diff --git a/gix/src/open/repository.rs b/gix/src/open/repository.rs
index 1b367497ffa..bff4ab93098 100644
--- a/gix/src/open/repository.rs
+++ b/gix/src/open/repository.rs
@@ -301,7 +301,18 @@ impl ThreadSafeRepository {
                     | gix_config::Source::EnvOverride => wt_path,
                     _ => git_dir.join(wt_path).into(),
                 };
-                worktree_dir = gix_path::normalize(wt_path, current_dir).map(Cow::into_owned);
+
+                // the reason we use realpath instead of gix_path::normalize here is because there
+                // could be any intermediate symlinks (for example due to a symlinked .git
+                // directory)
+                worktree_dir = gix_path::realpath(&wt_path).ok();
+                // restore the relative path if possible after resolving the absolute path
+                if wt_path.is_relative() {
+                    if let Some(rel_path) = worktree_dir.as_deref().and_then(|p| p.strip_prefix(current_dir).ok()) {
+                        worktree_dir = Some(rel_path.to_path_buf());
+                    }
+                }
+
                 #[allow(unused_variables)]
                 if let Some(worktree_path) = worktree_dir.as_deref().filter(|wtd| !wtd.is_dir()) {
                     gix_trace::warn!("The configured worktree path '{}' is not a directory or doesn't exist - `core.worktree` may be misleading", worktree_path.display());
diff --git a/gix/tests/fixtures/generated-archives/.gitignore b/gix/tests/fixtures/generated-archives/.gitignore
index 9279e744abb..82408d215eb 100644
--- a/gix/tests/fixtures/generated-archives/.gitignore
+++ b/gix/tests/fixtures/generated-archives/.gitignore
@@ -8,4 +8,5 @@
 /make_signatures_repo.tar
 /make_diff_repos.tar
 /make_submodule_with_worktree.tar
-/repo_with_untracked_files.tar
\ No newline at end of file
+/repo_with_untracked_files.tar
+/make_submodule_with_symlinked_git_dir.tar
diff --git a/gix/tests/fixtures/make_submodule_with_symlinked_git_dir.sh b/gix/tests/fixtures/make_submodule_with_symlinked_git_dir.sh
new file mode 100755
index 00000000000..1ea5a1071ac
--- /dev/null
+++ b/gix/tests/fixtures/make_submodule_with_symlinked_git_dir.sh
@@ -0,0 +1,28 @@
+#!/usr/bin/env bash
+set -eu -o pipefail
+
+git init -q module1
+(cd module1
+  touch this
+  mkdir subdir
+  touch subdir/that
+  git add .
+  git commit -q -m c1
+  echo hello >> this
+  git commit -q -am c2
+  touch untracked
+)
+
+mkdir symlinked-git-dir
+(cd symlinked-git-dir
+  git init -q r1
+  (cd r1
+    git commit -q --allow-empty -m "init"
+  )
+
+  git config -f r1/.git/config core.worktree "$(pwd)"
+  ln -s r1/.git .git
+
+  git -c protocol.file.allow=always submodule add ../module1 m1
+  git commit -m "add module 1"
+)
diff --git a/gix/tests/gix/status.rs b/gix/tests/gix/status.rs
index 8b832f5c2c8..cb68289de4c 100644
--- a/gix/tests/gix/status.rs
+++ b/gix/tests/gix/status.rs
@@ -310,6 +310,27 @@ mod index_worktree {
             );
         }
 
+        #[test]
+        fn submodule_in_symlinked_dir() -> crate::Result {
+            use crate::util::named_subrepo_opts;
+            let repo = named_subrepo_opts(
+                "make_submodule_with_symlinked_git_dir.sh",
+                "symlinked-git-dir",
+                gix::open::Options::isolated(),
+            )?;
+            let status = repo
+                .status(gix::progress::Discard)?
+                .index_worktree_options_mut(|opts| {
+                    opts.sorting =
+                        Some(gix::status::plumbing::index_as_worktree_with_renames::Sorting::ByPathCaseSensitive);
+                })
+                .into_index_worktree_iter(None)?;
+            for change in status {
+                change?;
+            }
+            Ok(())
+        }
+
         #[test]
         fn submodule_modification() -> crate::Result {
             let repo = submodule_repo("modified-untracked-and-submodule-head-changed-and-modified")?;