diff --git a/builtin/bundle.c b/builtin/bundle.c
index d5d41a8f67..86d0ed7049 100644
--- a/builtin/bundle.c
+++ b/builtin/bundle.c
@@ -207,12 +207,13 @@ static int cmd_bundle_unbundle(int argc, const char **argv, const char *prefix)
 			builtin_bundle_unbundle_usage, options, &bundle_file);
 	/* bundle internals use argv[1] as further parameters */
 
+	if (!startup_info->have_repository)
+		die(_("Need a repository to unbundle."));
+
 	if ((bundle_fd = open_bundle(bundle_file, &header, NULL)) < 0) {
 		ret = 1;
 		goto cleanup;
 	}
-	if (!startup_info->have_repository)
-		die(_("Need a repository to unbundle."));
 	if (progress)
 		strvec_pushl(&extra_index_pack_args, "-v", "--progress-title",
 			     _("Unbundling objects"), NULL);
diff --git a/bundle.c b/bundle.c
index ce164c37bc..b0a8a925cb 100644
--- a/bundle.c
+++ b/bundle.c
@@ -89,7 +89,12 @@ int read_bundle_header_fd(int fd, struct bundle_header *header,
 		goto abort;
 	}
 
-	header->hash_algo = the_hash_algo;
+	/*
+	 * The default hash format for bundles is SHA1, unless told otherwise
+	 * by an "object-format=" capability, which is being handled in
+	 * `parse_capability()`.
+	 */
+	header->hash_algo = &hash_algos[GIT_HASH_SHA1];
 
 	/* The bundle header ends with an empty line */
 	while (!strbuf_getwholeline_fd(&buf, fd, '\n') &&
diff --git a/t/t6020-bundle-misc.sh b/t/t6020-bundle-misc.sh
index fe75a06572..34b5cd62c2 100755
--- a/t/t6020-bundle-misc.sh
+++ b/t/t6020-bundle-misc.sh
@@ -652,4 +652,36 @@ test_expect_success 'send a bundle to standard output' '
 	test_cmp expect actual
 '
 
+test_expect_success 'unbundle outside of a repository' '
+	git bundle create some.bundle HEAD &&
+	echo "fatal: Need a repository to unbundle." >expect &&
+	nongit test_must_fail git bundle unbundle "$(pwd)/some.bundle" 2>err &&
+	test_cmp expect err
+'
+
+test_expect_success 'list-heads outside of a repository' '
+	git bundle create some.bundle HEAD &&
+	cat >expect <<-EOF &&
+	$(git rev-parse HEAD) HEAD
+	EOF
+	nongit git bundle list-heads "$(pwd)/some.bundle" >actual &&
+	test_cmp expect actual
+'
+
+for hash in sha1 sha256
+do
+	test_expect_success "list-heads with bundle using $hash" '
+		test_when_finished "rm -rf hash" &&
+		git init --object-format=$hash hash &&
+		test_commit -C hash initial &&
+		git -C hash bundle create hash.bundle HEAD &&
+
+		cat >expect <<-EOF &&
+		$(git -C hash rev-parse HEAD) HEAD
+		EOF
+		git bundle list-heads hash/hash.bundle >actual &&
+		test_cmp expect actual
+	'
+done
+
 test_done