diff --git a/builtin/hash-object.c b/builtin/hash-object.c
index 82ca6d2bfd..c767414a0c 100644
--- a/builtin/hash-object.c
+++ b/builtin/hash-object.c
@@ -123,6 +123,9 @@ int cmd_hash_object(int argc, const char **argv, const char *prefix)
 	else
 		prefix = setup_git_directory_gently(&nongit);
 
+	if (nongit && !the_hash_algo)
+		repo_set_hash_algo(the_repository, GIT_HASH_SHA1);
+
 	if (vpath && prefix) {
 		vpath_free = prefix_filename(prefix, vpath);
 		vpath = vpath_free;
diff --git a/t/t1007-hash-object.sh b/t/t1007-hash-object.sh
index 64aea38486..d73a5cc237 100755
--- a/t/t1007-hash-object.sh
+++ b/t/t1007-hash-object.sh
@@ -260,4 +260,10 @@ test_expect_success '--literally with extra-long type' '
 	echo example | git hash-object -t $t --literally --stdin
 '
 
+test_expect_success '--stdin outside of repository (uses SHA-1)' '
+	nongit git hash-object --stdin <hello >actual &&
+	echo "$(test_oid --hash=sha1 hello)" >expect &&
+	test_cmp expect actual
+'
+
 test_done
diff --git a/t/t1517-outside-repo.sh b/t/t1517-outside-repo.sh
index 278ef57b3a..2d8982d61a 100755
--- a/t/t1517-outside-repo.sh
+++ b/t/t1517-outside-repo.sh
@@ -29,7 +29,7 @@ test_expect_success 'compute a patch-id outside repository (uses SHA-1)' '
 	test_cmp patch-id.expect patch-id.actual
 '
 
-test_expect_failure 'hash-object outside repository (uses SHA-1)' '
+test_expect_success 'hash-object outside repository (uses SHA-1)' '
 	nongit env GIT_DEFAULT_HASH=sha1 \
 		git hash-object --stdin <sample.patch >hash.expect &&
 	nongit \