diff --git a/crates/project/src/project_settings.rs b/crates/project/src/project_settings.rs
index f11263a8f70..0fc91d04ce6 100644
--- a/crates/project/src/project_settings.rs
+++ b/crates/project/src/project_settings.rs
@@ -494,6 +494,11 @@ pub struct GitSettings {
     ///
     /// Default: ../worktrees
     pub worktree_directory: String,
+    /// Whether to discover and monitor nested Git repositories inside the
+    /// workspace folder.
+    ///
+    /// Default: true
+    pub discover_nested_repositories: bool,
 }
 
 #[derive(Clone, Copy, Debug)]
@@ -688,6 +693,7 @@ impl Settings for ProjectSettings {
                 .worktree_directory
                 .clone()
                 .unwrap_or_else(|| DEFAULT_WORKTREE_DIRECTORY.to_string()),
+            discover_nested_repositories: git.discover_nested_repositories.unwrap_or(true),
         };
         Self {
             context_servers: project
diff --git a/crates/settings_content/src/project.rs b/crates/settings_content/src/project.rs
index fbeede37871..37b1cabd32a 100644
--- a/crates/settings_content/src/project.rs
+++ b/crates/settings_content/src/project.rs
@@ -543,6 +543,18 @@ pub struct GitSettings {
     ///
     /// Default: ../worktrees
     pub worktree_directory: Option<String>,
+    /// Whether to discover and monitor nested Git repositories inside the
+    /// opened workspace folder. When enabled, every `.git` directory found
+    /// during file scanning creates an active repository with its own
+    /// status tracking, diff bases, and branch queries.
+    ///
+    /// Disable this if your workspace contains many nested Git repositories
+    /// that you keep around for reference but do not actively develop in.
+    /// Those repositories will still be visible in the project panel but
+    /// will not cause background Git work.
+    ///
+    /// Default: true
+    pub discover_nested_repositories: Option<bool>,
 }
 
 #[with_fallible_options]
diff --git a/crates/worktree/src/worktree.rs b/crates/worktree/src/worktree.rs
index ce2f34bc78d..23e8080a305 100644
--- a/crates/worktree/src/worktree.rs
+++ b/crates/worktree/src/worktree.rs
@@ -274,6 +274,7 @@ struct BackgroundScannerState {
     changed_paths: Vec<Arc<RelPath>>,
     prev_snapshot: Snapshot,
     scanning_enabled: bool,
+    discover_nested_repositories: bool,
 }
 
 #[derive(Clone, Debug, Eq, PartialEq)]
@@ -1192,6 +1193,7 @@ impl LocalWorktree {
                         paths_to_scan: Default::default(),
                         removed_entries: Default::default(),
                         changed_paths: Default::default(),
+                        discover_nested_repositories: settings.discover_nested_repositories,
                     }),
                     phase: BackgroundScannerPhase::InitialScan,
                     share_private_files,
@@ -3242,6 +3244,13 @@ impl BackgroundScannerState {
                     return;
                 };
 
+                if !parent_dir.is_empty() && !self.discover_nested_repositories {
+                    log::debug!(
+                        "skipping nested git repository at {dot_git_path:?} because `git.discover_nested_repositories` is disabled"
+                    );
+                    return;
+                }
+
                 parent_dir.into()
             }
             None => {
diff --git a/crates/worktree/src/worktree_settings.rs b/crates/worktree/src/worktree_settings.rs
index 90fe5ba724b..864aff1422a 100644
--- a/crates/worktree/src/worktree_settings.rs
+++ b/crates/worktree/src/worktree_settings.rs
@@ -20,6 +20,7 @@ pub struct WorktreeSettings {
     pub private_files: PathMatcher,
     pub hidden_files: PathMatcher,
     pub read_only_files: PathMatcher,
+    pub discover_nested_repositories: bool,
 }
 
 impl WorktreeSettings {
@@ -95,6 +96,11 @@ impl Settings for WorktreeSettings {
             read_only_files: path_matchers(read_only_files, "read_only_files")
                 .log_err()
                 .unwrap_or_default(),
+            discover_nested_repositories: content
+                .git
+                .as_ref()
+                .and_then(|git| git.discover_nested_repositories)
+                .unwrap_or(true),
         }
     }
 }
diff --git a/crates/worktree/tests/integration/worktree_settings_tests.rs b/crates/worktree/tests/integration/worktree_settings_tests.rs
index 0a47766f35f..ba19968d668 100644
--- a/crates/worktree/tests/integration/worktree_settings_tests.rs
+++ b/crates/worktree/tests/integration/worktree_settings_tests.rs
@@ -18,6 +18,7 @@ fn make_settings_with_read_only(patterns: &[&str]) -> WorktreeSettings {
             PathStyle::local(),
         )
         .unwrap(),
+        discover_nested_repositories: true,
     }
 }