diff --git a/NEWS.adoc b/NEWS.adoc
index d6a78f070..15280d6fa 100644
--- a/NEWS.adoc
+++ b/NEWS.adoc
@@ -6,7 +6,7 @@ master
 
 Bug fixes:
 
- - Fix parsing of `--no-prefix` argument.
+ - Fix various issues with `diff.noprefix` and `--no-prefix`.
 
 Improvements:
 
diff --git a/src/stage.c b/src/stage.c
index 348cea362..646b08af6 100644
--- a/src/stage.c
+++ b/src/stage.c
@@ -205,6 +205,8 @@ stage_apply_chunk(struct view *view, struct line *chunk, struct line *single,
 	if (!diff_hdr)
 		return false;
 
+	if (opt_diff_noprefix)
+		apply_argv[argc++] = "-p0";
 	if (!revert)
 		apply_argv[argc++] = "--cached";
 	if (revert || stage_line_type == LINE_STAT_STAGED)