diff --git a/tests/fixtures/layout-repo-deleted.yaml b/tests/fixtures/layout-repo-deleted.yaml
new file mode 100644
index 0000000000..967009a25e
--- /dev/null
+++ b/tests/fixtures/layout-repo-deleted.yaml
@@ -0,0 +1,52 @@
+pipelines:
+  - name: check
+    manager: IndependentPipelineManager
+    trigger:
+      gerrit:
+        - event: patchset-created
+    success:
+      gerrit:
+        verified: 1
+    failure:
+      gerrit:
+        verified: -1
+
+  - name: post
+    manager: IndependentPipelineManager
+    trigger:
+      gerrit:
+        - event: ref-updated
+          ref: ^(?!refs/).*$
+
+  - name: gate
+    manager: DependentPipelineManager
+    failure-message: Build failed.  For information on how to proceed, see http://wiki.example.org/Test_Failures
+    trigger:
+      gerrit:
+        - event: comment-added
+          approval:
+            - approved: 1
+    success:
+      gerrit:
+        verified: 2
+        submit: true
+    failure:
+      gerrit:
+        verified: -2
+    start:
+      gerrit:
+        verified: 0
+    precedence: high
+
+projects:
+  - name: org/delete-project
+    check:
+      - project-merge:
+        - project-test1
+        - project-test2
+    gate:
+      - project-merge:
+        - project-test1
+        - project-test2
+    post:
+      - project-post
diff --git a/tests/test_scheduler.py b/tests/test_scheduler.py
index 70956b4e46..cdc67690b7 100644
--- a/tests/test_scheduler.py
+++ b/tests/test_scheduler.py
@@ -2807,6 +2807,43 @@ class TestScheduler(testtools.TestCase):
         self.assertEqual(A.data['status'], 'MERGED')
         self.assertEqual(A.reported, 2)
 
+    def test_repo_deleted(self):
+        self.config.set('zuul', 'layout_config',
+                        'tests/fixtures/layout-repo-deleted.yaml')
+        self.sched.reconfigure(self.config)
+
+        self.init_repo("org/delete-project")
+        A = self.fake_gerrit.addFakeChange('org/delete-project', 'master', 'A')
+
+        A.addApproval('CRVW', 2)
+        self.fake_gerrit.addEvent(A.addApproval('APRV', 1))
+        self.waitUntilSettled()
+        self.assertEqual(self.getJobFromHistory('project-merge').result,
+                         'SUCCESS')
+        self.assertEqual(self.getJobFromHistory('project-test1').result,
+                         'SUCCESS')
+        self.assertEqual(self.getJobFromHistory('project-test2').result,
+                         'SUCCESS')
+        self.assertEqual(A.data['status'], 'MERGED')
+        self.assertEqual(A.reported, 2)
+
+        # Delete org/new-project zuul repo. Should be recloned.
+        shutil.rmtree(os.path.join(self.git_root, "org/delete-project"))
+
+        B = self.fake_gerrit.addFakeChange('org/delete-project', 'master', 'B')
+
+        B.addApproval('CRVW', 2)
+        self.fake_gerrit.addEvent(B.addApproval('APRV', 1))
+        self.waitUntilSettled()
+        self.assertEqual(self.getJobFromHistory('project-merge').result,
+                         'SUCCESS')
+        self.assertEqual(self.getJobFromHistory('project-test1').result,
+                         'SUCCESS')
+        self.assertEqual(self.getJobFromHistory('project-test2').result,
+                         'SUCCESS')
+        self.assertEqual(B.data['status'], 'MERGED')
+        self.assertEqual(B.reported, 2)
+
     def test_timer(self):
         "Test that a periodic job is triggered"
         self.worker.hold_jobs_in_build = True
diff --git a/zuul/merger.py b/zuul/merger.py
index 218f7f22f5..5704d617dd 100644
--- a/zuul/merger.py
+++ b/zuul/merger.py
@@ -38,9 +38,11 @@ class Repo(object):
             self.log.exception("Unable to initialize repo for %s" % remote)
 
     def _ensure_cloned(self):
-        if self._initialized:
+        repo_is_cloned = os.path.exists(self.local_path)
+        if self._initialized and repo_is_cloned:
             return
-        if not os.path.exists(self.local_path):
+        # If the repo does not exist, clone the repo.
+        if not repo_is_cloned:
             self.log.debug("Cloning from %s to %s" % (self.remote_url,
                                                       self.local_path))
             git.Repo.clone_from(self.remote_url, self.local_path)