diff --git a/org.eclipse.jgit.test/tst/org/eclipse/jgit/internal/storage/dfs/InMemoryRepositoryTest.java b/org.eclipse.jgit.test/tst/org/eclipse/jgit/internal/storage/dfs/InMemoryRepositoryTest.java
new file mode 100644
index 000000000..3b26c1f5e
--- /dev/null
+++ b/org.eclipse.jgit.test/tst/org/eclipse/jgit/internal/storage/dfs/InMemoryRepositoryTest.java
@@ -0,0 +1,94 @@
+/*
+ * Copyright (C) 2019, Google LLC.
+ * and other copyright owners as documented in the project's IP log.
+ *
+ * This program and the accompanying materials are made available
+ * under the terms of the Eclipse Distribution License v1.0 which
+ * accompanies this distribution, is reproduced below, and is
+ * available at http://www.eclipse.org/org/documents/edl-v10.php
+ *
+ * All rights reserved.
+ *
+ * Redistribution and use in source and binary forms, with or
+ * without modification, are permitted provided that the following
+ * conditions are met:
+ *
+ * - Redistributions of source code must retain the above copyright
+ *   notice, this list of conditions and the following disclaimer.
+ *
+ * - Redistributions in binary form must reproduce the above
+ *   copyright notice, this list of conditions and the following
+ *   disclaimer in the documentation and/or other materials provided
+ *   with the distribution.
+ *
+ * - Neither the name of the Eclipse Foundation, Inc. nor the
+ *   names of its contributors may be used to endorse or promote
+ *   products derived from this software without specific prior
+ *   written permission.
+ *
+ * THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND
+ * CONTRIBUTORS "AS IS" AND ANY EXPRESS OR IMPLIED WARRANTIES,
+ * INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES
+ * OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
+ * ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT OWNER OR
+ * CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+ * SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT
+ * NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES;
+ * LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER
+ * CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT,
+ * STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE)
+ * ARISING IN ANY WAY OUT OF THE USE OF THIS SOFTWARE, EVEN IF
+ * ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
+ */
+package org.eclipse.jgit.internal.storage.dfs;
+
+import static org.junit.Assert.assertEquals;
+import static org.junit.Assert.assertTrue;
+
+import org.eclipse.jgit.junit.TestRepository;
+import org.eclipse.jgit.lib.ObjectIdRef;
+import org.eclipse.jgit.lib.Ref;
+import org.eclipse.jgit.lib.Ref.Storage;
+import org.eclipse.jgit.revwalk.RevCommit;
+import org.eclipse.jgit.revwalk.RevTag;
+import org.junit.Test;
+
+public class InMemoryRepositoryTest {
+
+	@Test
+	public void keepUpdateIndexPeelingTag() throws Exception {
+		InMemoryRepository repo = new InMemoryRepository(
+				new DfsRepositoryDescription());
+		try (TestRepository<InMemoryRepository> git = new TestRepository<>(
+				repo)) {
+			RevCommit commit = git.branch("master").commit()
+					.message("first commit").create();
+			RevTag tag = git.tag("v0.1", commit);
+			git.update("refs/tags/v0.1", tag);
+
+			Ref unpeeledTag = new ObjectIdRef.Unpeeled(Storage.LOOSE,
+					"refs/tags/v0.1", tag.getId(), 1000);
+
+			Ref peeledTag = repo.getRefDatabase().peel(unpeeledTag);
+			assertTrue(peeledTag instanceof ObjectIdRef.PeeledTag);
+			assertEquals(1000, peeledTag.getUpdateIndex());
+		}
+	}
+
+	@Test
+	public void keepUpdateIndexPeelingNonTag() throws Exception {
+		InMemoryRepository repo = new InMemoryRepository(
+				new DfsRepositoryDescription());
+		try (TestRepository<InMemoryRepository> git = new TestRepository<>(
+				repo)) {
+			RevCommit commit = git.branch("master").commit()
+					.message("first commit").create();
+
+			Ref unpeeledRef = new ObjectIdRef.Unpeeled(Storage.LOOSE,
+					"refs/heads/master", commit.getId(), 1000);
+			Ref peeledRef = repo.getRefDatabase().peel(unpeeledRef);
+			assertTrue(peeledRef instanceof ObjectIdRef.PeeledNonTag);
+			assertEquals(1000, peeledRef.getUpdateIndex());
+		}
+	}
+}
diff --git a/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsRefDatabase.java b/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsRefDatabase.java
index 8b2a03d4c..732cd4d1c 100644
--- a/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsRefDatabase.java
+++ b/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsRefDatabase.java
@@ -43,6 +43,7 @@
 
 package org.eclipse.jgit.internal.storage.dfs;
 
+import static org.eclipse.jgit.lib.Ref.UNDEFINED_UPDATE_INDEX;
 import static org.eclipse.jgit.lib.Ref.Storage.NEW;
 
 import java.io.IOException;
@@ -175,7 +176,7 @@ public abstract class DfsRefDatabase extends RefDatabase {
 			cachePeeledState(oldLeaf, newLeaf);
 		}
 
-		return recreate(ref, newLeaf);
+		return recreate(ref, newLeaf, hasVersioning());
 	}
 
 	Ref doPeel(Ref leaf) throws MissingObjectException,
@@ -187,20 +188,26 @@ public abstract class DfsRefDatabase extends RefDatabase {
 						leaf.getStorage(),
 						leaf.getName(),
 						leaf.getObjectId(),
-						rw.peel(obj).copy());
+						rw.peel(obj).copy(),
+						hasVersioning() ? leaf.getUpdateIndex()
+								: UNDEFINED_UPDATE_INDEX);
 			} else {
 				return new ObjectIdRef.PeeledNonTag(
 						leaf.getStorage(),
 						leaf.getName(),
-						leaf.getObjectId());
+						leaf.getObjectId(),
+						hasVersioning() ? leaf.getUpdateIndex()
+								: UNDEFINED_UPDATE_INDEX);
 			}
 		}
 	}
 
-	static Ref recreate(Ref old, Ref leaf) {
+	static Ref recreate(Ref old, Ref leaf, boolean hasVersioning) {
 		if (old.isSymbolic()) {
-			Ref dst = recreate(old.getTarget(), leaf);
-			return new SymbolicRef(old.getName(), dst);
+			Ref dst = recreate(old.getTarget(), leaf, hasVersioning);
+			return new SymbolicRef(old.getName(), dst,
+					hasVersioning ? old.getUpdateIndex()
+							: UNDEFINED_UPDATE_INDEX);
 		}
 		return leaf;
 	}
diff --git a/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsReftableDatabase.java b/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsReftableDatabase.java
index 384273dff..87983ce8c 100644
--- a/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsReftableDatabase.java
+++ b/org.eclipse.jgit/src/org/eclipse/jgit/internal/storage/dfs/DfsReftableDatabase.java
@@ -282,7 +282,7 @@ public class DfsReftableDatabase extends DfsRefDatabase {
 		if (oldLeaf.isPeeled() || oldLeaf.getObjectId() == null) {
 			return ref;
 		}
-		return recreate(ref, doPeel(oldLeaf));
+		return recreate(ref, doPeel(oldLeaf), hasVersioning());
 	}
 
 	@Override