diff --git a/org.eclipse.jgit.test/tst/org/eclipse/jgit/lib/DirCacheCheckoutTest.java b/org.eclipse.jgit.test/tst/org/eclipse/jgit/lib/DirCacheCheckoutTest.java
index 1b4a9ff23..90a3f9416 100644
--- a/org.eclipse.jgit.test/tst/org/eclipse/jgit/lib/DirCacheCheckoutTest.java
+++ b/org.eclipse.jgit.test/tst/org/eclipse/jgit/lib/DirCacheCheckoutTest.java
@@ -128,11 +128,14 @@ public class DirCacheCheckoutTest extends ReadTreeTest {
 		RevCommit topic = git.commit().setMessage("topic-1").call();
 		assertIndex(mkmap("f", "f()\nside", "G/i", "i()"));
 
+		writeTrashFile("untracked", "untracked");
+
 		resetHard(master);
 		assertIndex(mkmap("f", "f()\nmaster", "D/g", "g()\ng2()", "E/h", "h()"));
 		resetHard(topic);
 		assertIndex(mkmap("f", "f()\nside", "G/i", "i()"));
-		assertWorkDir(mkmap("f", "f()\nside", "G/i", "i()"));
+		assertWorkDir(mkmap("f", "f()\nside", "G/i", "i()", "untracked",
+				"untracked"));
 
 		assertEquals(MergeStatus.CONFLICTING, git.merge().include(master)
 				.call().getMergeStatus());
@@ -143,7 +146,7 @@ public class DirCacheCheckoutTest extends ReadTreeTest {
 		resetHard(master);
 		assertIndex(mkmap("f", "f()\nmaster", "D/g", "g()\ng2()", "E/h", "h()"));
 		assertWorkDir(mkmap("f", "f()\nmaster", "D/g", "g()\ng2()", "E/h",
-				"h()"));
+				"h()", "untracked", "untracked"));
 	}
 
 	private DirCacheCheckout resetHard(RevCommit commit)
diff --git a/org.eclipse.jgit/src/org/eclipse/jgit/dircache/DirCacheCheckout.java b/org.eclipse.jgit/src/org/eclipse/jgit/dircache/DirCacheCheckout.java
index 9b0bc7b01..25acf16a3 100644
--- a/org.eclipse.jgit/src/org/eclipse/jgit/dircache/DirCacheCheckout.java
+++ b/org.eclipse.jgit/src/org/eclipse/jgit/dircache/DirCacheCheckout.java
@@ -351,12 +351,8 @@ public class DirCacheCheckout {
 						remove(i.getEntryPathString());
 						conflicts.remove(i.getEntryPathString());
 					} else {
-						// We are about to remove an untracked file. Check that
-						// it is ignored - otherwise that's an conflict
-						if (!f.isEntryIgnored())
-							conflicts.add(walk.getPathString());
-						else
-							remove(f.getEntryPathString());
+						// untracked file, neither contained in tree to merge
+						// nor in index
 					}
 				}
 			} else {