diff --git a/gix/src/open/repository.rs b/gix/src/open/repository.rs
index 1b367497ffa..0a26a3184e9 100644
--- a/gix/src/open/repository.rs
+++ b/gix/src/open/repository.rs
@@ -272,7 +272,13 @@ impl ThreadSafeRepository {
                 section
                     .path
                     .as_deref()
-                    .and_then(|p| gix_path::normalize(p.into(), current_dir))
+                    .and_then(|p| {
+                        if p.exists() {
+                            gix_path::realpath_opts(p, current_dir, gix_path::realpath::MAX_SYMLINKS).ok()
+                        } else {
+                            gix_path::normalize(p.into(), current_dir).map(Cow::into_owned)
+                        }
+                    })
                     .is_some_and(|config_path| config_path.starts_with(git_dir))
             }
             let worktree_path = config
@@ -301,7 +307,23 @@ 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)
+                let is_relative = wt_path.is_relative();
+                worktree_dir = if wt_path.exists() {
+                    gix_path::realpath(&wt_path).ok()
+                } else {
+                    Some(wt_path.into_owned())
+                };
+                // restore the relative path if possible after resolving the absolute path
+                if 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"
+)