diff --git a/builtin/add.c b/builtin/add.c
index 09e684585d..17528e8f92 100644
--- a/builtin/add.c
+++ b/builtin/add.c
@@ -144,8 +144,6 @@ static int renormalize_tracked_files(const struct pathspec *pathspec, int flags)
 {
 	int i, retval = 0;
 
-	/* TODO: audit for interaction with sparse-index. */
-	ensure_full_index(&the_index);
 	for (i = 0; i < active_nr; i++) {
 		struct cache_entry *ce = active_cache[i];
 
@@ -192,13 +190,21 @@ static int refresh(int verbose, const struct pathspec *pathspec)
 	struct string_list only_match_skip_worktree = STRING_LIST_INIT_NODUP;
 	int flags = REFRESH_IGNORE_SKIP_WORKTREE |
 		    (verbose ? REFRESH_IN_PORCELAIN : REFRESH_QUIET);
+	struct pattern_list pl = { 0 };
+	int sparse_checkout_enabled = !get_sparse_checkout_patterns(&pl);
 
 	seen = xcalloc(pathspec->nr, 1);
 	refresh_index(&the_index, flags, pathspec, seen,
 		      _("Unstaged changes after refreshing the index:"));
 	for (i = 0; i < pathspec->nr; i++) {
 		if (!seen[i]) {
-			if (matches_skip_worktree(pathspec, i, &skip_worktree_seen)) {
+			const char *path = pathspec->items[i].original;
+			int dtype = DT_REG;
+
+			if (matches_skip_worktree(pathspec, i, &skip_worktree_seen) ||
+			    (sparse_checkout_enabled &&
+			     !path_matches_pattern_list(path, strlen(path), NULL,
+							&dtype, &pl, &the_index))) {
 				string_list_append(&only_match_skip_worktree,
 						   pathspec->items[i].original);
 			} else {
@@ -528,6 +534,9 @@ int cmd_add(int argc, const char **argv, const char *prefix)
 	add_new_files = !take_worktree_changes && !refresh_only && !add_renormalize;
 	require_pathspec = !(take_worktree_changes || (0 < addremove_explicit));
 
+	prepare_repo_settings(the_repository);
+	the_repository->settings.command_requires_full_index = 0;
+
 	hold_locked_index(&lock_file, LOCK_DIE_ON_ERROR);
 
 	/*
diff --git a/pathspec.c b/pathspec.c
index 08f8d3eedc..44306fdaca 100644
--- a/pathspec.c
+++ b/pathspec.c
@@ -37,8 +37,6 @@ void add_pathspec_matches_against_index(const struct pathspec *pathspec,
 			num_unmatched++;
 	if (!num_unmatched)
 		return;
-	/* TODO: audit for interaction with sparse-index. */
-	ensure_full_index(istate);
 	for (i = 0; i < istate->cache_nr; i++) {
 		const struct cache_entry *ce = istate->cache[i];
 		if (sw_action == PS_IGNORE_SKIP_WORKTREE && ce_skip_worktree(ce))
diff --git a/t/t1092-sparse-checkout-compatibility.sh b/t/t1092-sparse-checkout-compatibility.sh
index 91e30d6ec2..ddc86bb415 100755
--- a/t/t1092-sparse-checkout-compatibility.sh
+++ b/t/t1092-sparse-checkout-compatibility.sh
@@ -114,6 +114,16 @@ test_expect_success 'setup' '
 		git add . &&
 		git commit -m "file to dir" &&
 
+		for side in left right
+		do
+			git checkout -b merge-$side base &&
+			echo $side >>deep/deeper2/a &&
+			echo $side >>folder1/a &&
+			echo $side >>folder2/a &&
+			git add . &&
+			git commit -m "$side" || return 1
+		done &&
+
 		git checkout -b deepest base &&
 		echo "updated deepest" >deep/deeper1/deepest/a &&
 		git commit -a -m "update deepest" &&
@@ -312,9 +322,6 @@ test_expect_success 'commit including unstaged changes' '
 test_expect_success 'status/add: outside sparse cone' '
 	init_repos &&
 
