diff --git a/lib/fs.js b/lib/fs.js
index 076ddb50c37..4aac1923a5f 100644
--- a/lib/fs.js
+++ b/lib/fs.js
@@ -966,10 +966,12 @@ if (isWindows) {
   var nextPartRe = /(.*?)(?:[\/]+|$)/g;
 }
 
-// Regex to split a windows path into three parts: [*, device, slash,
-// tail] windows-only
-var splitDeviceRe =
-    /^([a-zA-Z]:|[\\\/]{2}[^\\\/]+[\\\/][^\\\/]+)?([\\\/])?([\s\S]*?)$/;
+// Regex to find the device root, including trailing slash. E.g. 'c:\\'.
+if (isWindows) {
+  var splitRootRe = /^(?:[a-zA-Z]:|[\\\/]{2}[^\\\/]+[\\\/][^\\\/]+)?[\\\/]*/;
+} else {
+  var splitRootRe = /^[\/]*/;
+}
 
 fs.realpathSync = function realpathSync(p, cache) {
   // make p is absolute
@@ -984,13 +986,30 @@ fs.realpathSync = function realpathSync(p, cache) {
       knownHard = {};
 
   // current character position in p
-  var pos = 0;
+  var pos;
   // the partial path so far, including a trailing slash if any
-  var current = '';
-  // the partial path without a trailing slash
-  var base = '';
+  var current;
+  // the partial path without a trailing slash (except when pointing at a root)
+  var base;
   // the partial path scanned in the previous round, with slash
-  var previous = '';
+  var previous;
+
+  start();
+
+  function start() {
+    // Skip over roots
+    var m = splitRootRe.exec(p);
+    pos = m[0].length;
+    current = m[0];
+    base = m[0];
+    previous = '';
+
+    // On windows, check that the root exists. On unix there is no need.
+    if (isWindows && !knownHard[base]) {
+      fs.lstatSync(base);
+      knownHard[base] = true;
+    }
+  }
 
   // walk down the path, swapping out linked pathparts for their real
   // values
@@ -1004,16 +1023,8 @@ fs.realpathSync = function realpathSync(p, cache) {
     base = previous + result[1];
     pos = nextPartRe.lastIndex;
 
-    // continue if not a symlink, or if root
-    var isRoot = !base;
-    if (isWindows) {
-      // if it doens't have a tail, then it's the root.
-      var split = base.match(splitDeviceRe);
-      if (split) {
-        isRoot = !split[2];
-      }
-    }
-    if (isRoot || knownHard[base] || (cache && cache[base] === base)) {
+    // continue if not a symlink
+    if (knownHard[base] || (cache && cache[base] === base)) {
       continue;
     }
 
@@ -1050,8 +1061,7 @@ fs.realpathSync = function realpathSync(p, cache) {
 
     // resolve the link, then start over
     p = pathModule.resolve(resolvedLink, p.slice(pos));
-    pos = 0;
-    previous = base = current = '';
+    start();
   }
 
   if (cache) cache[original] = p;
@@ -1078,17 +1088,38 @@ fs.realpath = function realpath(p, cache, cb) {
       knownHard = {};
 
   // current character position in p
-  var pos = 0;
+  var pos;
   // the partial path so far, including a trailing slash if any
-  var current = '';
-  // the partial path without a trailing slash
-  var base = '';
+  var current;
+  // the partial path without a trailing slash (except when pointing at a root)
+  var base;
   // the partial path scanned in the previous round, with slash
-  var previous = '';
+  var previous;
+
+  start();
+
+  function start() {
+    // Skip over roots
+    var m = splitRootRe.exec(p);
+    pos = m[0].length;
+    current = m[0];
+    base = m[0];
+    previous = '';
+
+    // On windows, check that the root exists. On unix there is no need.
+    if (isWindows && !knownHard[base]) {
+      fs.lstat(base, function (err) {
+        if (err) return cb(err);
+        knownHard[base] = true;
+        LOOP();
+      });
+    } else {
+      process.nextTick(LOOP);
+    }
+  }
 
   // walk down the path, swapping out linked pathparts for their real
   // values
-  return process.nextTick(LOOP);
   function LOOP() {
     // stop if scanned past end of path
     if (pos >= p.length) {
@@ -1104,16 +1135,8 @@ fs.realpath = function realpath(p, cache, cb) {
     base = previous + result[1];
     pos = nextPartRe.lastIndex;
 
-    // continue if not a symlink, or if root
-    var isRoot = !base;
-    if (isWindows) {
-      // if it doens't have a tail, then it's the root.
-      var split = base.match(splitDeviceRe);
-      if (split) {
-        isRoot = !split[2];
-      }
-    }
-    if (isRoot || knownHard[base] || (cache && cache[base] === base)) {
+    // continue if not a symlink
+    if (knownHard[base] || (cache && cache[base] === base)) {
       return process.nextTick(LOOP);
     }
 
@@ -1163,13 +1186,9 @@ fs.realpath = function realpath(p, cache, cb) {
   }
 
   function gotResolvedLink(resolvedLink) {
-
     // resolve the link, then start over
     p = pathModule.resolve(resolvedLink, p.slice(pos));
-    pos = 0;
-    previous = base = current = '';
-
-    return process.nextTick(LOOP);
+    start();
   }
 };
 
diff --git a/test/simple/test-regress-GH-3542.js b/test/simple/test-regress-GH-3542.js
new file mode 100644
index 00000000000..90e0b78501a
--- /dev/null
+++ b/test/simple/test-regress-GH-3542.js
@@ -0,0 +1,54 @@
+// Copyright Joyent, Inc. and other Node contributors.
+//
+// Permission is hereby granted, free of charge, to any person obtaining a
+// copy of this software and associated documentation files (the
+// "Software"), to deal in the Software without restriction, including
+// without limitation the rights to use, copy, modify, merge, publish,
+// distribute, sublicense, and/or sell copies of the Software, and to permit
+// persons to whom the Software is furnished to do so, subject to the
+// following conditions:
+//
+// The above copyright notice and this permission notice shall be included
+// in all copies or substantial portions of the Software.
+//
+// THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS
+// OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF
+// MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN
+// NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM,
+// DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR
+// OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE
+// USE OR OTHER DEALINGS IN THE SOFTWARE.
+
+// This test is only relevant on Windows.
+if (process.platform !== 'win32') {
+  return process.exit(0);
+}
+
+var common = require('../common.js'),
+    assert = require('assert'),
+    fs = require('fs'),
+    path = require('path'),
+    succeeded = 0;
+
+function test(p) {
+  var result = fs.realpathSync(p);
+  assert.strictEqual(result, path.resolve(p));
+
+  fs.realpath(p, function(err, result) {
+    assert.ok(!err);
+    assert.strictEqual(result, path.resolve(p));
+    succeeded++;
+  });
+}
+
+test('//localhost/c$/windows/system32');
+test('//localhost/c$/windows');
+test('//localhost/c$/')
+test('\\\\localhost\\c$')
+test('c:\\');
+test('c:');
+test(process.env.windir);
+
+process.on('exit', function() {
+  assert.strictEqual(succeeded, 7);
+});
\ No newline at end of file