diff --git a/MODULE.bazel.lock b/MODULE.bazel.lock
index 81efe96..ef2cebb 100644
--- a/MODULE.bazel.lock
+++ b/MODULE.bazel.lock
@@ -235,11 +235,8 @@
     "https://bcr.bazel.build/modules/xz/5.4.5.bcr.7/source.json": "8f42ea24ea4bf0d34e9fca53ee39de4fd4aeb93459a777600975ba18857fd2a9",
     "https://bcr.bazel.build/modules/yq.bzl/0.1.1/MODULE.bazel": "9039681f9bcb8958ee2c87ffc74bdafba9f4369096a2b5634b88abc0eaefa072",
     "https://bcr.bazel.build/modules/yq.bzl/0.1.1/source.json": "2d2bad780a9f2b9195a4a370314d2c17ae95eaa745cefc2e12fbc49759b15aa3",
-    "https://bcr.bazel.build/modules/zlib/1.2.11/MODULE.bazel": "07b389abc85fdbca459b69e2ec656ae5622873af3f845e1c9d80fe179f3effa0",
-    "https://bcr.bazel.build/modules/zlib/1.3.1.bcr.3/MODULE.bazel": "af322bc08976524477c79d1e45e241b6efbeb918c497e8840b8ab116802dda79",
-    "https://bcr.bazel.build/modules/zlib/1.3.1.bcr.5/MODULE.bazel": "eec517b5bbe5492629466e11dae908d043364302283de25581e3eb944326c4ca",
-    "https://bcr.bazel.build/modules/zlib/1.3.1.bcr.5/source.json": "22bc55c47af97246cfc093d0acf683a7869377de362b5d1c552c2c2e16b7a806",
-    "https://bcr.bazel.build/modules/zlib/1.3.1/MODULE.bazel": "751c9940dcfe869f5f7274e1295422a34623555916eb98c174c1e945594bf198",
+    "https://bcr.bazel.build/modules/zlib/1.3.1.bcr.8/MODULE.bazel": "772c674bb78a0342b8caf32ab5c25085c493ca4ff08398208dcbe4375fe9f776",
+    "https://bcr.bazel.build/modules/zlib/1.3.1.bcr.8/source.json": "cf377d76800dfc3d3b71e9dd4a8c53a62837cbce37cc4f25e6207b15fc1e8f2b",
     "https://bcr.bazel.build/modules/zstd/1.5.7.bcr.1/MODULE.bazel": "c5977176dd8555be7a9d598512ae0cae11831259c06f00a5e5e0037d5db4e3f5",
     "https://bcr.bazel.build/modules/zstd/1.5.7.bcr.1/source.json": "aa95e0b5aac9d80195b9047d223beaf26b1948be55d49f0e803e180e9ccc6e75"
   },
diff --git a/pkgutil.c b/pkgutil.c
index 74026c3..ec8d5f3 100644
--- a/pkgutil.c
+++ b/pkgutil.c
@@ -77,6 +77,8 @@ static void usage(FILE *out) {
 
 static char *strip_components_path(const char *path, int strip);
 static int apply_strip_components(struct archive_entry *e, int strip);
+static int path_component_count(const char *path);
+static char *normalize_rel_path(const char *path);
 static int match_excluded_with_prefix(struct archive *match,
                                       struct archive_entry *e,
                                       const char *prefix);
@@ -302,23 +304,31 @@ static void extract_nested_archive_from_stream(struct astream *in,
       fail_archive(a, "read nested header");
     }
 
+    const char *p = archive_entry_pathname(e);
+    char *rel = normalize_rel_path(p);
+    archive_entry_set_pathname(e, rel);
+
     if (match != NULL) {
       r = match_excluded_with_prefix(match, e, prefix);
       if (r != 0) {
         archive_read_data_skip(a);
+        free(rel);
         continue;
       }
     }
 
     if (apply_strip_components(e, strip_components)) {
       archive_read_data_skip(a);
+      free(rel);
       continue;
     }
 
     r = archive_read_extract2(a, e, disk);
     if (r != ARCHIVE_OK) {
+      free(rel);
       fail_archive(a, "extract nested entry");
     }
+    free(rel);
   }
 
   archive_write_free(disk);
@@ -418,6 +428,34 @@ static int apply_strip_components(struct archive_entry *e, int strip) {
   return (0);
 }
 
+static int path_component_count(const char *path) {
+  int count = 0;
+  int in_component = 0;
+
+  if (path == NULL) {
+    return (0);
+  }
+
+  for (const char *p = path; *p != '\0'; p++) {
+    switch (*p) {
+    case '/':
+#if defined(_WIN32) && !defined(__CYGWIN__)
+    case '\\':
+#endif
+      in_component = 0;
+      break;
+    default:
+      if (!in_component) {
+        count++;
+        in_component = 1;
+      }
+      break;
+    }
+  }
+
+  return (count);
+}
+
 static int match_excluded_with_prefix(struct archive *match,
                                       struct archive_entry *e,
                                       const char *prefix) {
@@ -682,19 +720,24 @@ int main(int argc, char **argv) {
       }
     }
     int is_nested = should_be_treated_as_nested_archive(rel);
-    if (apply_strip_components(e, strip_components)) {
-      archive_read_data_skip(xar);
-      free(rel);
-      continue;
-    }
-    free(rel);
-    rel = strdup(archive_entry_pathname(e));
-    if (rel == NULL) {
-      fail_errno("strdup");
-    }
-
     if (do_expand_full && is_nested) {
-      mkdirs_for_path(rel);
+      char *nested_outdir = strip_components_path(rel, strip_components);
+      int nested_strip = strip_components;
+      int rel_components = path_component_count(rel);
+
+      if (nested_outdir == NULL) {
+        nested_outdir = strdup(".");
+        if (nested_outdir == NULL) {
+          fail_errno("strdup");
+        }
+      }
+      if (nested_strip > rel_components) {
+        nested_strip -= rel_components;
+      } else {
+        nested_strip = 0;
+      }
+
+      mkdirs_for_path(nested_outdir);
 
       {
         struct astream in = {
@@ -706,11 +749,17 @@ int main(int argc, char **argv) {
             .eof = 0,
         };
 
-        extract_nested_archive_from_stream(&in, rel, flags, match,
-                                           strip_components, rel);
+        extract_nested_archive_from_stream(&in, nested_outdir, flags, match,
+                                           nested_strip, rel);
       }
+      free(nested_outdir);
       free(rel);
     } else {
+      if (apply_strip_components(e, strip_components)) {
+        archive_read_data_skip(xar);
+        free(rel);
+        continue;
+      }
       r = archive_read_extract2(xar, e, disk);
       if (r != ARCHIVE_OK) {
         free(rel);
diff --git a/tests/BUILD.bazel b/tests/BUILD.bazel
index 6902fbe..85cc5e4 100644
--- a/tests/BUILD.bazel
+++ b/tests/BUILD.bazel
@@ -44,6 +44,26 @@ run_binary(
     tags = ["manual"],
 )
 
+run_binary(
+    name = "pkgutil_component_expand_full_strip_6_action",
+    tool = "//:pkgutil",
+    srcs = [
+        "@component_pkg//file",
+    ],
+    args = [
+        "--exclude",
+        "Payload/Library/Developer/CommandLineTools/SDKs/MacOSX15.5.sdk/System/Library/Frameworks/Ruby.framework/Versions/2.6/Headers/ruby/ruby",
+        "--expand-full",
+        "--strip-components",
+        "6",
+        "$(location @component_pkg//file)",
+        "$@",
+    ],
+    out_dirs = ["pkgutil-component-expand-full-strip-6"],
+    testonly = True,
+    tags = ["manual"],
+)
+
 run_binary(
     name = "pkgutil_product_expand_action",
     tool = "//:pkgutil",
@@ -136,6 +156,19 @@ exec_test(
     ],
 )
 
+exec_test(
+    native_test,
+    name = "pkgutil_component_expand_full_strip_6_test",
+    src = ":test",
+    args = [
+        "-e",
+        "$(location :pkgutil_component_expand_full_strip_6_action)/usr/bin/cups-config",
+    ],
+    data = [
+        ":pkgutil_component_expand_full_strip_6_action",
+    ],
+)
+
 exec_test(
     native_test,
     name = "pkgutil_product_expand_test",