diff --git a/cache.h b/cache.h
index ca382d4622..9735b66e5e 100644
--- a/cache.h
+++ b/cache.h
@@ -396,7 +396,7 @@ extern void fill_stat_cache_info(struct cache_entry *ce, struct stat *st);
 #define REFRESH_UNMERGED	0x0002	/* allow unmerged */
 #define REFRESH_QUIET		0x0004	/* be quiet about it */
 #define REFRESH_IGNORE_MISSING	0x0008	/* ignore non-existent */
-#define REFRESH_IGNORE_SUBMODULES	0x0008	/* ignore submodules */
+#define REFRESH_IGNORE_SUBMODULES	0x0010	/* ignore submodules */
 extern int refresh_index(struct index_state *, unsigned int flags, const char **pathspec, char *seen);
 
 struct lock_file {
diff --git a/t/t2103-update-index-ignore-missing.sh b/t/t2103-update-index-ignore-missing.sh
new file mode 100755
index 0000000000..332694e7d3
--- /dev/null
+++ b/t/t2103-update-index-ignore-missing.sh
@@ -0,0 +1,89 @@
+#!/bin/sh
+
+test_description='update-index with options'
+
+. ./test-lib.sh
+
+test_expect_success basics '
+	>one &&
+	>two &&
+	>three &&
+
+	# need --add when adding
+	test_must_fail git update-index one &&
+	test -z "$(git ls-files)" &&
+	git update-index --add one &&
+	test zone = "z$(git ls-files)" &&
+
+	# update-index is atomic
+	echo 1 >one &&
+	test_must_fail git update-index one two &&
+	echo "M	one" >expect &&
+	git diff-files --name-status >actual &&
+	test_cmp expect actual &&
+
+	git update-index --add one two three &&
+	for i in one three two; do echo $i; done >expect &&
+	git ls-files >actual &&
+	test_cmp expect actual &&
+
+	test_tick &&
+	(
+		test_create_repo xyzzy &&
+		cd xyzzy &&
+		>file &&
+		git add file
+		git commit -m "sub initial"
+	) &&
+	git add xyzzy &&
+
+	test_tick &&
+	git commit -m initial &&
+	git tag initial
+'
+
+test_expect_success '--ignore-missing --refresh' '
+	git reset --hard initial &&
+	echo 2 >one &&
+	test_must_fail git update-index --refresh &&
+	echo 1 >one &&
+	git update-index --refresh &&
+	rm -f two &&
+	test_must_fail git update-index --refresh &&
+	git update-index --ignore-missing --refresh
+
+'
+
+test_expect_success '--unmerged --refresh' '
+	git reset --hard initial &&
+	info=$(git ls-files -s one | sed -e "s/ 0	/ 1	/") &&
+	git rm --cached one &&
+	echo "$info" | git update-index --index-info &&
+	test_must_fail git update-index --refresh &&
+	git update-index --unmerged --refresh &&
+	echo 2 >two &&
+	test_must_fail git update-index --unmerged --refresh >actual &&
+	grep two actual &&
+	! grep one actual &&
+	! grep three actual
+'
+
+test_expect_success '--ignore-submodules --refresh (1)' '
+	git reset --hard initial &&
+	rm -f two &&
+	test_must_fail git update-index --ignore-submodules --refresh
+'
+
+test_expect_success '--ignore-submodules --refresh (2)' '
+	git reset --hard initial &&
+	test_tick &&
+	(
+		cd xyzzy &&
+		git commit -m "sub second" --allow-empty
+	) &&
+	test_must_fail git update-index --refresh &&
+	test_must_fail git update-index --ignore-missing --refresh &&
+	git update-index --ignore-submodules --refresh
+'
+
+test_done