diff --git a/cli/src/cli_util.rs b/cli/src/cli_util.rs
index 3ddff9761..603b50b9f 100644
--- a/cli/src/cli_util.rs
+++ b/cli/src/cli_util.rs
@@ -951,9 +951,10 @@ impl WorkspaceCommandHelper {
     /// If the working-copy branch is rebased, and if update is allowed, the new
     /// working-copy commit will be checked out.
     ///
-    /// This function does not import the Git HEAD.
+    /// This function does not import the Git HEAD, but the HEAD may be reset to
+    /// the working copy parent if the repository is colocated.
     #[instrument(skip_all)]
-    pub fn import_git_refs(&mut self, ui: &mut Ui) -> Result<(), CommandError> {
+    fn import_git_refs(&mut self, ui: &mut Ui) -> Result<(), CommandError> {
         let git_settings = self.settings.git_settings();
         let mut tx = self.start_transaction();
         // Automated import shouldn't fail because of reserved remote name.
diff --git a/cli/src/commands/git.rs b/cli/src/commands/git.rs
index b426b44a4..534de8085 100644
--- a/cli/src/commands/git.rs
+++ b/cli/src/commands/git.rs
@@ -16,6 +16,7 @@ use std::collections::HashSet;
 use std::io::Write;
 use std::ops::Deref;
 use std::path::{Path, PathBuf};
+use std::sync::Arc;
 use std::{fmt, fs, io};
 
 use clap::{ArgGroup, Subcommand};
@@ -30,7 +31,7 @@ use jj_lib::op_store::RefTarget;
 use jj_lib::refs::{
     classify_branch_push_action, BranchPushAction, BranchPushUpdate, TrackingRefPair,
 };
-use jj_lib::repo::Repo;
+use jj_lib::repo::{ReadonlyRepo, Repo};
 use jj_lib::repo_path::RepoPath;
 use jj_lib::revset::{self, RevsetExpression, RevsetIteratorExt as _};
 use jj_lib::settings::{ConfigResultExt as _, UserSettings};
@@ -41,12 +42,13 @@ use maplit::hashset;
 
 use crate::cli_util::{
     parse_string_pattern, print_trackable_remote_branches, resolve_multiple_nonempty_revsets,
-    short_change_hash, short_commit_hash, user_error, user_error_with_hint,
+    short_change_hash, short_commit_hash, start_repo_transaction, user_error, user_error_with_hint,
     user_error_with_hint_opt, user_error_with_message, CommandError, CommandHelper, RevisionArg,
     WorkspaceCommandHelper,
 };
 use crate::git_util::{
-    get_git_repo, print_failed_git_export, print_git_import_stats, with_remote_git_callbacks,
+    get_git_repo, is_colocated_git_workspace, print_failed_git_export, print_git_import_stats,
+    with_remote_git_callbacks,
 };
 use crate::ui::Ui;
 
@@ -388,11 +390,12 @@ pub fn git_init(
         let git_store_path = cwd.join(git_store_str);
         let (workspace, repo) =
             Workspace::init_external_git(command.settings(), workspace_root, &git_store_path)?;
-        let mut workspace_command = command.for_loaded_repo(ui, workspace, repo)?;
-        maybe_add_gitignore(&workspace_command)?;
         // Import refs first so all the reachable commits are indexed in
         // chronological order.
-        workspace_command.import_git_refs(ui)?;
+        let colocated = is_colocated_git_workspace(&workspace, &repo);
+        let repo = init_git_refs(ui, command, repo, colocated)?;
+        let mut workspace_command = command.for_loaded_repo(ui, workspace, repo)?;
+        maybe_add_gitignore(&workspace_command)?;
         workspace_command.maybe_snapshot(ui)?;
         if !workspace_command.working_copy_shared_with_git() {
             let mut tx = workspace_command.start_transaction();
@@ -423,6 +426,45 @@ pub fn git_init(
     Ok(())
 }
 
