diff --git a/builtin/index-pack.c b/builtin/index-pack.c
index f69a50d46b..8acd078aa0 100644
--- a/builtin/index-pack.c
+++ b/builtin/index-pack.c
@@ -38,15 +38,56 @@ struct base_data {
 	struct object_entry *obj;
 	int ref_first, ref_last;
 	int ofs_first, ofs_last;
+	/*
+	 * Threads should increment retain_data if they are about to call
+	 * patch_delta() using this struct's data as a base, and decrement this
+	 * when they are done. While retain_data is nonzero, this struct's data
+	 * will not be freed even if the delta base cache limit is exceeded.
+	 */
+	int retain_data;
+	/*
+	 * The number of direct children that have not been fully processed
+	 * (entered work_head, entered done_head, left done_head). When this
+	 * number reaches zero, this struct base_data can be freed.
+	 */
+	int children_remaining;
 
 	/* Not initialized by make_base(). */
+	struct list_head list;
 	void *data;
 	unsigned long size;
 };
 
+/*
+ * Stack of struct base_data that have unprocessed children.
+ * threaded_second_pass() uses this as a source of work (the other being the
+ * objects array).
+ *
+ * Guarded by work_mutex.
+ */
+static LIST_HEAD(work_head);
+
+/*
+ * Stack of struct base_data that have children, all of whom have been
+ * processed or are being processed, and at least one child is being processed.
+ * These struct base_data must be kept around until the last child is
+ * processed.
+ *
+ * Guarded by work_mutex.
+ */
+static LIST_HEAD(done_head);
+
+/*
+ * All threads share one delta base cache.
+ *
+ * base_cache_used is guarded by work_mutex, and base_cache_limit is read-only
+ * in a thread.
+ */
+static size_t base_cache_used;
+static size_t base_cache_limit;
+
 struct thread_local {
 	pthread_t thread;
-	size_t base_cache_used;
 	int pack_fd;
 };
 
@@ -369,36 +410,38 @@ static void free_base_data(struct base_data *c)
 {
 	if (c->data) {
 		FREE_AND_NULL(c->data);
-		get_thread_data()->base_cache_used -= c->size;
+		base_cache_used -= c->size;
 	}
 }
 
-static void prune_base_data(struct base_data *youngest_child)
+static void prune_base_data(struct base_data *retain)
 {
-	struct base_data *b;
-	struct thread_local *data = get_thread_data();
-	struct base_data **ancestry = NULL;
-	size_t nr = 0, alloc = 0;
-	ssize_t i;
+	struct list_head *pos;
 
-	if (data->base_cache_used <= delta_base_cache_limit)
+	if (base_cache_used <= base_cache_limit)
 		return;
 
-	/*
-	 * Free all ancestors of youngest_child until we have enough space,
-	 * starting with the oldest. (We cannot free youngest_child itself.)
-	 */
-	for (b = youngest_child->base; b != NULL; b = b->base) {
-		ALLOC_GROW(ancestry, nr + 1, alloc);
-		ancestry[nr++] = b;
+	list_for_each_prev(pos, &done_head) {
+		struct base_data *b = list_entry(pos, struct base_data, list);
+		if (b->retain_data || b == retain)
+			continue;
+		if (b->data) {
+			free_base_data(b);
+			if (base_cache_used <= base_cache_limit)
+				return;
+		}
 	}
-	for (i = nr - 1;
-	     i >= 0 && data->base_cache_used > delta_base_cache_limit;
-	     i--) {
-		if (ancestry[i]->data)
-			free_base_data(ancestry[i]);
+
+	list_for_each_prev(pos, &work_head) {
+		struct base_data *b = list_entry(pos, struct base_data, list);
+		if (b->retain_data || b == retain)
+			continue;
+		if (b->data) {
+			free_base_data(b);
+			if (base_cache_used <= base_cache_limit)
+				return;
+		}
 	}
-	free(ancestry);
 }
 
 static int is_delta_type(enum object_type type)
@@ -851,15 +894,7 @@ static void sha1_object(const void *data, struct object_entry *obj_entry,
 }
 
 /*
- * This function is part of find_unresolved_deltas(). There are two
- * walkers going in the opposite ways.
- *
- * The first one in find_unresolved_deltas() traverses down from
- * parent node to children, deflating nodes along the way. However,
- * memory for deflated nodes is limited by delta_base_cache_limit, so
- * at some point parent node's deflated content may be freed.
- *
- * The second walker is this function, which goes from current node up
+ * Walk from current node up
  * to top parent if necessary to deflate the node. In normal
  * situation, its parent node would be already deflated, so it just
  * needs to apply delta.
@@ -887,7 +922,7 @@ static void *get_base_data(struct base_data *c)
 		if (!delta_nr) {
 			c->data = get_data_from_pack(obj);
 			c->size = obj->size;
-			get_thread_data()->base_cache_used += c->size;
+			base_cache_used += c->size;
 			prune_base_data(c);
 		}
 		for (; delta_nr > 0; delta_nr--) {
@@ -903,7 +938,7 @@ static void *get_base_data(struct base_data *c)
 			free(raw);
 			if (!c->data)
 				bad_object(obj->idx.offset, _("failed to apply delta"));
-			get_thread_data()->base_cache_used += c->size;
+			base_cache_used += c->size;
 			prune_base_data(c);
 		}
 		free(delta);
@@ -921,6 +956,8 @@ static struct base_data *make_base(struct object_entry *obj,
 				&base->ref_first, &base->ref_last);
 	find_ofs_delta_children(obj->idx.offset,
 				&base->ofs_first, &base->ofs_last);
+	base->children_remaining = base->ref_last - base->ref_first +
+		base->ofs_last - base->ofs_first + 2;
 	return base;
 }
 
