diff --git a/diff.c b/diff.c
index 37f99209a0..4f980aded6 100644
--- a/diff.c
+++ b/diff.c
@@ -1759,7 +1759,8 @@ static int reuse_worktree_file(const char *name, const unsigned char *sha1, int
 	struct stat st;
 	int pos, len;
 
-	/* We do not read the cache ourselves here, because the
+	/*
+	 * We do not read the cache ourselves here, because the
 	 * benchmark with my previous version that always reads cache
 	 * shows that it makes things worse for diff-tree comparing
 	 * two linux-2.6 kernel trees in an already checked out work
@@ -1799,6 +1800,13 @@ static int reuse_worktree_file(const char *name, const unsigned char *sha1, int
 	if (hashcmp(sha1, ce->sha1) || !S_ISREG(ce->ce_mode))
 		return 0;
 
+	/*
+	 * If ce is marked as "assume unchanged", there is no
+	 * guarantee that work tree matches what we are looking for.
+	 */
+	if (ce->ce_flags & CE_VALID)
+		return 0;
+
 	/*
 	 * If ce matches the file in the work tree, we can reuse it.
 	 */
diff --git a/t/t4020-diff-external.sh b/t/t4020-diff-external.sh
index f8c99f1a98..0720001281 100755
--- a/t/t4020-diff-external.sh
+++ b/t/t4020-diff-external.sh
@@ -152,4 +152,12 @@ test_expect_success 'external diff with autocrlf = true' '
 	test $(wc -l < crlfed.txt) = $(cat crlfed.txt | keep_only_cr | wc -c)
 '
 
+test_expect_success 'diff --cached' '
+	git add file &&
+	git update-index --assume-unchanged file &&
+	echo second >file &&
+	git diff --cached >actual &&
+	test_cmp ../t4020/diff.NUL actual
+'
+
 test_done