diff --git a/tests/flakes-with-submodules.sh b/tests/flakes-with-submodules.sh
new file mode 100644
index 00000000000..ee8f5e69471
--- /dev/null
+++ b/tests/flakes-with-submodules.sh
@@ -0,0 +1,120 @@
+source common.sh
+
+if [[ -z $(type -p git) ]]; then
+    echo "Git not installed; skipping flake tests"
+    exit 99
+fi
+
+clearStore
+rm -rf $TEST_HOME/.cache $TEST_HOME/.config
+
+registry=$TEST_ROOT/registry.json
+
+nonFlakeDir=$TEST_ROOT/nonFlake
+flakeDir=$TEST_ROOT/flake
+flakeWithSubmodules=$TEST_ROOT/flakeWithSubmodules
+
+for repo in $flakeDir $nonFlakeDir $flakeWithSubmodules; do
+    rm -rf $repo $repo.tmp
+    mkdir -p $repo
+    git -C $repo init
+    git -C $repo config user.email "foobar@example.com"
+    git -C $repo config user.name "Foobar"
+done
+
+for dir in $nonFlakeDir $flakeDir; do
+cat > $dir/README.md <<EOF
+FNORD
+EOF
+git -C $dir add README.md
+git -C $dir commit -m 'Initial'
+done
+
+cat > $flakeDir/flake.nix <<EOF
+{
+    description = "Flake whose defaultPackage prints out its README.md";
+
+    outputs = { self }: let
+        inherit (self.modules) nonFlake;
+        writeShellScriptBin = name: script: derivation {
+            inherit name;
+            system = "$system";
+            builder = "/bin/sh";
+            args = [
+                (builtins.toFile "\${name}-builder.sh" ''
+                    /bin/mkdir -p \$out/bin
+                    bin=\$_/\${name}
+                    echo '#!/bin/sh' > \$bin
+                    echo '\${script}' >> \$bin
+                    /bin/chmod +x \$bin
+                '')
+            ];
+        };
+    in {
+        packages.$system = {
+            cat-own-readme = writeShellScriptBin "cat-own-readme" ''
+                cat \${self}/README.md
+            '';
+        };
+
+        defaultPackage.$system = self.packages.$system.cat-own-readme;
+    };
+}
+EOF
+
+git -C $flakeDir add .
+git -C $flakeDir commit -m'add flake.nix'
+
+[[ $(nix run $flakeDir#cat-own-readme) == "FNORD" ]]
+
+git -C $flakeWithSubmodules submodule add $nonFlakeDir
+git -C $flakeWithSubmodules submodule add $flakeDir
+git -C $flakeWithSubmodules add .
+git -C $flakeWithSubmodules commit -m'add submodules'
+
+cat > $flakeWithSubmodules/flake.nix <<EOF
+{
+    description = "Flake with Submodules";
+
+    outputs = { self }: let
+        traceVal = val: builtins.trace val val;
+        nonFlake = builtins.fetchTree (traceVal self.modules.nonFlake);
+        flake = builtins.getFlake (traceVal self.modules.flake);
+        writeShellScriptBin = name: script: derivation {
+            inherit name;
+            system = "$system";
+            builder = "/bin/sh";
+            args = [
+                (builtins.toFile "\${name}-builder.sh" ''
+                    /bin/mkdir -p \$out/bin
+                    bin=\$_/\${name}
+                    echo '#!/bin/sh' > \$bin
+                    echo '\${script}' >> \$bin
+                    /bin/chmod +x \$bin
+                '')
+            ];
+        };
+    in {
+        packages.$system = {
+            cat-submodule-readme = writeShellScriptBin "cat-submodule-readme" ''
+                cat \${nonFlake}/README.md
+            '';
+            use-submodule-as-flake = flake.packages.$system.cat-own-readme;
+        };
+
+        defaultPackage.$system = self.packages.$system.cat-submodule-readme;
+    };
+}
+EOF
+
+git -C $flakeWithSubmodules add .
+git -C $flakeWithSubmodules commit -m'add flake.nix'
+
+[[ $(nix run $flakeWithSubmodules#cat-submodule-readme) == "FNORD" ]]
+[[ $(nix run $flakeWithSubmodules#use-submodule-as-flake) == "FNORD" ]]
+
+# TODO make the dirty case do the Right Thing as well.
+#echo FSOUTH > $flakeWithSubmodules/nonFlake/README.md
+#[[ $(nix run $flakeWithSubmodules#cat-submodule-readme) == "FSOUTH" ]]
+# [[ $(nix run $flakeWithSubmodules#use-submodule-as-flake) == "FSOUTH" ]]
+# nix run -vv $flakeWithSubmodules#cat-submodule-readme
diff --git a/tests/local.mk b/tests/local.mk
index 8d454ee1962..54f38a27390 100644
--- a/tests/local.mk
+++ b/tests/local.mk
@@ -46,6 +46,7 @@ nix_tests = \
   recursive.sh \
   describe-stores.sh \
   flakes.sh \
+  flakes-with-submodules.sh \
   build.sh \
   compute-levels.sh \
   repl.sh \