@@ -954,14 +991,8 @@ static struct base_data *resolve_delta(struct object_entry *delta_obj,
 		    &delta_obj->idx.oid);
 
 	result = make_base(delta_obj, base);
-	if (result->ref_last == -1 && result->ofs_last == -1) {
-		free(result_data);
-	} else {
-		result->data = result_data;
-		result->size = result_size;
-		get_thread_data()->base_cache_used += result->size;
-		prune_base_data(result);
-	}
+	result->data = result_data;
+	result->size = result_size;
 
 	counter_lock();
 	nr_resolved_deltas++;
@@ -970,86 +1001,6 @@ static struct base_data *resolve_delta(struct object_entry *delta_obj,
 	return result;
 }
 
-/*
- * Standard boolean compare-and-swap: atomically check whether "*type" is
- * "want"; if so, swap in "set" and return true. Otherwise, leave it untouched
- * and return false.
- */
-static int compare_and_swap_type(signed char *type,
-				 enum object_type want,
-				 enum object_type set)
-{
-	enum object_type old;
-
-	type_cas_lock();
-	old = *type;
-	if (old == want)
-		*type = set;
-	type_cas_unlock();
-
-	return old == want;
-}
-
-static struct base_data *find_unresolved_deltas_1(struct base_data *base,
-						  struct base_data *prev_base)
-{
-	if (base->ref_first <= base->ref_last) {
-		struct object_entry *child = objects + ref_deltas[base->ref_first].obj_no;
-		struct base_data *result;
-
-		if (!compare_and_swap_type(&child->real_type, OBJ_REF_DELTA,
-					   base->obj->real_type))
-			die("REF_DELTA at offset %"PRIuMAX" already resolved (duplicate base %s?)",
-			    (uintmax_t)child->idx.offset,
-			    oid_to_hex(&base->obj->idx.oid));
-
-		get_base_data(base);
-		result = resolve_delta(child, base);
-		if (base->ref_first == base->ref_last && base->ofs_last == -1)
-			free_base_data(base);
-
-		base->ref_first++;
-		return result;
-	}
-
-	if (base->ofs_first <= base->ofs_last) {
-		struct object_entry *child = objects + ofs_deltas[base->ofs_first].obj_no;
-		struct base_data *result;
-
-		assert(child->real_type == OBJ_OFS_DELTA);
-		child->real_type = base->obj->real_type;
-		get_base_data(base);
-		result = resolve_delta(child, base);
-		if (base->ofs_first == base->ofs_last)
-			free_base_data(base);
-
-		base->ofs_first++;
-		return result;
-	}
-
-	free_base_data(base);
-	return NULL;
-}
-
-static void find_unresolved_deltas(struct base_data *base)
-{
-	struct base_data *new_base, *prev_base = NULL;
-	for (;;) {
-		new_base = find_unresolved_deltas_1(base, prev_base);
-
-		if (new_base) {
-			prev_base = base;
-			base = new_base;
-		} else {
-			free(base);
-			base = prev_base;
-			if (!base)
-				return;
-			prev_base = base->base;
-		}
-	}
-}
-
 static int compare_ofs_delta_entry(const void *a, const void *b)
 {
 	const struct ofs_delta_entry *delta_a = a;
@@ -1068,33 +1019,131 @@ static int compare_ref_delta_entry(const void *a, const void *b)
 	return oidcmp(&delta_a->oid, &delta_b->oid);
 }
 
