from both dirmask & filemask.
+	 * Another consequence of merging in favor of side is that we can no
+	 * longer have a directory/file conflict either..but there's a slight
+	 * nuance we consider before clearing it.
+	 *
+	 * In most cases, resolving in favor of the other side means there's
+	 * no conflict at all, but if we had a directory/file conflict to
+	 * start, and the directory is resolved away, the remaining file could
+	 * still be part of a rename.  If the remaining file is part of a
+	 * rename, then it may also be part of a rename conflict (e.g.
+	 * rename/delete or rename/rename(1to2)), so we can't
+	 * mark it as a clean merge if we started with a directory/file
+	 * conflict and still have a file left.
+	 *
+	 * In contrast, if we started with a directory/file conflict and
+	 * still have a directory left, no file under that directory can be
+	 * part of a rename, otherwise we would have had to recurse into the
+	 * directory and would have never ended up within
+	 * resolve_trivial_directory_merge() for that directory.
+	 */
+	ci->dirmask &= (~ci->match_mask);
+	ci->filemask &= (~ci->match_mask);
+	assert(!ci->filemask || !ci->dirmask);
 	ci->match_mask = 0;
-	ci->merged.clean = 1; /* (ci->filemask == 0); */
+	ci->merged.clean = !ci->df_conflict || ci->dirmask;
+	ci->df_conflict = 0;
 }
 
 static int handle_deferred_entries(struct merge_options *opt,
diff --git a/t/t6422-merge-rename-corner-cases.sh b/t/t6422-merge-rename-corner-cases.sh
index f14c0fb30e1bf2..e18d5a227d54f7 100755
--- a/t/t6422-merge-rename-corner-cases.sh
+++ b/t/t6422-merge-rename-corner-cases.sh
@@ -1439,4 +1439,90 @@ test_expect_success 'rename/rename(1to2) with a binary file' '
 	)
 '
 
+# Testcase preliminary submodule/directory conflict and submodule rename
+#   Commit O: <empty, or additional irrelevant stuff>
+#   Commit A1: introduce "folder" (as a tree)
+#   Commit B1: introduce "folder" (as a submodule)
+#   Commit A2: merge B1 into A1, but keep folder as a tree
+#   Commit B2: merge A1 into B1, but keep folder as a submodule
+#   Merge A2 & B2
+test_setup_submodule_directory_preliminary_conflict () {
+	git init submodule_directory_preliminary_conflict &&
+	(
+		cd submodule_directory_preliminary_conflict &&
+
+		# Trying to do the A2 and B2 merges above is slightly more
+		# challenging with a local submodule (because checking out
+		# another commit has the submodule in the way).  Instead,
+		# first create the commits with the wrong parents but right
+		# trees, in the order A1, A2, B1, B2...
+		#
+		# Then go back and create new A2 & B2 with the correct
+		# parents and the same trees.
+
+		git commit --allow-empty -m orig &&
+
+		git branch A &&
+		git branch B &&
+
+		git checkout B &&
+		mkdir folder &&
+		echo A>folder/A &&
+		echo B>folder/B &&
+		echo C>folder/C &&
+		echo D>folder/D &&
+		echo E>folder/E &&
+		git add folder &&
+		git commit -m B1 &&
+
+		git commit --allow-empty -m B2 &&
+
+		git checkout A &&
+		git init folder &&
+		(
+			cd folder &&
+			>Z &&
+			>Y &&
+			git add Z Y &&
+			git commit -m "original submodule commit"
+		) &&
+		git add folder &&
+		git commit -m A1 &&
+
+		git commit --allow-empty -m A2 &&
+
+		NewA2=$(git commit-tree -p A^ -p B^ -m "Merge B into A" A^{tree}) &&
+		NewB2=$(git commit-tree -p B^ -p A^ -m "Merge A into B" B^{tree}) &&
+		git update-ref refs/heads/A $NewA2 &&
+		git update-ref refs/heads/B $NewB2
+	)
+}
+
+test_expect_success 'submodule/directory preliminary conflict' '
+	test_setup_submodule_directory_preliminary_conflict &&
+	(
+		cd submodule_directory_preliminary_conflict &&
+
+		git checkout A^0 &&
+
+		test_expect_code 1 git merge B^0 &&
+
+		# Make sure the index has the right number of entries
+		git ls-files -s >actual &&
+		test_line_count = 2 actual &&
+
+		# The "folder" as directory should have been resolved away
+		# as part of the merge.  The "folder" as submodule got
+		# renamed to "folder~Temporary merge branch 2" in the
+		# virtual merge base, resulting in a
+		#    "folder~Temporary merge branch 2" -> "folder"
+		# rename in the outermerge for the submodule, which then
+		# becomes part of a rename/delete conflict (because "folder"
+		# as a submodule was deleted in A2).
+		submod=$(git rev-parse A:folder) &&
+		printf "160000 $submod 1\tfolder\n160000 $submod 2\tfolder\n" >expect &&
+		test_cmp expect actual
+	)
+'
+
 test_done