diff --git a/plugin-gradle/CHANGES.md b/plugin-gradle/CHANGES.md
index ceb8f5ec43..5e22b36f27 100644
--- a/plugin-gradle/CHANGES.md
+++ b/plugin-gradle/CHANGES.md
@@ -3,6 +3,8 @@
 We adhere to the [keepachangelog](https://keepachangelog.com/en/1.0.0/) format (starting after version `3.27.0`).
 
 ## [Unreleased]
+### Fixed
+* `ratchetFrom` had a bug (now fixed) such that it reported all files outside the root directory as changed. ([#594](https://github.com/diffplug/spotless/pull/594))
 
 ## [4.1.0] - 2020-06-01
 ### Added
diff --git a/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/GitRatchet.java b/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/GitRatchet.java
index b366f1946a..1f61b0459d 100644
--- a/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/GitRatchet.java
+++ b/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/GitRatchet.java
@@ -66,6 +66,7 @@ public static boolean isClean(Project project, ObjectId treeSha, File file) thro
 		DirCache dirCache = repo.readDirCache();
 
 		try (TreeWalk treeWalk = new TreeWalk(repo)) {
+			treeWalk.setRecursive(true);
 			treeWalk.addTree(treeSha);
 			treeWalk.addTree(new DirCacheIterator(dirCache));
 			treeWalk.addTree(new FileTreeIterator(repo));
diff --git a/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RatchetFromTest.java b/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RatchetFromTest.java
index cfcf04bf60..576ef1fc40 100644
--- a/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RatchetFromTest.java
+++ b/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RatchetFromTest.java
@@ -19,6 +19,8 @@
 import org.junit.Test;
 
 public class RatchetFromTest extends GradleIntegrationTest {
+	private static final String TEST_PATH = "src/markdown/test.md";
+
 	@Test
 	public void singleProjectExhaustive() throws Exception {
 		Git git = Git.init().setDirectory(rootFolder()).call();
@@ -29,13 +31,13 @@ public void singleProjectExhaustive() throws Exception {
 				"spotless {",
 				"  ratchetFrom 'baseline'",
 				"  format 'misc', {",
-				"    target '*.md'",
+				"    target 'src/markdown/*.md'",
 				"    custom 'lowercase', { str -> str.toLowerCase() }",
 				"    bumpThisNumberIfACustomStepChanges(1)",
 				"  }",
 				"}");
-		setFile("test.md").toContent("HELLO");
-		git.add().addFilepattern("test.md").call();
+		setFile(TEST_PATH).toContent("HELLO");
+		git.add().addFilepattern(TEST_PATH).call();
 		git.commit().setMessage("Initial state").call();
 		// tag this initial state as the baseline for spotless to ratchet from
 		git.tag().setName("baseline").call();
@@ -45,41 +47,41 @@ public void singleProjectExhaustive() throws Exception {
 		assertClean();
 
 		// but if we change it so that it is not clean, spotless will now say it is dirty
-		setFile("test.md").toContent("HELLO WORLD");
+		setFile(TEST_PATH).toContent("HELLO WORLD");
 		assertDirty();
 		gradleRunner().withArguments("spotlessApply").build();
-		assertFile("test.md").hasContent("hello world");
+		assertFile(TEST_PATH).hasContent("hello world");
 
 		// but if we make it unchanged again, it goes back to being clean
-		setFile("test.md").toContent("HELLO");
+		setFile(TEST_PATH).toContent("HELLO");
 		assertClean();
 
 		// and if we make the index dirty
-		setFile("test.md").toContent("HELLO WORLD");
-		git.add().addFilepattern("test.md").call();
+		setFile(TEST_PATH).toContent("HELLO WORLD");
+		git.add().addFilepattern(TEST_PATH).call();
 		{
 			// and the content dirty in the same way, then it's dirty
 			assertDirty();
 			// if we make the content something else dirty, then it's dirty
-			setFile("test.md").toContent("HELLO MOM");
+			setFile(TEST_PATH).toContent("HELLO MOM");
 			assertDirty();
 			// if we make the content unchanged, even though index it and index are dirty, then it's clean
-			setFile("test.md").toContent("HELLO");
+			setFile(TEST_PATH).toContent("HELLO");
 			assertClean();
 			// if we delete the file, but it's still in the index, then it's clean
-			setFile("test.md").deleted();
+			setFile(TEST_PATH).deleted();
 			assertClean();
 		}
 		// if we remove the file from the index
-		git.rm().addFilepattern("test.md").setCached(true).call();
+		git.rm().addFilepattern(TEST_PATH).setCached(true).call();
 		{
 			// and it's gone in real life too, then it's clean
 			assertClean();
 			// if the content is there and unchanged, then it's clean
-			setFile("test.md").toContent("HELLO");
+			setFile(TEST_PATH).toContent("HELLO");
 			assertClean();
 			// if the content is dirty, then it's dirty
-			setFile("test.md").toContent("HELLO WORLD");
+			setFile(TEST_PATH).toContent("HELLO WORLD");
 			assertDirty();
 		}
 
diff --git a/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RegisterDependenciesTaskTest.java b/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RegisterDependenciesTaskTest.java
index 810635cffc..e5b6c3c34f 100644
--- a/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RegisterDependenciesTaskTest.java
+++ b/plugin-gradle/src/test/java/com/diffplug/gradle/spotless/RegisterDependenciesTaskTest.java
@@ -43,10 +43,10 @@ public void registerDependencies() throws IOException {
 		if (JreVersion.thisVm() == JreVersion._8) {
 			String oldestSupported = gradleRunner()
 					.withArguments("spotlessCheck").build().getOutput();
-			Assertions.assertThat(oldestSupported.replace("\r", "")).startsWith(
-					":spotlessCheck UP-TO-DATE\n" +
-							":spotlessInternalRegisterDependencies\n" +
-							":sub:spotlessJava\n" +
+			Assertions.assertThat(oldestSupported.replace("\r", ""))
+					.startsWith(":spotlessCheck UP-TO-DATE\n" +
+							":spotlessInternalRegisterDependencies\n")
+					.contains(":sub:spotlessJava\n" +
 							":sub:spotlessJavaCheck\n" +
 							":sub:spotlessCheck\n" +
 							"\n" +
@@ -56,10 +56,10 @@ public void registerDependencies() throws IOException {
 		setFile("gradle.properties").toLines();
 		String newestSupported = gradleRunner().withGradleVersion("6.0")
 				.withArguments("spotlessCheck").build().getOutput();
-		Assertions.assertThat(newestSupported.replace("\r", "")).startsWith(
-				"> Task :spotlessCheck UP-TO-DATE\n" +
-						"> Task :spotlessInternalRegisterDependencies\n" +
-						"> Task :sub:spotlessJava\n" +
+		Assertions.assertThat(newestSupported.replace("\r", ""))
+				.startsWith("> Task :spotlessCheck UP-TO-DATE\n" +
+						"> Task :spotlessInternalRegisterDependencies\n")
+				.contains("> Task :sub:spotlessJava\n" +
 						"> Task :sub:spotlessJavaCheck\n" +
 						"> Task :sub:spotlessCheck\n" +
 						"\n" +