diff --git a/submodule-config.c b/submodule-config.c
index 66653e86b9..4264ee216f 100644
--- a/submodule-config.c
+++ b/submodule-config.c
@@ -625,23 +625,16 @@ static void config_from_gitmodules(config_fn_t fn, struct repository *repo, void
 		const struct config_options opts = { 0 };
 		struct object_id oid;
 		char *file;
+		char *oidstr = NULL;
 
 		file = repo_worktree_path(repo, GITMODULES_FILE);
 		if (file_exists(file)) {
 			config_source.file = file;
-		} else if (repo->submodule_prefix) {
-			/*
-			 * When get_oid and config_with_options, used below,
-			 * become able to work on a specific repository, this
-			 * warning branch can be removed.
-			 */
-			warning("nested submodules without %s in the working tree are not supported yet",
-				GITMODULES_FILE);
-			goto out;
-		} else if (get_oid(GITMODULES_INDEX, &oid) >= 0) {
-			config_source.blob = GITMODULES_INDEX;
-		} else if (get_oid(GITMODULES_HEAD, &oid) >= 0) {
-			config_source.blob = GITMODULES_HEAD;
+		} else if (repo_get_oid(repo, GITMODULES_INDEX, &oid) >= 0 ||
+			   repo_get_oid(repo, GITMODULES_HEAD, &oid) >= 0) {
+			config_source.blob = oidstr = xstrdup(oid_to_hex(&oid));
+			if (repo != the_repository)
+				add_to_alternates_memory(repo->objects->odb->path);
 		} else {
 			goto out;
 		}
@@ -649,6 +642,7 @@ static void config_from_gitmodules(config_fn_t fn, struct repository *repo, void
 		config_with_options(fn, data, &config_source, &opts);
 
 out:
+		free(oidstr);
 		free(file);
 	}
 }
diff --git a/t/t7814-grep-recurse-submodules.sh b/t/t7814-grep-recurse-submodules.sh
index fa475d52fa..134a694516 100755
--- a/t/t7814-grep-recurse-submodules.sh
+++ b/t/t7814-grep-recurse-submodules.sh
@@ -380,11 +380,7 @@ test_expect_success 'grep --recurse-submodules should pass the pattern type alon
 	fi
 '
 
-# Recursing down into nested submodules which do not have .gitmodules in their
-# working tree does not work yet. This is because config_from_gitmodules()
-# uses get_oid() and the latter is still not able to get objects from an
-# arbitrary repository (the nested submodule, in this case).
-test_expect_failure 'grep --recurse-submodules with submodules without .gitmodules in the working tree' '
+test_expect_success 'grep --recurse-submodules with submodules without .gitmodules in the working tree' '
 	test_when_finished "git -C submodule checkout .gitmodules" &&
 	rm submodule/.gitmodules &&
 	git grep --recurse-submodules -e "(.|.)[\d]" >actual &&