diff --git a/src/anthropic/lib/_files.py b/src/anthropic/lib/_files.py
index 558619fb..a5d44e71 100644
--- a/src/anthropic/lib/_files.py
+++ b/src/anthropic/lib/_files.py
@@ -2,41 +2,172 @@
 
 import os
 from pathlib import Path
+from typing import Iterator, AsyncIterator
 
 import anyio
 
 from .._types import FileTypes
 
 
+def _is_path_within_root(path: Path, root: Path) -> bool:
+    """
+    Check if a path is within root directory.
+    Python 3.8 compatible alternative to Path.is_relative_to().
+    """
+    try:
+        path.relative_to(root)
+        return True
+    except ValueError:
+        return False
+
+
 def files_from_dir(directory: str | os.PathLike[str]) -> list[FileTypes]:
-    path = Path(directory)
+    path = Path(directory).resolve()
 
     files: list[FileTypes] = []
-    _collect_files(path, path.parent, files)
+    _collect_files(path, path.parent, files, root=path)
     return files
 
 
-def _collect_files(directory: Path, relative_to: Path, files: list[FileTypes]) -> None:
-    for path in directory.iterdir():
-        if path.is_dir():
-            _collect_files(path, relative_to, files)
-            continue
+def _collect_files(directory: Path, relative_to: Path, files: list[FileTypes], root: Path) -> None:
+    try:
+        items = list(directory.iterdir())
+    except (PermissionError, OSError):
+        # Skip directories we can't read
+        return
 
-        files.append((str(path.relative_to(relative_to)), path.read_bytes()))
+    for path in items:
+        try:
+            # Resolve symlinks and check they don't escape the root directory
+            resolved_path = path.resolve()
+            if not _is_path_within_root(resolved_path, root):
+                continue
+
+            if resolved_path.is_dir():
+                _collect_files(resolved_path, relative_to, files, root=root)
+                continue
+
+            with open(resolved_path, 'rb') as f:
+                content = f.read()
+            files.append((str(path.relative_to(relative_to)), content))
+        except (PermissionError, OSError):
+            # Skip files/symlinks we can't read or resolve
+            continue
 
 
 async def async_files_from_dir(directory: str | os.PathLike[str]) -> list[FileTypes]:
     path = anyio.Path(directory)
+    # Resolve to get absolute path - returns a standard Path, not anyio.Path
+    resolved_root = Path(await path.resolve())
 
     files: list[FileTypes] = []
-    await _async_collect_files(path, path.parent, files)
+    await _async_collect_files(path, path.parent, files, root=resolved_root)
     return files
 
 
-async def _async_collect_files(directory: anyio.Path, relative_to: anyio.Path, files: list[FileTypes]) -> None:
-    async for path in directory.iterdir():
-        if await path.is_dir():
-            await _async_collect_files(path, relative_to, files)
+async def _async_collect_files(
+    directory: anyio.Path, relative_to: anyio.Path, files: list[FileTypes], root: Path
+) -> None:
+    try:
+        items = [item async for item in directory.iterdir()]
+    except (PermissionError, OSError):
+        # Skip directories we can't read
+        return
+
+    for path in items:
+        try:
+            # Resolve symlinks - this returns a standard Path, not anyio.Path
+            resolved_path = Path(await path.resolve())
+
+            # Check containment using standard Path methods (no await needed)
+            if not _is_path_within_root(resolved_path, root):
+                continue
+
+            if resolved_path.is_dir():
+                # Convert back to anyio.Path for recursive call
+                await _async_collect_files(anyio.Path(resolved_path), relative_to, files, root=root)
+                continue
+
+            async with await anyio.open_file(resolved_path, 'rb') as f:
+                content = await f.read()
+            files.append((str(path.relative_to(relative_to)), content))
+        except (PermissionError, OSError):
+            # Skip files/symlinks we can't read or resolve
             continue
 
-        files.append((str(path.relative_to(relative_to)), await path.read_bytes()))
+
+def files_from_dir_iter(directory: str | os.PathLike[str]) -> Iterator[FileTypes]:
+    """
+    Memory-efficient streaming version of files_from_dir.
+    Yields files one at a time instead of loading all into memory.
+    """
+    path = Path(directory).resolve()
+    yield from _collect_files_iter(path, path.parent, root=path)
+
+
+def _collect_files_iter(directory: Path, relative_to: Path, root: Path) -> Iterator[FileTypes]:
+    try:
+        items = list(directory.iterdir())
+    except (PermissionError, OSError):
+        # Skip directories we can't read
+        return
+
+    for path in items:
+        try:
+            # Resolve symlinks and check they don't escape the root directory
+            resolved_path = path.resolve()
+            if not _is_path_within_root(resolved_path, root):
+                continue
+
+            if resolved_path.is_dir():
+                yield from _collect_files_iter(resolved_path, relative_to, root=root)
+                continue
+
+            with open(resolved_path, 'rb') as f:
+                content = f.read()
+            yield (str(path.relative_to(relative_to)), content)
+        except (PermissionError, OSError):
+            # Skip files/symlinks we can't read or resolve
+            continue
+
+
+async def async_files_from_dir_iter(directory: str | os.PathLike[str]) -> AsyncIterator[FileTypes]:
+    """
+    Memory-efficient streaming version of async_files_from_dir.
+    Yields files one at a time instead of loading all into memory.
+    """
+    path = anyio.Path(directory)
+    resolved_root = Path(await path.resolve())
+    async for file in _async_collect_files_iter(path, path.parent, root=resolved_root):
+        yield file
+
+
+async def _async_collect_files_iter(
+    directory: anyio.Path, relative_to: anyio.Path, root: Path
+) -> AsyncIterator[FileTypes]:
+    try:
+        items = [item async for item in directory.iterdir()]
+    except (PermissionError, OSError):
+        # Skip directories we can't read
+        return
+
+    for path in items:
+        try:
+            # Resolve symlinks - returns standard Path
+            resolved_path = Path(await path.resolve())
+
+            # Check containment (no await - it's a standard Path method)
+            if not _is_path_within_root(resolved_path, root):
+                continue
+
+            if resolved_path.is_dir():
+                async for file in _async_collect_files_iter(anyio.Path(resolved_path), relative_to, root=root):
+                    yield file
+                continue
+
+            async with await anyio.open_file(resolved_path, 'rb') as f:
+                content = await f.read()
+            yield (str(path.relative_to(relative_to)), content)
+        except (PermissionError, OSError):
+            # Skip files/symlinks we can't read or resolve
+            continue