+/// Imports branches and tags from the underlying Git repo, exports changes if
+/// the repo is colocated.
+///
+/// This is similar to `WorkspaceCommandHelper::import_git_refs()`, but never
+/// moves the Git HEAD to the working copy parent.
+fn init_git_refs(
+    ui: &mut Ui,
+    command: &CommandHelper,
+    repo: Arc<ReadonlyRepo>,
+    colocated: bool,
+) -> Result<Arc<ReadonlyRepo>, CommandError> {
+    let mut tx = start_repo_transaction(&repo, command.settings(), command.string_args());
+    // There should be no old refs to abandon, but enforce it.
+    let mut git_settings = command.settings().git_settings();
+    git_settings.abandon_unreachable_commits = false;
+    let stats = git::import_some_refs(
+        tx.mut_repo(),
+        &git_settings,
+        // Initial import shouldn't fail because of reserved remote name.
+        |ref_name| !git::is_reserved_git_remote_ref(ref_name),
+    )?;
+    if !tx.mut_repo().has_changes() {
+        return Ok(repo);
+    }
+    print_git_import_stats(ui, &stats)?;
+    if colocated {
+        // If git.auto-local-branch = true, local branches could be created for
+        // the imported remote branches.
+        let failed_branches = git::export_refs(tx.mut_repo())?;
+        print_failed_git_export(ui, &failed_branches)?;
+    }
+    let repo = tx.commit("import git refs");
+    writeln!(
+        ui.stderr(),
+        "Done importing changes from the underlying Git repo."
+    )?;
+    Ok(repo)
+}
+
 fn cmd_git_init(
     ui: &mut Ui,
     command: &CommandHelper,
diff --git a/cli/tests/test_git_init.rs b/cli/tests/test_git_init.rs
index 97d47b65e..c9ae09cf2 100644
--- a/cli/tests/test_git_init.rs
+++ b/cli/tests/test_git_init.rs
@@ -12,6 +12,7 @@
 // See the License for the specific language governing permissions and
 // limitations under the License.
 
+use std::fmt::Write as _;
 use std::path::{Path, PathBuf};
 
 use test_case::test_case;
@@ -441,6 +442,70 @@ fn test_git_init_colocated_via_git_repo_path_imported_refs() {
     "###);
 }
 
+#[test]
+fn test_git_init_colocated_dirty_working_copy() {
+    let test_env = TestEnvironment::default();
+    let workspace_root = test_env.env_root().join("repo");
+    let git_repo = init_git_repo(&workspace_root, false);
+
+    let add_file_to_index = |name: &str, data: &str| {
+        std::fs::write(workspace_root.join(name), data).unwrap();
+        let mut index = git_repo.index().unwrap();
+        index.add_path(Path::new(name)).unwrap();
+        index.write().unwrap();
+    };
+    let get_git_statuses = || {
+        let mut buf = String::new();
+        for entry in git_repo.statuses(None).unwrap().iter() {
+            writeln!(buf, "{:?} {}", entry.status(), entry.path().unwrap()).unwrap();
+        }
+        buf
+    };
+
+    add_file_to_index("some-file", "new content");
+    add_file_to_index("new-staged-file", "new content");
+    std::fs::write(workspace_root.join("unstaged-file"), "new content").unwrap();
+    insta::assert_snapshot!(get_git_statuses(), @r###"
+    Status(INDEX_NEW) new-staged-file
+    Status(INDEX_MODIFIED) some-file
+    Status(WT_NEW) unstaged-file
+    "###);
+
+    let (stdout, stderr) = test_env.jj_cmd_ok(&workspace_root, &["git", "init", "--git-repo", "."]);
+    insta::assert_snapshot!(stdout, @"");
+    insta::assert_snapshot!(stderr, @r###"
+    Done importing changes from the underlying Git repo.
+    Initialized repo in "."
+    "###);
+
+    // Working-copy changes should have been snapshotted.
+    let stdout = test_env.jj_cmd_success(&workspace_root, &["log", "-s", "--ignore-working-copy"]);
+    insta::assert_snapshot!(stdout, @r###"
+    @  sqpuoqvx test.user@example.com 2001-02-03 04:05:07.000 +07:00 cd1e144d
+    │  (no description set)
+    │  A new-staged-file
+    │  M some-file
+    │  A unstaged-file
+    ◉  mwrttmos git.user@example.com 1970-01-01 01:02:03.000 +01:00 my-branch HEAD@git 8d698d4a
+    │  My commit message
+    │  A some-file
+    ◉  zzzzzzzz root() 00000000
+    "###);
+
+    // Git index should be consistent with the working copy parent. With the
+    // current implementation, the index is unchanged. Since jj created new
+    // working copy commit, it's also okay to update the index reflecting the
+    // working copy commit or the working copy parent.
+    insta::assert_snapshot!(get_git_statuses(), @r###"
+    Status(IGNORED) .jj/.gitignore
+    Status(IGNORED) .jj/repo/
+    Status(IGNORED) .jj/working_copy/
+    Status(INDEX_NEW) new-staged-file
+    Status(INDEX_MODIFIED) some-file
+    Status(WT_NEW) unstaged-file
+    "###);
+}
+
 #[test]
 fn test_git_init_external_but_git_dir_exists() {
     let test_env = TestEnvironment::default();