diff --git a/scripts/setup-hooks.sh b/scripts/setup-hooks.sh
index 41db69f..3605182 100755
--- a/scripts/setup-hooks.sh
+++ b/scripts/setup-hooks.sh
@@ -4,18 +4,32 @@
 
 set -euo pipefail
 
-REPO_ROOT="$(cd "$(dirname "${BASH_SOURCE[0]}")/.." && pwd)"
-HOOKS_DIR="${REPO_ROOT}/.git/hooks"
+REPO_ROOT="$(cd "$(dirname "${BASH_SOURCE[0]}")/.." && pwd -P)"
 
-if [[ ! -d "${REPO_ROOT}/.git" ]]; then
+# In a linked worktree, .git is a file, so ask git for the worktree root.
+# The root must be REPO_ROOT. If git finds only an ancestor repository (for
+# example, a copy of this repo inside an unrelated checkout), do not install
+# the hook into that repository.
+TOPLEVEL="$(git -C "${REPO_ROOT}" rev-parse --show-toplevel 2>/dev/null || true)"
+if [[ -z "${TOPLEVEL}" ]] || [[ "$(cd "${TOPLEVEL}" && pwd -P)" != "${REPO_ROOT}" ]]; then
   echo "Error: not a git repository. Run from the repo root." >&2
   exit 1
 fi
 
+# Use the hooks directory that git reads. In a linked worktree this is in the
+# common git directory. It also obeys core.hooksPath.
+HOOKS_DIR="$(git -C "${REPO_ROOT}" rev-parse --git-path hooks)"
+if [[ "${HOOKS_DIR}" != /* ]]; then
+  HOOKS_DIR="${REPO_ROOT}/${HOOKS_DIR}"
+fi
+
 mkdir -p "${HOOKS_DIR}"
 
-# Install pre-commit hook
-cp "${REPO_ROOT}/scripts/pre-commit" "${HOOKS_DIR}/pre-commit"
+# Install pre-commit hook. If core.hooksPath points to scripts/, the hook is
+# already in place, and cp would fail because the files are the same.
+if [[ ! "${REPO_ROOT}/scripts/pre-commit" -ef "${HOOKS_DIR}/pre-commit" ]]; then
+  cp "${REPO_ROOT}/scripts/pre-commit" "${HOOKS_DIR}/pre-commit"
+fi
 chmod +x "${HOOKS_DIR}/pre-commit"
 
