diff --git a/extensions/git/package.json b/extensions/git/package.json
index 05dddd0d2a7..da96c49e3a7 100644
--- a/extensions/git/package.json
+++ b/extensions/git/package.json
@@ -2215,6 +2215,12 @@
           "scope": "resource",
           "default": 10000,
           "description": "%config.statusLimit%"
+        },
+        "git.repositoryScanMaxDepth": {
+          "type": "number",
+          "scope": "resource",
+          "default": 1,
+          "markdownDescription": "%config.repositoryScanMaxDepth%"
         }
       }
     },
diff --git a/extensions/git/package.nls.json b/extensions/git/package.nls.json
index 7b3af1f5ca9..481b1cb09c0 100644
--- a/extensions/git/package.nls.json
+++ b/extensions/git/package.nls.json
@@ -193,6 +193,7 @@
 	"config.showUnpublishedCommitsButton.whenEmpty": "Only shows the action button if there are no other changes and there are unpublished commits.",
 	"config.showUnpublishedCommitsButton.never": "Never shows the action button.",
 	"config.statusLimit": "Controls how to limit the number of changes that can be parsed from Git status command. Can be set to 0 for no limit.",
+	"config.repositoryScanMaxDepth": "Controls the depth used when scanning workspace folders for Git repositories when `#git.autoRepositoryDetection#` is set to `true` or `subFolders`. Can be set to `-1` for no limit.",
 	"submenu.explorer": "Git",
 	"submenu.commit": "Commit",
 	"submenu.commit.amend": "Amend",
diff --git a/extensions/git/src/model.ts b/extensions/git/src/model.ts
index 60a231321b1..a9a7b0e5f31 100644
--- a/extensions/git/src/model.ts
+++ b/extensions/git/src/model.ts
@@ -17,6 +17,7 @@ import { Askpass } from './askpass';
 import { IPushErrorHandlerRegistry } from './pushError';
 import { ApiRepository } from './api/api1';
 import { IRemoteSourcePublisherRegistry } from './remotePublisher';
+import { Log, LogLevel } from './log';
 
 const localize = nls.loadMessageBundle();
 
@@ -133,12 +134,20 @@ export class Model implements IRemoteSourcePublisherRegistry, IPushErrorHandlerR
 	}
 
 	/**
-	 * Scans the first level of each workspace folder, looking
-	 * for git repositories.
+	 * Scans each workspace folder, looking for git repositories. By
+	 * default it scans one level deep but that can be changed using
+	 * the git.repositoryScanMaxDepth setting.
 	 */
 	private async scanWorkspaceFolders(): Promise<void> {
 		const config = workspace.getConfiguration('git');
 		const autoRepositoryDetection = config.get<boolean | 'subFolders' | 'openEditors'>('autoRepositoryDetection');
+		const repositoryScanMaxDepth = config.get<number>('repositoryScanMaxDepth', 1);
+
+		// Log repository scan settings
+		if (Log.logLevel <= LogLevel.Trace) {
+			this.outputChannel.appendLine(`${logTimestamp()} Trace: autoRepositoryDetection="${autoRepositoryDetection}"`);
+			this.outputChannel.appendLine(`${logTimestamp()} Trace: repositoryScanMaxDepth=${repositoryScanMaxDepth}`);
+		}
 
 		if (autoRepositoryDetection !== true && autoRepositoryDetection !== 'subFolders') {
 			return;
@@ -146,9 +155,11 @@ export class Model implements IRemoteSourcePublisherRegistry, IPushErrorHandlerR
 
 		await Promise.all((workspace.workspaceFolders || []).map(async folder => {
 			const root = folder.uri.fsPath;
-			const children = (await fs.promises.readdir(root, { withFileTypes: true })).filter(dirent => dirent.isDirectory()).map(dirent => dirent.name);
-			const subfolders = new Set(children.filter(child => child !== '.git').map(child => path.join(root, child)));
 
+			// Workspace folder children
+			const subfolders = new Set(await this.traverseWorkspaceFolder(root, repositoryScanMaxDepth));
+
+			// Repository scan folders
 			const scanPaths = (workspace.isTrusted ? workspace.getConfiguration('git', folder.uri) : config).get<string[]>('scanRepositories') || [];
 			for (const scanPath of scanPaths) {
 				if (scanPath === '.git') {
@@ -167,6 +178,29 @@ export class Model implements IRemoteSourcePublisherRegistry, IPushErrorHandlerR
 		}));
 	}
 
+	private async traverseWorkspaceFolder(workspaceFolder: string, maxDepth: number): Promise<string[]> {
+		const result: string[] = [];
+		const foldersToTravers = [{ path: workspaceFolder, depth: 0 }];
+
+		while (foldersToTravers.length > 0) {
+			const currentFolder = foldersToTravers.shift()!;
+
+			if (currentFolder.depth < maxDepth || maxDepth === -1) {
+				const children = await fs.promises.readdir(currentFolder.path, { withFileTypes: true });
+				const childrenFolders = children
+					.filter(dirent => dirent.isDirectory() && dirent.name !== '.git')
+					.map(dirent => path.join(currentFolder.path, dirent.name));
+
+				result.push(...childrenFolders);
+				foldersToTravers.push(...childrenFolders.map(folder => {
+					return { path: folder, depth: currentFolder.depth + 1 };
+				}));
+			}
+		}
+
+		return result;
+	}
+
 	private onPossibleGitRepositoryChange(uri: Uri): void {
 		const config = workspace.getConfiguration('git');
 		const autoRepositoryDetection = config.get<boolean | 'subFolders' | 'openEditors'>('autoRepositoryDetection');
@@ -303,7 +337,9 @@ export class Model implements IRemoteSourcePublisherRegistry, IPushErrorHandlerR
 			repository.status(); // do not await this, we want SCM to know about the repo asap
 		} catch (ex) {
 			// noop
-			this.outputChannel.appendLine(`${logTimestamp()} Opening repository for path='${repoPath}' failed; ex=${ex}`);
+			if (Log.logLevel <= LogLevel.Trace) {
+				this.outputChannel.appendLine(`${logTimestamp()} Trace: Opening repository for path='${repoPath}' failed; ex=${ex}`);
+			}
 		}
 	}