diff --git a/builtin/am.c b/builtin/am.c
index 8cb7e72e6c5..dfe2bf207e6 100644
--- a/builtin/am.c
+++ b/builtin/am.c
@@ -1917,9 +1917,8 @@ static int fast_forward_to(struct tree *head, struct tree *remote, int reset)
 	opts.dst_index = &the_index;
 	opts.update = 1;
 	opts.merge = 1;
-	opts.reset = reset;
-	if (!reset)
-		opts.preserve_ignored = 0; /* FIXME: !overwrite_ignore */
+	opts.reset = reset ? UNPACK_RESET_PROTECT_UNTRACKED : 0;
+	opts.preserve_ignored = 0; /* FIXME: !overwrite_ignore */
 	opts.fn = twoway_merge;
 	init_tree_desc(&t[0], head->buffer, head->size);
 	init_tree_desc(&t[1], remote->buffer, remote->size);
diff --git a/builtin/checkout.c b/builtin/checkout.c
index 0c5187025c5..ee3e450537f 100644
--- a/builtin/checkout.c
+++ b/builtin/checkout.c
@@ -646,9 +646,10 @@ static int reset_tree(struct tree *tree, const struct checkout_opts *o,
 	opts.head_idx = -1;
 	opts.update = worktree;
 	opts.skip_unmerged = !worktree;
-	opts.reset = 1;
+	opts.reset = o->force ? UNPACK_RESET_OVERWRITE_UNTRACKED :
+				UNPACK_RESET_PROTECT_UNTRACKED;
+	opts.preserve_ignored = (!o->force && !o->overwrite_ignore);
 	opts.merge = 1;
-	opts.preserve_ignored = 0;
 	opts.fn = oneway_merge;
 	opts.verbose_update = o->show_progress;
 	opts.src_index = &the_index;
diff --git a/builtin/read-tree.c b/builtin/read-tree.c
index 7f3c987b126..5e10caeff5a 100644
--- a/builtin/read-tree.c
+++ b/builtin/read-tree.c
@@ -166,6 +166,9 @@ int cmd_read_tree(int argc, const char **argv, const char *cmd_prefix)
 	if (1 < opts.merge + opts.reset + prefix_set)
 		die("Which one? -m, --reset, or --prefix?");
 
+	if (opts.reset)
+		opts.reset = UNPACK_RESET_OVERWRITE_UNTRACKED;
+
 	/*
 	 * NEEDSWORK
 	 *
diff --git a/builtin/reset.c b/builtin/reset.c
index 9d1391335a1..00d2de392a8 100644
--- a/builtin/reset.c
+++ b/builtin/reset.c
@@ -70,9 +70,14 @@ static int reset_index(const char *ref, const struct object_id *oid, int reset_t
 		break;
 	case HARD:
 		opts.update = 1;
-		/* fallthrough */
+		opts.reset = UNPACK_RESET_OVERWRITE_UNTRACKED;
+		break;
+	case MIXED:
+		opts.reset = UNPACK_RESET_PROTECT_UNTRACKED;
+		/* but opts.update=0, so working tree not updated */
+		break;
 	default:
-		opts.reset = 1;
+		BUG("invalid reset_type passed to reset_index");
 	}
 
 	read_cache_unmerged();
diff --git a/builtin/stash.c b/builtin/stash.c
index 92ad3241270..061237cf9a4 100644
--- a/builtin/stash.c
+++ b/builtin/stash.c
@@ -255,9 +255,9 @@ static int reset_tree(struct object_id *i_tree, int update, int reset)
 	opts.src_index = &the_index;
 	opts.dst_index = &the_index;
 	opts.merge = 1;
-	opts.reset = reset;
+	opts.reset = reset ? UNPACK_RESET_PROTECT_UNTRACKED : 0;
 	opts.update = update;
-	if (update && !reset)
+	if (update)
 		opts.preserve_ignored = 0; /* FIXME: !overwrite_ignore */
 	opts.fn = oneway_merge;
 
diff --git a/reset.c b/reset.c
index 5f69311b9f4..5788b1926f3 100644
--- a/reset.c
+++ b/reset.c
@@ -59,7 +59,7 @@ int reset_head(struct repository *r, struct object_id *oid, const char *action,
 	unpack_tree_opts.preserve_ignored = 0; /* FIXME: !overwrite_ignore */
 	init_checkout_metadata(&unpack_tree_opts.meta, switch_to_branch, oid, NULL);
 	if (!detach_head)
-		unpack_tree_opts.reset = 1;
+		unpack_tree_opts.reset = UNPACK_RESET_PROTECT_UNTRACKED;
 
 	if (repo_read_index_unmerged(r) < 0) {
 		ret = error(_("could not read index"));
diff --git a/t/t2500-untracked-overwriting.sh b/t/t2500-untracked-overwriting.sh
index 2412d121ea8..18604360df8 100755
--- a/t/t2500-untracked-overwriting.sh
+++ b/t/t2500-untracked-overwriting.sh
@@ -92,7 +92,7 @@ test_setup_checkout_m () {
 	)
 }
 
