diff --git a/changelogs/unreleased/fix-squash-with-renamed-files.yml b/changelogs/unreleased/fix-squash-with-renamed-files.yml
new file mode 100644
index 00000000000..f7cd3a84367
--- /dev/null
+++ b/changelogs/unreleased/fix-squash-with-renamed-files.yml
@@ -0,0 +1,5 @@
+---
+title: Fix squashing when a file is renamed
+merge_request:
+author:
+type: fixed
diff --git a/lib/gitlab/git/repository.rb b/lib/gitlab/git/repository.rb
index c4deb4f7a47..e3cbf017e55 100644
--- a/lib/gitlab/git/repository.rb
+++ b/lib/gitlab/git/repository.rb
@@ -2200,7 +2200,7 @@ module Gitlab
         )
         diff_range = "#{start_sha}...#{end_sha}"
         diff_files = run_git!(
-          %W(diff --name-only --diff-filter=a --binary #{diff_range})
+          %W(diff --name-only --diff-filter=ar --binary #{diff_range})
         ).chomp
 
         with_worktree(squash_path, branch, sparse_checkout_files: diff_files, env: env) do
diff --git a/spec/lib/gitlab/git/repository_spec.rb b/spec/lib/gitlab/git/repository_spec.rb
index 464be6c6c5d..d601a383a98 100644
--- a/spec/lib/gitlab/git/repository_spec.rb
+++ b/spec/lib/gitlab/git/repository_spec.rb
@@ -2231,7 +2231,7 @@ describe Gitlab::Git::Repository, seed_helper: true do
       context 'sparse checkout', :skip_gitaly_mock do
         let(:expected_files) { %w(files files/js files/js/application.js) }
 
-        before do
+        it 'checks out only the files in the diff' do
           allow(repository).to receive(:with_worktree).and_wrap_original do |m, *args|
             m.call(*args) do
               worktree_path = args[0]
@@ -2243,10 +2243,33 @@ describe Gitlab::Git::Repository, seed_helper: true do
               expect(Dir[files_pattern]).to eq(expected)
             end
           end
+
+          subject
         end
 
-        it 'checkouts only the files in the diff' do
-          subject
+        context 'when the diff contains a rename' do
+          let(:repo) { Gitlab::Git::Repository.new('default', TEST_REPO_PATH, '').rugged }
+          let(:end_sha) { new_commit_move_file(repo).oid }
+
+          after do
+            # Erase our commits so other tests get the original repo
+            repo = Gitlab::Git::Repository.new('default', TEST_REPO_PATH, '').rugged
+            repo.references.update('refs/heads/master', SeedRepo::LastCommit::ID)
+          end
+
+          it 'does not include the renamed file in the sparse checkout' do
+            allow(repository).to receive(:with_worktree).and_wrap_original do |m, *args|
+              m.call(*args) do
+                worktree_path = args[0]
+                files_pattern = File.join(worktree_path, '**', '*')
+
+                expect(Dir[files_pattern]).not_to include('CHANGELOG')
+                expect(Dir[files_pattern]).not_to include('encoding/CHANGELOG')
+              end
+            end
+
+            subject
+          end
         end
       end
 
@@ -2257,7 +2280,7 @@ describe Gitlab::Git::Repository, seed_helper: true do
           allow(repository).to receive(:run_git!).and_call_original
           allow(repository).to receive(:run_git!).with(%W(diff --binary #{start_sha}...#{end_sha})).and_return(diff.force_encoding('ASCII-8BIT'))
 
-          expect(subject.length).to eq(40)
+          expect(subject).to match(/\h{40}/)
         end
       end
     end