diff --git a/.github/workflows/test.yml b/.github/workflows/test.yml
index 0383c88..609e85f 100644
--- a/.github/workflows/test.yml
+++ b/.github/workflows/test.yml
@@ -136,6 +136,16 @@ jobs:
         run: __test__/verify-sparse-checkout-non-cone-mode.sh
 
       # LFS
+      # First check out without LFS so the reused worktree is left holding LFS
+      # pointer files; the `lfs: true` checkout below must then materialize them
+      # rather than leave the stale pointers in place (#270).
+      - name: Checkout LFS pointers (reused worktree setup)
+        uses: ./
+        with:
+          repository: actions/checkout # hardcoded, otherwise doesn't work from a fork
+          ref: test-data/v2/lfs
+          path: lfs
+          lfs: false
       - name: Checkout LFS
         uses: ./
         with:
diff --git a/__test__/git-auth-helper.test.ts b/__test__/git-auth-helper.test.ts
index ad3566a..44fc756 100644
--- a/__test__/git-auth-helper.test.ts
+++ b/__test__/git-auth-helper.test.ts
@@ -1044,6 +1044,7 @@ async function setup(testName: string): Promise<void> {
     getWorkingDirectory: jest.fn(() => workspace),
     init: jest.fn(),
     isDetached: jest.fn(),
+    lfsCheckout: jest.fn(),
     lfsFetch: jest.fn(),
     lfsInstall: jest.fn(),
     log1: jest.fn(),
diff --git a/__test__/git-directory-helper.test.ts b/__test__/git-directory-helper.test.ts
index de79dc8..bc0b70c 100644
--- a/__test__/git-directory-helper.test.ts
+++ b/__test__/git-directory-helper.test.ts
@@ -475,6 +475,7 @@ async function setup(testName: string): Promise<void> {
     getWorkingDirectory: jest.fn(() => repositoryPath),
     init: jest.fn(),
     isDetached: jest.fn(),
+    lfsCheckout: jest.fn(),
     lfsFetch: jest.fn(),
     lfsInstall: jest.fn(),
     log1: jest.fn(),
diff --git a/__test__/verify-lfs.sh b/__test__/verify-lfs.sh
index b0463f1..6011187 100755
--- a/__test__/verify-lfs.sh
+++ b/__test__/verify-lfs.sh
@@ -9,3 +9,8 @@ if [ ! -f "./lfs/lfs-file.bin" ]; then
     echo "Expected lfs file does not exist"
     exit 1
 fi
+
+if head -n 1 "./lfs/lfs-file.bin" | grep -q "git-lfs.github.com/spec"; then
+    echo "Expected lfs file to be materialized, but it is still an LFS pointer"
+    exit 1
+fi
diff --git a/dist/index.js b/dist/index.js
index 906b59a..b5065cc 100644
--- a/dist/index.js
+++ b/dist/index.js
@@ -913,6 +913,11 @@ class GitCommandManager {
             return !output.stdout.trim().startsWith('refs/heads/');
         });
     }
+    lfsCheckout() {
+        return __awaiter(this, void 0, void 0, function* () {
+            yield this.execGit(['lfs', 'checkout']);
+        });
+    }
     lfsFetch(ref) {
         return __awaiter(this, void 0, void 0, function* () {
             const args = ['lfs', 'fetch', 'origin', ref];
@@ -1609,6 +1614,11 @@ function getSource(settings) {
             core.startGroup('Checking out the ref');
             yield git.checkout(checkoutInfo.ref, checkoutInfo.startPoint);
             core.endGroup();
+            if (settings.lfs && !settings.sparseCheckout) {
+                core.startGroup('Checking out LFS objects');
+                yield git.lfsCheckout();
+                core.endGroup();
+            }
             // Submodules
             if (settings.submodules) {
                 // Temporarily override global config
diff --git a/src/git-command-manager.ts b/src/git-command-manager.ts
index f1349ce..aa26bb3 100644
--- a/src/git-command-manager.ts
+++ b/src/git-command-manager.ts
@@ -45,6 +45,7 @@ export interface IGitCommandManager {
   getWorkingDirectory(): string
   init(objectFormat?: string): Promise<void>
   isDetached(): Promise<boolean>
+  lfsCheckout(): Promise<void>
   lfsFetch(ref: string): Promise<void>
   lfsInstall(): Promise<void>
   log1(format?: string): Promise<string>
@@ -383,6 +384,10 @@ class GitCommandManager {
     return !output.stdout.trim().startsWith('refs/heads/')
   }
 
+  async lfsCheckout(): Promise<void> {
+    await this.execGit(['lfs', 'checkout'])
+  }
+
   async lfsFetch(ref: string): Promise<void> {
     const args = ['lfs', 'fetch', 'origin', ref]
 
diff --git a/src/git-source-provider.ts b/src/git-source-provider.ts
index 452d44e..335b478 100644
--- a/src/git-source-provider.ts
+++ b/src/git-source-provider.ts
@@ -271,6 +271,12 @@ export async function getSource(settings: IGitSourceSettings): Promise<void> {
     await git.checkout(checkoutInfo.ref, checkoutInfo.startPoint)
     core.endGroup()
 
+    if (settings.lfs && !settings.sparseCheckout) {
+      core.startGroup('Checking out LFS objects')
+      await git.lfsCheckout()
+      core.endGroup()
+    }
+
     // Submodules
     if (settings.submodules) {
       // Temporarily override global config