diff --git a/docs/repository.rst b/docs/repository.rst
index 36d64ca..a38f052 100644
--- a/docs/repository.rst
+++ b/docs/repository.rst
@@ -7,9 +7,17 @@ The repository
    This is how to create non-bare repository::
 
     >>> from pygit2 import init_repository
-    >>> bare = False
-    >>> repo = init_repository('test', bare)
+    >>> repo = init_repository('test')
 
+   And this is how to create a bare repository::
+
+    >>> from pygit2 import init_repository
+    >>> repo = init_repository('test', bare=True)
+
+   But one can also do::
+
+    >>> from pygit2 import init_repository
+    >>> repo = init_repository('test', True)
 
 .. autofunction:: pygit2.discover_repository
 
diff --git a/src/pygit2.c b/src/pygit2.c
index b14fb49..54860b9 100644
--- a/src/pygit2.c
+++ b/src/pygit2.c
@@ -62,20 +62,20 @@ extern PyTypeObject RemoteType;
 
 
 PyDoc_STRVAR(init_repository__doc__,
-  "init_repository(path, bare) -> Repository\n"
+  "init_repository(path, bare=False) -> Repository\n"
   "\n"
   "Creates a new Git repository in the given path.");
 
 PyObject *
-init_repository(PyObject *self, PyObject *args)
-{
+init_repository(PyObject *self, PyObject *args, PyObject *kw) {
     git_repository *repo;
     Repository *py_repo;
     const char *path;
-    unsigned int bare;
+    unsigned int bare = 0;
     int err;
+    static char * kwlist[] = {"path", "bare", NULL};
 
-    if (!PyArg_ParseTuple(args, "sI", &path, &bare))
+    if (!PyArg_ParseTupleAndKeywords(args, kw, "s|I", kwlist, &path, &bare))
         return NULL;
 
     err = git_repository_init(&repo, path, bare);
@@ -168,7 +168,7 @@ hash(PyObject *self, PyObject *args)
 
 
 PyMethodDef module_methods[] = {
-    {"init_repository", init_repository, METH_VARARGS, init_repository__doc__},
+    {"init_repository", init_repository, METH_VARARGS|METH_KEYWORDS, init_repository__doc__},
     {"discover_repository", discover_repository, METH_VARARGS,
      discover_repository__doc__},
     {"hashfile", hashfile, METH_VARARGS, hashfile__doc__},
diff --git a/test/test_repository.py b/test/test_repository.py
index 10c9885..c874a00 100644
--- a/test/test_repository.py
+++ b/test/test_repository.py
@@ -234,6 +234,29 @@ class NewRepositoryTest(utils.NoRepoTestCase):
 
         assert os.path.exists(os.path.join(self._temp_dir, '.git'))
 
+class InitRepositoryTest(utils.NoRepoTestCase):
+    # under the assumption that repo.is_bare works
+
+    def test_no_arg(self):
+        repo = init_repository(self._temp_dir)
+        self.assertFalse(repo.is_bare)
+
+    def test_pos_arg_false(self):
+        repo = init_repository(self._temp_dir, False)
+        self.assertFalse(repo.is_bare)
+
+    def test_pos_arg_true(self):
+        repo = init_repository(self._temp_dir, True)
+        self.assertTrue(repo.is_bare)
+
+    def test_keyword_arg_false(self):
+        repo = init_repository(self._temp_dir, bare=False)
+        self.assertFalse(repo.is_bare)
+
+    def test_keyword_arg_true(self):
+        repo = init_repository(self._temp_dir, bare=True)
+        self.assertTrue(repo.is_bare)
+
 class DiscoverRepositoryTest(utils.NoRepoTestCase):
     def test_discover_repo(self):
         repo = init_repository(self._temp_dir, False)