-	# adding a "missing" file outside the cone should fail
-	test_sparse_match test_must_fail git add folder1/a &&
-
 	# folder1 is at HEAD, but outside the sparse cone
 	run_on_sparse mkdir folder1 &&
 	cp initial-repo/folder1/a sparse-checkout/folder1/a &&
@@ -330,21 +337,23 @@ test_expect_success 'status/add: outside sparse cone' '
 
 	test_sparse_match git status --porcelain=v2 &&
 
-	# This "git add folder1/a" fails with a warning
-	# in the sparse repos, differing from the full
-	# repo. This is intentional.
+	# Adding the path outside of the sparse-checkout cone should fail.
 	test_sparse_match test_must_fail git add folder1/a &&
 	test_sparse_match test_must_fail git add --refresh folder1/a &&
-	test_all_match git status --porcelain=v2 &&
+
+	# NEEDSWORK: Adding a newly-tracked file outside the cone succeeds
+	test_sparse_match git add folder1/new &&
 
 	test_all_match git add . &&
 	test_all_match git status --porcelain=v2 &&
 	test_all_match git commit -m folder1/new &&
+	test_all_match git rev-parse HEAD^{tree} &&
 
 	run_on_all ../edit-contents folder1/newer &&
 	test_all_match git add folder1/ &&
 	test_all_match git status --porcelain=v2 &&
-	test_all_match git commit -m folder1/newer
+	test_all_match git commit -m folder1/newer &&
+	test_all_match git rev-parse HEAD^{tree}
 '
 
 test_expect_success 'checkout and reset --hard' '
@@ -482,6 +491,39 @@ test_expect_success 'merge' '
 	test_all_match git rev-parse HEAD^{tree}
 '
 
+# NEEDSWORK: This test is documenting current behavior, but that
+# behavior can be confusing to users so there is desire to change it.
+# Right now, users might be using this flow to work through conflicts,
+# so any solution should present advice to users who try this sequence
+# of commands to follow whatever new method we create.
+test_expect_success 'merge with conflict outside cone' '
+	init_repos &&
+
+	test_all_match git checkout -b merge-tip merge-left &&
+	test_all_match git status --porcelain=v2 &&
+	test_all_match test_must_fail git merge -m merge merge-right &&
+	test_all_match git status --porcelain=v2 &&
+
+	# Resolve the conflict in different ways:
+	# 1. Revert to the base
+	test_all_match git checkout base -- deep/deeper2/a &&
+	test_all_match git status --porcelain=v2 &&
+
+	# 2. Add the file with conflict markers
+	test_all_match git add folder1/a &&
+	test_all_match git status --porcelain=v2 &&
+
+	# 3. Rename the file to another sparse filename and
+	#    accept conflict markers as resolved content.
+	run_on_all mv folder2/a folder2/z &&
+	test_all_match git add folder2 &&
+	test_all_match git status --porcelain=v2 &&
+
+	test_all_match git merge --continue &&
+	test_all_match git status --porcelain=v2 &&
+	test_all_match git rev-parse HEAD^{tree}
+'
+
 test_expect_success 'merge with outside renames' '
 	init_repos &&
 
@@ -598,7 +640,14 @@ test_expect_success 'sparse-index is not expanded' '
 	git -C sparse-index reset --hard &&
 	ensure_not_expanded checkout rename-out-to-out -- deep/deeper1 &&
 	git -C sparse-index reset --hard &&
-	ensure_not_expanded restore -s rename-out-to-out -- deep/deeper1
+	ensure_not_expanded restore -s rename-out-to-out -- deep/deeper1 &&
+
+	echo >>sparse-index/README.md &&
+	ensure_not_expanded add -A &&
+	echo >>sparse-index/extra.txt &&
+	ensure_not_expanded add extra.txt &&
+	echo >>sparse-index/untracked.txt &&
+	ensure_not_expanded add .
 '
 
 # NEEDSWORK: a sparse-checkout behaves differently from a full checkout