-test_expect_failure 'checkout -m does not nuke untracked file' '
+test_expect_success 'checkout -m does not nuke untracked file' '
 	test_setup_checkout_m &&
 	(
 		cd checkout &&
@@ -138,7 +138,7 @@ test_setup_sequencing () {
 	)
 }
 
-test_expect_failure 'git rebase --abort and untracked files' '
+test_expect_success 'git rebase --abort and untracked files' '
 	test_setup_sequencing rebase_abort_and_untracked &&
 	(
 		cd sequencing_rebase_abort_and_untracked &&
@@ -155,7 +155,7 @@ test_expect_failure 'git rebase --abort and untracked files' '
 	)
 '
 
-test_expect_failure 'git rebase fast forwarding and untracked files' '
+test_expect_success 'git rebase fast forwarding and untracked files' '
 	test_setup_sequencing rebase_fast_forward_and_untracked &&
 	(
 		cd sequencing_rebase_fast_forward_and_untracked &&
diff --git a/unpack-trees.c b/unpack-trees.c
index 512011cfa42..37f769030ab 100644
--- a/unpack-trees.c
+++ b/unpack-trees.c
@@ -1699,6 +1699,9 @@ int unpack_trees(unsigned len, struct tree_desc *t, struct unpack_trees_options
 	struct pattern_list pl;
 	int free_pattern_list = 0;
 
+	if (o->reset == UNPACK_RESET_INVALID)
+		BUG("o->reset had a value of 1; should be UNPACK_TREES_*_UNTRACKED");
+
 	if (len > MAX_UNPACK_TREES)
 		die("unpack_trees takes at most %d trees", MAX_UNPACK_TREES);
 
@@ -1711,6 +1714,10 @@ int unpack_trees(unsigned len, struct tree_desc *t, struct unpack_trees_options
 		ensure_full_index(o->dst_index);
 	}
 
+	if (o->reset == UNPACK_RESET_OVERWRITE_UNTRACKED &&
+	    o->preserve_ignored)
+		BUG("UNPACK_RESET_OVERWRITE_UNTRACKED incompatible with preserved ignored files");
+
 	if (!o->preserve_ignored) {
 		o->private_dir.flags |= DIR_SHOW_IGNORED;
 		setup_standard_excludes(&o->private_dir);
@@ -2227,7 +2234,8 @@ static int verify_absent_1(const struct cache_entry *ce,
 	int len;
 	struct stat st;
 
-	if (o->index_only || o->reset || !o->update)
+	if (o->index_only || !o->update ||
+	    o->reset == UNPACK_RESET_OVERWRITE_UNTRACKED)
 		return 0;
 
 	len = check_leading_path(ce->name, ce_namelen(ce), 0);
diff --git a/unpack-trees.h b/unpack-trees.h
index 2eb633bf771..1582599606a 100644
--- a/unpack-trees.h
+++ b/unpack-trees.h
@@ -48,9 +48,15 @@ void setup_unpack_trees_porcelain(struct unpack_trees_options *opts,
  */
 void unpack_trees_options_release(struct unpack_trees_options *opts);
 
+enum unpack_trees_reset_type {
+	UNPACK_RESET_NONE = 0,    /* traditional "false" value; still valid */
+	UNPACK_RESET_INVALID = 1, /* "true" no longer valid; use below values */
+	UNPACK_RESET_PROTECT_UNTRACKED,
+	UNPACK_RESET_OVERWRITE_UNTRACKED
+};
+
 struct unpack_trees_options {
-	unsigned int reset,
-		     merge,
+	unsigned int merge,
 		     update,
 		     preserve_ignored,
 		     clone,
@@ -68,6 +74,7 @@ struct unpack_trees_options {
 		     exiting_early,
 		     show_all_errors,
 		     dry_run;
+	enum unpack_trees_reset_type reset;
 	const char *prefix;
 	int cache_bottom;
 	struct dir_struct private_dir; /* for internal use only */
