diff --git a/nvm.sh b/nvm.sh
index bb461c1e..45f9a0fa 100755
--- a/nvm.sh
+++ b/nvm.sh
@@ -552,9 +552,8 @@ else
 fi
 unset NVM_SCRIPT_SOURCE 2>/dev/null
 
-# Performs pure in-memory POSIX path containment checking without subshell process forks.
-# Uses case-guarded ${pathdir%/*} for parent-walk and exact string equality (=) to ensure literal matching
-# for directory names containing glob metacharacters (*, ?, []) across all shells including zsh.
+# Walks parent paths without subshells, comparing names literally before checking
+# filesystem identity to account for case-insensitive paths and directory symlinks.
 nvm_tree_contains_path() {
   local tree
   tree="${1-}"
@@ -577,12 +576,11 @@ nvm_tree_contains_path() {
     clean_tree='/'
   fi
 
-  # Pure in-memory POSIX parent-walk using parameter expansion instead of subshell dirname forks.
-  # Uses literal string equality [ "${pathdir}" = "${clean_tree}" ] to prevent glob expansion bugs.
+  # Keep literal matching for paths that do not exist, including glob characters.
   local pathdir
   pathdir="${node_path}"
   while [ "${pathdir}" != '' ] && [ "${pathdir}" != '.' ] && [ "${pathdir}" != '/' ] &&
-      [ "${pathdir}" != "${clean_tree}" ]; do
+      [ "${pathdir}" != "${clean_tree}" ] && ! [ "${pathdir}" -ef "${clean_tree}" ]; do
     case "${pathdir}" in
       */*)
         pathdir="${pathdir%/*}"
@@ -595,7 +593,7 @@ nvm_tree_contains_path() {
         ;;
     esac
   done
-  [ "${pathdir}" = "${clean_tree}" ]
+  [ "${pathdir}" = "${clean_tree}" ] || [ "${pathdir}" -ef "${clean_tree}" ]
 }
 
 nvm_find_project_dir() {
diff --git a/test/fast/Unit tests/nvm_tree_contains_path b/test/fast/Unit tests/nvm_tree_contains_path
index 1dec1cde..207320ee 100755
--- a/test/fast/Unit tests/nvm_tree_contains_path	
+++ b/test/fast/Unit tests/nvm_tree_contains_path	
@@ -1,6 +1,13 @@
 #!/bin/sh
 
 cleanup () {
+  rm tmp-alias
+  if [ "${CASE_SENSITIVE-}" = '1' ]; then
+    rm tmp/TREE/node
+    rmdir tmp/TREE
+  fi
+  rm tmp/tree/node
+  rmdir tmp/tree
   rm tmp/node
   rmdir tmp
   rm tmp2/node
@@ -15,6 +22,15 @@ mkdir -p tmp
 touch tmp/node
 mkdir -p tmp2
 touch tmp2/node
+mkdir -p tmp/tree
+touch tmp/tree/node
+ln -s tmp tmp-alias
+CASE_SENSITIVE=0
+if [ ! -d tmp/TREE ]; then
+  CASE_SENSITIVE=1
+  mkdir tmp/TREE
+  touch tmp/TREE/node
+fi
 
 [ "$(nvm_tree_contains_path 2>&1)" = "both the tree and the node path are required" ] || die 'incorrect error message with no args'
 [ "$(nvm_tree_contains_path > /dev/null 2>&1 ; echo $?)" = "2" ] || die 'incorrect error code with no args'
@@ -36,4 +52,18 @@ nvm_tree_contains_path / /tmp/node || die '"/" should contain "/tmp/node"'
 nvm_tree_contains_path "tmp[glob]" "tmp[glob]/node" || die '"tmp[glob]" should contain "tmp[glob]/node"'
 nvm_tree_contains_path "tmp" "tmp[glob]/node" && die '"tmp" should not contain "tmp[glob]/node"'
 
+if [ "${CASE_SENSITIVE}" = '1' ]; then
+  nvm_tree_contains_path tmp/tree tmp/TREE/node && die 'case-sensitive directories should stay distinct'
+  nvm_tree_contains_path tmp/TREE tmp/tree/node && die 'case-sensitive directories should stay distinct'
+else
+  nvm_tree_contains_path tmp/tree tmp/TREE/node || die 'case-insensitive directories should match'
+  nvm_tree_contains_path tmp/TREE tmp/tree/node || die 'case-insensitive directories should match'
+fi
+
+nvm_tree_contains_path tmp-alias tmp/node || die 'a symlink to the tree should contain its node'
+nvm_tree_contains_path tmp tmp-alias/node || die 'the tree should contain a node reached through a symlink'
+nvm_tree_contains_path tmp-alias tmp2/node && die 'a symlink should not contain a sibling tree'
+
+nvm_tree_contains_path nonexistent NONEXISTENT/node && die 'missing directories should not be case folded'
+
 cleanup