diff --git a/lisp/progmodes/project.el b/lisp/progmodes/project.el
index fda1081eb62..e3e7654e687 100644
--- a/lisp/progmodes/project.el
+++ b/lisp/progmodes/project.el
@@ -647,6 +647,7 @@ project--vc-list-files
             (include-untracked (project--value-in-dir
                                 'project-vc-include-untracked
                                 dir))
+            (submodules (project--git-submodules))
             files)
        (setq args (append args
                           '("-c" "--exclude-standard")
@@ -680,13 +681,24 @@ project--vc-list-files
        (setq files
              (mapcar
               (lambda (file) (concat default-directory file))
-              (split-string
-               (apply #'vc-git--run-command-string nil "ls-files" args)
-               "\0" t)))
+              (let* ((files
+                      (split-string
+                       (apply #'vc-git--run-command-string nil "ls-files" args)
+                       "\0" t))
+                     ref)
+                (when submodules
+                  ;; Hand-optimized version of nset-difference.
+                  (while (member (car files) submodules)
+                    (setq files (cdr files)))
+                  (setq ref files)
+                  (while ref
+                    (if (member (cadr ref) submodules)
+                        (setcdr ref (cddr ref))
+                      (setq ref (cdr ref)))))
+                files)))
        (when (project--vc-merge-submodules-p default-directory)
          ;; Unfortunately, 'ls-files --recurse-submodules' conflicts with '-o'.
-         (let* ((submodules (project--git-submodules))
-                (sub-files
+         (let ((sub-files
                  (mapcar
                   (lambda (module)
                     (when (file-directory-p module)