-static void resolve_base(struct object_entry *obj)
-{
-	struct base_data *base_obj = make_base(obj, NULL);
-
-	find_unresolved_deltas(base_obj);
-}
-
 static void *threaded_second_pass(void *data)
 {
-	set_thread_data(data);
+	if (data)
+		set_thread_data(data);
 	for (;;) {
-		int i;
-		counter_lock();
-		display_progress(progress, nr_resolved_deltas);
-		counter_unlock();
+		struct base_data *parent = NULL;
+		struct object_entry *child_obj;
+		struct base_data *child;
+
 		work_lock();
-		while (nr_dispatched < nr_objects &&
-		       is_delta_type(objects[nr_dispatched].type))
-			nr_dispatched++;
-		if (nr_dispatched >= nr_objects) {
-			work_unlock();
-			break;
+		if (list_empty(&work_head)) {
+			/*
+			 * Take an object from the object array.
+			 */
+			while (nr_dispatched < nr_objects &&
+			       is_delta_type(objects[nr_dispatched].type))
+				nr_dispatched++;
+			if (nr_dispatched >= nr_objects) {
+				work_unlock();
+				break;
+			}
+			child_obj = &objects[nr_dispatched++];
+		} else {
+			/*
+			 * Peek at the top of the stack, and take a child from
+			 * it.
+			 */
+			parent = list_first_entry(&work_head, struct base_data,
+						  list);
+
+			if (parent->ref_first <= parent->ref_last) {
+				int offset = ref_deltas[parent->ref_first++].obj_no;
+				child_obj = objects + offset;
+				if (child_obj->real_type != OBJ_REF_DELTA)
+					die("REF_DELTA at offset %"PRIuMAX" already resolved (duplicate base %s?)",
+					    (uintmax_t) child_obj->idx.offset,
+					    oid_to_hex(&parent->obj->idx.oid));
+				child_obj->real_type = parent->obj->real_type;
+			} else {
+				child_obj = objects +
+					ofs_deltas[parent->ofs_first++].obj_no;
+				assert(child_obj->real_type == OBJ_OFS_DELTA);
+				child_obj->real_type = parent->obj->real_type;
+			}
+
+			if (parent->ref_first > parent->ref_last &&
+			    parent->ofs_first > parent->ofs_last) {
+				/*
+				 * This parent has run out of children, so move
+				 * it to done_head.
+				 */
+				list_del(&parent->list);
+				list_add(&parent->list, &done_head);
+			}
+
+			/*
+			 * Ensure that the parent has data, since we will need
+			 * it later.
+			 *
+			 * NEEDSWORK: If parent data needs to be reloaded, this
+			 * prolongs the time that the current thread spends in
+			 * the mutex. A mitigating factor is that parent data
+			 * needs to be reloaded only if the delta base cache
+			 * limit is exceeded, so in the typical case, this does
+			 * not happen.
+			 */
+			get_base_data(parent);
+			parent->retain_data++;
 		}
-		i = nr_dispatched++;
 		work_unlock();
 
-		resolve_base(&objects[i]);
+		if (parent) {
+			child = resolve_delta(child_obj, parent);
+			if (!child->children_remaining)
+				FREE_AND_NULL(child->data);
+		} else {
+			child = make_base(child_obj, NULL);
+			if (child->children_remaining) {
+				/*
+				 * Since this child has its own delta children,
+				 * we will need this data in the future.
+				 * Inflate now so that future iterations will
+				 * have access to this object's data while
+				 * outside the work mutex.
+				 */
+				child->data = get_data_from_pack(child_obj);
+				child->size = child_obj->size;
+			}
+		}
+
+		work_lock();
+		if (parent)
+			parent->retain_data--;
+		if (child->data) {
+			/*
+			 * This child has its own children, so add it to
+			 * work_head.
+			 */
+			list_add(&child->list, &work_head);
+			base_cache_used += child->size;
+			prune_base_data(NULL);
+		} else {
+			/*
+			 * This child does not have its own children. It may be
+			 * the last descendant of its ancestors; free those
+			 * that we can.
+			 */
+			struct base_data *p = parent;
+
+			while (p) {
+				struct base_data *next_p;
+
+				p->children_remaining--;
+				if (p->children_remaining)
+					break;
+
+				next_p = p->base;
+				free_base_data(p);
+				list_del(&p->list);
+				free(p);
+
+				p = next_p;
+			}
+		}
+		work_unlock();
 	}
 	return NULL;
 }
@@ -1195,6 +1244,7 @@ static void resolve_deltas(void)
 					  nr_ref_deltas + nr_ofs_deltas);
 
 	nr_dispatched = 0;
+	base_cache_limit = delta_base_cache_limit * nr_threads;
 	if (nr_threads > 1 || getenv("GIT_FORCE_THREADS")) {
 		init_thread();
 		for (i = 0; i < nr_threads; i++) {
@@ -1364,10 +1414,8 @@ static void fix_unresolved_deltas(struct hashfile *f)
 	for (i = 0; i < nr_ref_deltas; i++) {
 		struct ref_delta_entry *d = sorted_by_pos[i];
 		enum object_type type;
-		struct base_data *base;
 		void *data;
 		unsigned long size;
-		struct object_entry *obj;
 
 		if (objects[d->obj_no].real_type != OBJ_REF_DELTA)
 			continue;
@@ -1379,11 +1427,15 @@ static void fix_unresolved_deltas(struct hashfile *f)
 					   data, size,
 					   type_name(type)))
 			die(_("local object %s is corrupt"), oid_to_hex(&d->oid));
-		obj = append_obj_to_pack(f, d->oid.hash, data, size, type);
-		base = make_base(obj, NULL);
-		base->data = data;
-		base->size = size;
-		find_unresolved_deltas(base);
+
+		/*
+		 * Add this as an object to the objects array and call
+		 * threaded_second_pass() (which will pick up the added
+		 * object).
+		 */
+		append_obj_to_pack(f, d->oid.hash, data, size, type);
+		threaded_second_pass(NULL);
+
 		display_progress(progress, nr_resolved_deltas);
 	}
 	free(sorted_by_pos);
