diff --git a/docs/changelog.rst b/docs/changelog.rst
--- a/docs/changelog.rst
+++ b/docs/changelog.rst
@@ -33,6 +33,7 @@ fixes
 - fixes #550 mercurial repositories comparision failed when origin repo had
   additional not-common changesets
 - fixed status of code-review in preview windows of pull request
+- git forks were not initialized at bare repos
 
 1.4.0 (**2012-09-03**)
 ----------------------
diff --git a/rhodecode/lib/celerylib/tasks.py b/rhodecode/lib/celerylib/tasks.py
--- a/rhodecode/lib/celerylib/tasks.py
+++ b/rhodecode/lib/celerylib/tasks.py
@@ -402,7 +402,7 @@ def create_repo_fork(form_data, cur_user
     backend = get_backend(repo_type)
     backend(safe_str(destination_fork_path), create=True,
             src_url=safe_str(source_repo_path),
-            update_after_clone=update_after_clone)
+            update_after_clone=update_after_clone, bare=True)
     log_create_repository(fork_repo.get_dict(), created_by=cur_user.username)
 
     action_logger(cur_user, 'user_forked_repo:%s' % fork_name,
diff --git a/rhodecode/lib/vcs/backends/git/repository.py b/rhodecode/lib/vcs/backends/git/repository.py
--- a/rhodecode/lib/vcs/backends/git/repository.py
+++ b/rhodecode/lib/vcs/backends/git/repository.py
@@ -178,7 +178,7 @@ class GitRepository(BaseRepository):
             raise urllib2.URLError("[%s] %s" % (url, e))
 
     def _get_repo(self, create, src_url=None, update_after_clone=False,
-            bare=False):
+                  bare=False):
         if create and os.path.exists(self.path):
             raise RepositoryError("Location already exist")
         if src_url and not create: