diff --git a/documentation/wiki/ChangeWaves.md b/documentation/wiki/ChangeWaves.md
index a6fd5b23f0f..0503718715a 100644
--- a/documentation/wiki/ChangeWaves.md
+++ b/documentation/wiki/ChangeWaves.md
@@ -30,6 +30,7 @@ Change wave checks around features will be removed in the release that accompani
 ## Current Rotation of Change Waves
 
 ### 18.8
+- Use the Unix logical current directory from `PWD` when resolving relative project paths, so builds under symlinked directories produce logical project full paths and related output paths. Set `MSBUILDDISABLEFEATURESFROMVERSION=18.8` to opt out.
 - [RAR task: across multiple input properties, resolve relative paths against the project directory (not the process current directory)](https://github.com/dotnet/msbuild/pull/13319)
 - [Console, parallel console, and terminal loggers print the paths of log files written by registered loggers (e.g. file logger and binary logger) as part of the end-of-build summary.](https://github.com/dotnet/msbuild/pull/13577)
 
diff --git a/src/Framework/NativeMethods.cs b/src/Framework/NativeMethods.cs
index 915cf0673e4..1fb1c20bbeb 100644
--- a/src/Framework/NativeMethods.cs
+++ b/src/Framework/NativeMethods.cs
@@ -1325,6 +1325,49 @@ internal static void RestoreConsoleMode(uint? originalConsoleMode, bool useStand
     [DllImport("libc", SetLastError = true)]
     internal static extern int symlink(string oldpath, string newpath);
 
+    [DllImport("libc", EntryPoint = "realpath", SetLastError = true)]
+    private static extern IntPtr realpath_native(string path, IntPtr resolved);
+
+    [DllImport("libc", EntryPoint = "free")]
+    private static extern void libc_free(IntPtr ptr);
+
+    /// <summary>
+    /// Resolves <paramref name="path"/> to its canonical form via POSIX <c>realpath(3)</c>, following
+    /// symlinks. Returns <c>null</c> on Windows, on null/empty input, or when the call fails.
+    /// Unlike <see cref="System.IO.Path.GetFullPath(string)"/>, this resolves symlinks against the real
+    /// filesystem without mutating process-global state, so it is safe to call from any thread.
+    /// </summary>
+    internal static string RealPath(string path)
+    {
+        if (IsWindows || string.IsNullOrEmpty(path))
+        {
+            return null;
+        }
+
+        IntPtr ptr = IntPtr.Zero;
+        try
+        {
+            ptr = realpath_native(path, IntPtr.Zero);
+            if (ptr == IntPtr.Zero)
+            {
+                return null;
+            }
+#if NET
+            return Marshal.PtrToStringUTF8(ptr);
+#else
+            return Marshal.PtrToStringAnsi(ptr);
+#endif
+        }
+        finally
+        {
+            if (ptr != IntPtr.Zero)
+            {
+                // realpath() with NULL second arg returns a malloc()'d buffer; caller must free().
+                libc_free(ptr);
+            }
+        }
+    }
+
 #if FEATURE_WINDOWSINTEROP
     [SupportedOSPlatform("windows6.1")]
     internal static unsafe bool SetThreadErrorMode(int newMode, out int oldMode)
diff --git a/src/MSBuild.UnitTests/XMake_Tests.cs b/src/MSBuild.UnitTests/XMake_Tests.cs
index 7a12d44ea2c..31f32f7f968 100644
--- a/src/MSBuild.UnitTests/XMake_Tests.cs
+++ b/src/MSBuild.UnitTests/XMake_Tests.cs
@@ -1362,6 +1362,34 @@ public void ResponseFileInProjectDirectoryFoundImplicitly()
             output.ShouldContain("[A=1]");
         }
 
+        [UnixOnlyFact]
+        public void ResponseFileInLogicalProjectDirectoryFoundImplicitly()
+        {
+            string root = _env.CreateFolder().Path;
+            string realDirectory = Path.Combine(root, "repo", "project");
+            string logicalParentDirectory = Path.Combine(root, "links");
+            string linkDirectory = Path.Combine(logicalParentDirectory, "project");
+            Directory.CreateDirectory(realDirectory);
+            Directory.CreateDirectory(logicalParentDirectory);
+
+            string errorMessage = null;
+            NativeMethodsShared.MakeSymbolicLink(linkDirectory, realDirectory, ref errorMessage).ShouldBeTrue(errorMessage);
+
+            string content = ObjectModelHelpers.CleanupFileContents("<Project ToolsVersion='msbuilddefaulttoolsversion' xmlns='msbuildnamespace'><Target Name='t'><Warning Text='[A=$(A)]'/></Target></Project>");
+            File.WriteAllText(Path.Combine(realDirectory, "my.proj"), content);
+            File.WriteAllText(Path.Combine(root, "repo", "Directory.Build.rsp"), "/p:A=physical");
+            File.WriteAllText(Path.Combine(logicalParentDirectory, "Directory.Build.rsp"), "/p:A=logical");
+
+            _env.SetCurrentDirectory(linkDirectory);
+            _env.SetEnvironmentVariable("PWD", linkDirectory);
+
+            string output = RunnerUtilities.ExecMSBuild("my.proj", out var successfulExit, _output);
+            successfulExit.ShouldBeTrue();
+
+            output.ShouldContain("[A=logical]");
+            output.ShouldNotContain("[A=physical]");
+        }
+
         [Fact]
         public void ResponseFileSwitchesAppearInCommandLine()
         {
@@ -1915,6 +1943,48 @@ public void TestProcessProjectSwitchReplicateBuildingDFLKG()
             MSBuildApp.ProcessProjectSwitch(Array.Empty<string>(), extensionsToIgnore, projectHelper.GetFiles).ShouldBe("test.proj"); // "Expected test.proj to be only project found"
         }
 
+        [UnixOnlyFact]
+        public void ResolveProjectPathAgainstLogicalCurrentDirectoryPreservesSymlinkFromPwd()
+        {
+            string root = _env.CreateFolder().Path;
+            string realDirectory = Path.Combine(root, "real");
+            string linkDirectory = Path.Combine(root, "link");
+            Directory.CreateDirectory(realDirectory);
+
+            string errorMessage = null;
+            NativeMethodsShared.MakeSymbolicLink(linkDirectory, realDirectory, ref errorMessage).ShouldBeTrue(errorMessage);
+
+            _env.SetCurrentDirectory(linkDirectory);
+            _env.SetEnvironmentVariable("PWD", linkDirectory);
+
+            string relativeProjectPath = Path.Combine("MyApp", "MyApp.csproj");
+
+            MSBuildApp.ResolveProjectPathAgainstLogicalCurrentDirectory(relativeProjectPath)
+                .ShouldBe(Path.Combine(linkDirectory, relativeProjectPath));
+        }
+
+        [UnixOnlyFact]
+        public void ResolveProjectPathAgainstLogicalCurrentDirectoryCanBeDisabledByChangeWave()
+        {
+            string root = _env.CreateFolder().Path;
+            string realDirectory = Path.Combine(root, "real");
+            string linkDirectory = Path.Combine(root, "link");
+            Directory.CreateDirectory(realDirectory);
+
+            string errorMessage = null;
+            NativeMethodsShared.MakeSymbolicLink(linkDirectory, realDirectory, ref errorMessage).ShouldBeTrue(errorMessage);
+
+            _env.SetCurrentDirectory(linkDirectory);
+            _env.SetEnvironmentVariable("PWD", linkDirectory);
+            _env.SetEnvironmentVariable("MSBUILDDISABLEFEATURESFROMVERSION", ChangeWaves.Wave18_8.ToString());
+            ChangeWaves.ResetStateForTests();
+
+            string relativeProjectPath = Path.Combine("MyApp", "MyApp.csproj");
+
+            MSBuildApp.ResolveProjectPathAgainstLogicalCurrentDirectory(relativeProjectPath)
+                .ShouldBe(relativeProjectPath);
+        }
+
         /// <summary>
         /// Test the case where we remove all of the project extensions that exist in the directory
         /// </summary>
diff --git a/src/MSBuild/XMake.cs b/src/MSBuild/XMake.cs
index f726294145e..c6dbdb682b1 100644
--- a/src/MSBuild/XMake.cs
+++ b/src/MSBuild/XMake.cs
@@ -361,7 +361,11 @@ private static bool CanRunServerBasedOnCommandLineSwitches(string[] commandLine)
                 {
                     commandLineSwitches = CombineSwitchesRespectingPriority(switchesFromAutoResponseFile, switchesNotFromAutoResponseFile, fullCommandLine);
                 }
-                string projectFile = ProcessProjectSwitch(commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.Project], commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.IgnoreProjectExtensions], Directory.GetFiles);
+                string projectFile = ResolveProjectPathAgainstLogicalCurrentDirectory(
+                    ProcessProjectSwitch(
+                        commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.Project],
+                        commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.IgnoreProjectExtensions],
+                        Directory.GetFiles));
                 if (commandLineSwitches[CommandLineSwitches.ParameterlessSwitch.Help] ||
                     commandLineSwitches.IsParameterizedSwitchSet(CommandLineSwitches.ParameterizedSwitch.NodeMode) ||
                     commandLineSwitches[CommandLineSwitches.ParameterlessSwitch.Version] ||
@@ -2225,7 +2229,11 @@ private static bool ProcessCommandLineSwitches(
                                                            commandLine);
                     }
 
-                    projectFile = ProcessProjectSwitch(commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.Project], commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.IgnoreProjectExtensions], Directory.GetFiles);
+                    projectFile = ResolveProjectPathAgainstLogicalCurrentDirectory(
+                        ProcessProjectSwitch(
+                            commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.Project],
+                            commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.IgnoreProjectExtensions],
+                            Directory.GetFiles));
 
                     // figure out which targets we are building
                     targets = ProcessTargetSwitch(commandLineSwitches[CommandLineSwitches.ParameterizedSwitch.Target]);
@@ -3239,6 +3247,50 @@ internal static string ProcessProjectSwitch(
             return projectFile;
         }
 
+        /// <summary>
+        /// On Unix, rebases a relative project path onto <c>$PWD</c> when <c>$PWD</c> physically resolves
+        /// to the same directory as <see cref="Directory.GetCurrentDirectory"/>. This makes
+        /// <c>$(MSBuildProjectFullPath)</c> (and dependent output paths) stable whether the user reached
+        /// the project through a symlinked working directory or via the kernel-resolved absolute path.
+        /// </summary>
+        /// <remarks>
+        /// No-op on Windows, when <paramref name="projectFile"/> is absolute or contains <c>..</c>,
+        /// when <c>PWD</c> is unset/relative/stale, or when the change wave is disabled via
+        /// <c>MSBuildDisableFeaturesFromVersion=18.8</c>. Uses <see cref="NativeMethodsShared.RealPath"/>
+        /// (POSIX <c>realpath(3)</c>) so no process-global state is mutated; safe under MSBuild Server,
+        /// multithreaded MSBuild, and hosted scenarios.
+        /// </remarks>
+        internal static string ResolveProjectPathAgainstLogicalCurrentDirectory(string projectFile)
+        {
+            if (!ChangeWaves.AreFeaturesEnabled(ChangeWaves.Wave18_8)
+                || NativeMethodsShared.IsWindows
+                || string.IsNullOrEmpty(projectFile)
+                || Path.IsPathRooted(projectFile)
+                || projectFile.Split(Path.DirectorySeparatorChar, Path.AltDirectorySeparatorChar).Contains(".."))
+            {
+                // Bail on ".." segments: lexical normalization can escape the shared physical prefix,
+                // so the logical and physical resolutions can end up pointing at different files.
+                return projectFile;
+            }
+
+            string logicalCurrentDirectory = Environment.GetEnvironmentVariable("PWD");
+            if (string.IsNullOrEmpty(logicalCurrentDirectory) || !Path.IsPathRooted(logicalCurrentDirectory))
+            {
+                return projectFile;
+            }
+
+            // Confirm $PWD physically resolves to the same directory as getcwd(); otherwise PWD is stale.
+            string physicalPwd = NativeMethodsShared.RealPath(logicalCurrentDirectory);
+            string physicalCwd = NativeMethodsShared.RealPath(Directory.GetCurrentDirectory());
+            if (physicalPwd == null || physicalCwd == null
+                || !string.Equals(physicalPwd, physicalCwd, StringComparison.Ordinal))
+            {
+                return projectFile;
+            }
+
+            return Path.GetFullPath(Path.Combine(logicalCurrentDirectory, projectFile));
+        }
+
         private static void ValidateExtensions(string[] projectExtensionsToIgnore)
         {
             if (projectExtensionsToIgnore?.Length > 0)