diff --git a/.gitignore b/.gitignore
index 6722f78f9a..5555ae025b 100644
--- a/.gitignore
+++ b/.gitignore
@@ -76,6 +76,7 @@
 /git-init-db
 /git-interpret-trailers
 /git-instaweb
+/git-legacy-difftool
 /git-log
 /git-ls-files
 /git-ls-remote
diff --git a/Makefile b/Makefile
index 71a4273f1d..4137a9915b 100644
--- a/Makefile
+++ b/Makefile
@@ -527,6 +527,7 @@ SCRIPT_LIB += git-sh-setup
 SCRIPT_LIB += git-sh-i18n
 
 SCRIPT_PERL += git-add--interactive.perl
+SCRIPT_PERL += git-legacy-difftool.perl
 SCRIPT_PERL += git-archimport.perl
 SCRIPT_PERL += git-cvsexportcommit.perl
 SCRIPT_PERL += git-cvsimport.perl
diff --git a/builtin/difftool.c b/builtin/difftool.c
index d13350ce83..a3510caf13 100644
--- a/builtin/difftool.c
+++ b/builtin/difftool.c
@@ -616,10 +616,34 @@ static int run_file_diff(int prompt, const char *prefix,
 	exit(ret);
 }
 
+/*
+ * NEEDSWORK: this function can go once the legacy-difftool Perl script is
+ * retired.
+ *
+ * We intentionally avoid reading the config directly here, to avoid messing up
+ * the GIT_* environment variables when we need to fall back to exec()ing the
+ * Perl script.
+ */
+static int use_builtin_difftool(void) {
+	struct child_process cp = CHILD_PROCESS_INIT;
+	struct strbuf out = STRBUF_INIT;
+	int ret;
+
+	argv_array_pushl(&cp.args,
+			 "config", "--bool", "difftool.usebuiltin", NULL);
+	cp.git_cmd = 1;
+	if (capture_command(&cp, &out, 6))
+		return 0;
+	strbuf_trim(&out);
+	ret = !strcmp("true", out.buf);
+	strbuf_release(&out);
+	return ret;
+}
+
 int cmd_difftool(int argc, const char **argv, const char *prefix)
 {
 	int use_gui_tool = 0, dir_diff = 0, prompt = -1, symlinks = 0,
-	    tool_help = 0;
+	    tool_help = 0, nongit;
 	static char *difftool_cmd = NULL, *extcmd = NULL;
 	struct option builtin_difftool_options[] = {
 		OPT_BOOL('g', "gui", &use_gui_tool,
@@ -647,6 +671,25 @@ int cmd_difftool(int argc, const char **argv, const char *prefix)
 		OPT_END()
 	};
 
+	/*
+	 * NEEDSWORK: Once the builtin difftool has been tested enough
+	 * and git-legacy-difftool.perl is retired to contrib/, this preamble
+	 * can be removed.
+	 */
+	if (!use_builtin_difftool()) {
+		const char *path = mkpath("%s/git-legacy-difftool",
+					  git_exec_path());
+
+		if (sane_execvp(path, (char **)argv) < 0)
+			die_errno("could not exec %s", path);
+
+		return 0;
+	}
+	prefix = setup_git_directory_gently(&nongit);
+	trace_repo_setup(prefix);
+	if (!nongit)
+		setup_work_tree();
+
 	git_config(difftool_config, NULL);
 	symlinks = has_symlinks;
 
@@ -657,6 +700,8 @@ int cmd_difftool(int argc, const char **argv, const char *prefix)
 	if (tool_help)
 		return print_tool_help();
 
+	if (nongit)
+		die("Not a git repository (or any of the parent directories): .git");
 	/* NEEDSWORK: once we no longer spawn anything, remove this */
 	setenv(GIT_DIR_ENVIRONMENT, absolute_path(get_git_dir()), 1);
 	setenv(GIT_WORK_TREE_ENVIRONMENT, absolute_path(get_git_work_tree()), 1);
diff --git a/contrib/examples/git-difftool.perl b/git-legacy-difftool.perl
old mode 100755
new mode 100644
similarity index 100%
rename from contrib/examples/git-difftool.perl
rename to git-legacy-difftool.perl
diff --git a/git.c b/git.c
index d2d843d824..519a4c6f82 100644
--- a/git.c
+++ b/git.c
@@ -424,7 +424,12 @@ static struct cmd_struct commands[] = {
 	{ "diff-files", cmd_diff_files, RUN_SETUP | NEED_WORK_TREE },
 	{ "diff-index", cmd_diff_index, RUN_SETUP },
 	{ "diff-tree", cmd_diff_tree, RUN_SETUP },
-	{ "difftool", cmd_difftool, RUN_SETUP | NEED_WORK_TREE },
+	/*
+	 * NEEDSWORK: Once the redirection to git-legacy-difftool.perl in
+	 * builtin/difftool.c has been removed, this entry should be changed to
+	 * RUN_SETUP | NEED_WORK_TREE
+	 */
+	{ "difftool", cmd_difftool },
 	{ "fast-export", cmd_fast_export, RUN_SETUP },
 	{ "fetch", cmd_fetch, RUN_SETUP },
 	{ "fetch-pack", cmd_fetch_pack, RUN_SETUP },
diff --git a/t/t7800-difftool.sh b/t/t7800-difftool.sh
index 97bae54d83..e7ec09d6f3 100755
--- a/t/t7800-difftool.sh
+++ b/t/t7800-difftool.sh
@@ -23,13 +23,41 @@ prompt_given ()
 	test "$prompt" = "Launch 'test-tool' [Y/n]? branch"
 }
 
+for use_builtin_difftool in false true
+do
+
+case "$use_builtin_difftool" in
+true)
+	GIT_CONFIG_PARAMETERS="'difftool.usebuiltin=true'"
+	export GIT_CONFIG_PARAMETERS
+	;;
+false)
+	test_have_prereq PERL || {
+		say 'Skipping scripted difftool (missing PERL)'
+		continue
+	}
+	;;
+esac
+
+test_expect_success 'verify we are running the correct difftool' '
+	if test true = '$use_builtin_difftool'
+	then
+		test_must_fail ok=129 git difftool -h >help &&
+		grep "g, --gui" help
+	else
+		git difftool -h >help &&
+		grep "g|--gui" help
+	fi
+'
+
 test_expect_success 'basic usage requires no repo' '
-	test_expect_code 129 git difftool -h >output &&
+	code='$(test "$use_builtin_difftool" = true && echo 129 || echo 0)' &&
+	test_expect_code $code git difftool -h >output &&
 	grep ^usage: output &&
 	# create a ceiling directory to prevent Git from finding a repo
 	mkdir -p not/repo &&
 	test_when_finished rm -r not &&
-	test_expect_code 129 \
+	test_expect_code $code \
 	env GIT_CEILING_DIRECTORIES="$(pwd)/not" \
 	git -C not/repo difftool -h >output &&
 	grep ^usage: output
@@ -616,4 +644,13 @@ test_expect_success SYMLINKS 'difftool --dir-diff symlinked directories' '
 	)
 '
 
+test true != $use_builtin_difftool || break
+
+test_expect_success 'tear down for re-run' '
+	rm -rf * .[a-z]* &&
+	git init
+'
+
+done
+
 test_done