 # Install git-secrets hooks (if git-secrets is available)
diff --git a/tests/test-setup-hooks.sh b/tests/test-setup-hooks.sh
new file mode 100755
index 0000000..aba3770
--- /dev/null
+++ b/tests/test-setup-hooks.sh
@@ -0,0 +1,120 @@
+#!/usr/bin/env bash
+# tests/test-setup-hooks.sh — Test for scripts/setup-hooks.sh.
+#
+# In a linked worktree (git worktree add), .git is a file, not a directory,
+# and git reads hooks from the common git directory. This test makes a
+# temporary repository with a linked worktree and makes sure that:
+#   - setup-hooks.sh exits 0 in the main checkout and in the linked worktree
+#   - the pre-commit hook is in the hooks directory that git uses
+#   - setup-hooks.sh exits 1 outside a git repository
+#   - setup-hooks.sh exits 1 when git finds only an ancestor repository, and
+#     installs no hook into that repository
+#   - setup-hooks.sh exits 0 when core.hooksPath points to scripts/
+#
+# No AWS required. Run standalone or via CI (discovered by pack-tests.yml).
+set -euo pipefail
+
+SCRIPT_DIR="$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)"
+REPO_ROOT="$(cd "$SCRIPT_DIR/.." && pwd)"
+
+RED='\033[0;31m'; GREEN='\033[0;32m'; BOLD='\033[1m'; NC='\033[0m'
+PASS=0; FAIL=0
+
+pass() { printf "${GREEN}  \xE2\x9C\x93${NC} %s\n" "$1"; PASS=$((PASS + 1)); }
+fail() { printf "${RED}  \xE2\x9C\x97${NC} %s\n" "$1"; FAIL=$((FAIL + 1)); }
+
+printf "${BOLD}scripts/setup-hooks.sh${NC}\n"
+
+WORK="$(mktemp -d)"
+trap 'rm -rf "$WORK"' EXIT
+
+# Isolate from the user's git configuration.
+export GIT_CONFIG_GLOBAL=/dev/null GIT_CONFIG_NOSYSTEM=1
+G=(git -c user.name=test -c user.email=test@example.invalid -c init.defaultBranch=main)
+
+MAIN="$WORK/main"
+mkdir -p "$MAIN/scripts"
+cp "$REPO_ROOT/scripts/setup-hooks.sh" "$REPO_ROOT/scripts/pre-commit" "$MAIN/scripts/"
+"${G[@]}" -C "$MAIN" init -q
+"${G[@]}" -C "$MAIN" add scripts
+"${G[@]}" -C "$MAIN" commit -q -m init
+"${G[@]}" -C "$MAIN" worktree add -q "$WORK/linked" -b linked
+
+# Main checkout.
+if bash "$MAIN/scripts/setup-hooks.sh" >/dev/null 2>&1; then
+  pass "exits 0 in the main checkout"
+else
+  fail "exits non-zero in the main checkout"
+fi
+if [[ -x "$MAIN/.git/hooks/pre-commit" ]]; then
+  pass "pre-commit hook installed in .git/hooks"
+else
+  fail "pre-commit hook missing from .git/hooks"
+fi
+
+# Linked worktree: remove the hook first, so the check below proves this run.
+rm -f "$MAIN/.git/hooks/pre-commit"
+if bash "$WORK/linked/scripts/setup-hooks.sh" >/dev/null 2>&1; then
+  pass "exits 0 in a linked worktree"
+else
+  fail "exits non-zero in a linked worktree"
+fi
+hooks_dir="$(git -C "$WORK/linked" rev-parse --git-path hooks)"
+[[ "$hooks_dir" = /* ]] || hooks_dir="$WORK/linked/$hooks_dir"
+if [[ -x "$hooks_dir/pre-commit" ]]; then
+  pass "pre-commit hook installed in the hooks directory git uses"
+else
+  fail "pre-commit hook missing from $hooks_dir"
+fi
+if [[ ! -e "$WORK/linked/.git/hooks" ]]; then
+  pass "no hooks directory created under the worktree .git file"
+else
+  fail "hooks directory created under the worktree .git file"
+fi
+
+# Not a git repository.
+NOREPO="$WORK/norepo"
+mkdir -p "$NOREPO/scripts"
+cp "$REPO_ROOT/scripts/setup-hooks.sh" "$NOREPO/scripts/"
+rc=0
+GIT_CEILING_DIRECTORIES="$WORK" bash "$NOREPO/scripts/setup-hooks.sh" >/dev/null 2>&1 || rc=$?
+if [[ $rc -eq 1 ]]; then
+  pass "exits 1 outside a git repository"
+else
+  fail "exits $rc outside a git repository (expected 1)"
+fi
+
+# Copy inside an unrelated repository: git finds only the ancestor.
+OUTER="$WORK/outer"
+"${G[@]}" init -q "$OUTER"
+mkdir -p "$OUTER/vendor/lowkey/scripts"
+cp "$REPO_ROOT/scripts/setup-hooks.sh" "$REPO_ROOT/scripts/pre-commit" "$OUTER/vendor/lowkey/scripts/"
+rc=0
+bash "$OUTER/vendor/lowkey/scripts/setup-hooks.sh" >/dev/null 2>&1 || rc=$?
+if [[ $rc -eq 1 ]]; then
+  pass "exits 1 when git finds only an ancestor repository"
+else
+  fail "exits $rc when git finds only an ancestor repository (expected 1)"
+fi
+if [[ ! -e "$OUTER/.git/hooks/pre-commit" ]]; then
+  pass "no hook installed into the ancestor repository"
+else
+  fail "hook installed into the ancestor repository"
+fi
+
+# core.hooksPath points to the directory that holds the source hook.
+"${G[@]}" -C "$MAIN" config core.hooksPath scripts
+if bash "$MAIN/scripts/setup-hooks.sh" >/dev/null 2>&1; then
+  pass "exits 0 when core.hooksPath is scripts"
+else
+  fail "exits non-zero when core.hooksPath is scripts"
+fi
+if [[ -x "$MAIN/scripts/pre-commit" ]]; then
+  pass "pre-commit hook in scripts/ is executable"
+else
+  fail "pre-commit hook in scripts/ is not executable"
+fi
+"${G[@]}" -C "$MAIN" config --unset core.hooksPath
+
+printf "\n%d passed, %d failed\n" "$PASS" "$FAIL"
+[[ $FAIL -eq 0 ]]