diff --git a/Modules/ExternalData.cmake b/Modules/ExternalData.cmake
index 187f408ff..8332725ca 100644
--- a/Modules/ExternalData.cmake
+++ b/Modules/ExternalData.cmake
@@ -551,7 +551,10 @@ function(_ExternalData_arg_find_files pattern regex)
       set(relname "${entry}")
       set(alg "")
     endif()
-    if("x${relname}" MATCHES "^x${regex}$" AND NOT IS_DIRECTORY "${top_src}/${entry}")
+    if("x${relname}" MATCHES "^x${regex}$" # matches
+        AND NOT IS_DIRECTORY "${top_src}/${entry}" # not a directory
+        AND NOT "x${relname}" MATCHES "(^x|/)\\.ExternalData_" # not staged obj
+        )
       set(name "${top_src}/${relname}")
       set(file "${top_bin}/${relname}")
       if(alg)
diff --git a/Tests/RunCMake/ExternalData/LinkDirectory1-stdout.txt b/Tests/RunCMake/ExternalData/LinkDirectory1-stdout.txt
new file mode 100644
index 000000000..953ea6854
--- /dev/null
+++ b/Tests/RunCMake/ExternalData/LinkDirectory1-stdout.txt
@@ -0,0 +1,5 @@
+-- Linked Dir/ToLink.txt.md5 to ExternalData MD5/c18ff9804c8deec9eaeb17063cda8b7b
+-- Raw data correctly transformed to content link!
+-- Staged content exists!
+-- Staged content is correct!
+-- Staged content was correctly not re-staged!
diff --git a/Tests/RunCMake/ExternalData/LinkDirectory1.cmake b/Tests/RunCMake/ExternalData/LinkDirectory1.cmake
new file mode 100644
index 000000000..541fc79b4
--- /dev/null
+++ b/Tests/RunCMake/ExternalData/LinkDirectory1.cmake
@@ -0,0 +1,37 @@
+include(ExternalData)
+set(ExternalData_LINK_CONTENT MD5)
+set(ExternalData_SOURCE_ROOT ${CMAKE_CURRENT_BINARY_DIR})
+set(ExternalData_BINARY_ROOT ${CMAKE_CURRENT_BINARY_DIR}/ExternalData)
+set(input ${CMAKE_CURRENT_BINARY_DIR}/Dir)
+set(output ${CMAKE_CURRENT_BINARY_DIR}/ExternalData/Dir)
+set(staged "${input}/.ExternalData_MD5_c18ff9804c8deec9eaeb17063cda8b7b")
+set(content "To be transformed into a content link.")
+file(REMOVE ${staged})
+file(REMOVE_RECURSE ${input})
+file(WRITE ${input}/ToLink.txt "${content}")
+ExternalData_Expand_Arguments(Data args "DATA{${input}/,REGEX:.*}")
+if("x${args}" STREQUAL "x${output}")
+  message(STATUS "Raw data correctly transformed to content link!")
+else()
+  message(FATAL_ERROR "Data reference transformed to:\n  ${args}\n"
+    "but we expected:\n  ${output}")
+endif()
+if(EXISTS "${staged}")
+  message(STATUS "Staged content exists!")
+else()
+  message(FATAL_ERROR "Staged content missing!")
+endif()
+
+# Expand again to check whether staged content is ignored.
+ExternalData_Expand_Arguments(Data args "DATA{${input}/,REGEX:.*}")
+file(STRINGS "${staged}" staged_content LIMIT_INPUT 1024)
+if("${content}" STREQUAL "${staged_content}")
+  message(STATUS "Staged content is correct!")
+else()
+  message(STATUS "Staged content is incorrect!")
+endif()
+if(EXISTS "${staged}.md5")
+  message(FATAL_ERROR "Staged content was incorrectly re-staged!")
+else()
+  message(STATUS "Staged content was correctly not re-staged!")
+endif()
diff --git a/Tests/RunCMake/ExternalData/RunCMakeTest.cmake b/Tests/RunCMake/ExternalData/RunCMakeTest.cmake
index ceb2ecffb..8fba82c39 100644
--- a/Tests/RunCMake/ExternalData/RunCMakeTest.cmake
+++ b/Tests/RunCMake/ExternalData/RunCMakeTest.cmake
@@ -13,6 +13,7 @@ run_cmake(Directory4)
 run_cmake(Directory5)
 run_cmake(LinkContentMD5)
 run_cmake(LinkContentSHA1)
+run_cmake(LinkDirectory1)
 run_cmake(MissingData)
 run_cmake(NoLinkInSource)
 run_cmake(NoURLTemplates)