diff --git a/git-submodule.sh b/git-submodule.sh
index 43c68deee9..b3f248c3fe 100755
--- a/git-submodule.sh
+++ b/git-submodule.sh
@@ -413,8 +413,8 @@ cmd_foreach()
 		die_if_unmatched "$mode"
 		if test -e "$sm_path"/.git
 		then
-			displaypath=$(relative_path "$sm_path")
-			say "$(eval_gettext "Entering '\$prefix\$displaypath'")"
+			displaypath=$(relative_path "$prefix$sm_path")
+			say "$(eval_gettext "Entering '\$displaypath'")"
 			name=$(git submodule--helper name "$sm_path")
 			(
 				prefix="$prefix$sm_path/"
@@ -434,7 +434,7 @@ cmd_foreach()
 					cmd_foreach "--recursive" "$@"
 				fi
 			) <&3 3<&- ||
-			die "$(eval_gettext "Stopping at '\$prefix\$displaypath'; script returned non-zero status.")"
+			die "$(eval_gettext "Stopping at '\$displaypath'; script returned non-zero status.")"
 		fi
 	done
 }
diff --git a/t/t7407-submodule-foreach.sh b/t/t7407-submodule-foreach.sh
index 7ca10b8606..776b349508 100755
--- a/t/t7407-submodule-foreach.sh
+++ b/t/t7407-submodule-foreach.sh
@@ -177,6 +177,26 @@ test_expect_success 'test messages from "foreach --recursive"' '
 	test_i18ncmp expect actual
 '
 
+cat > expect <<EOF
+Entering '../nested1'
+Entering '../nested1/nested2'
+Entering '../nested1/nested2/nested3'
+Entering '../nested1/nested2/nested3/submodule'
+Entering '../sub1'
+Entering '../sub2'
+Entering '../sub3'
+EOF
+
+test_expect_success 'test messages from "foreach --recursive" from subdirectory' '
+	(
+		cd clone2 &&
+		mkdir untracked &&
+		cd untracked &&
+		git submodule foreach --recursive >../../actual
+	) &&
+	test_i18ncmp expect actual
+'
+
 cat > expect <<EOF
 nested1-nested1
 nested2-nested2