diff --git a/lua/opencode/ui/completion/files.lua b/lua/opencode/ui/completion/files.lua
index 249d2868..2761da52 100644
--- a/lua/opencode/ui/completion/files.lua
+++ b/lua/opencode/ui/completion/files.lua
@@ -85,7 +85,9 @@ local function create_file_item(file, suffix, priority)
   local dir = vim.fn.fnamemodify(file, ':h')
   local file_path = dir == '.' and filename or dir .. '/' .. filename
   local detail = dir == '.' and filename or dir .. '/' .. filename
-  local full_path = vim.fn.fnamemodify(file, ':p')
+  -- Build absolute path without resolving symlinks so that files inside
+  -- symlinked directories within cwd pass the is_path_in_cwd check.
+  local full_path = file:sub(1, 1) == '/' and file or (vim.fn.getcwd() .. '/' .. file)
   local display_label = file_path
 
   local file_config = config.ui.completion.file_sources
diff --git a/lua/opencode/util.lua b/lua/opencode/util.lua
index 77c3ed44..cde1b4ee 100644
--- a/lua/opencode/util.lua
+++ b/lua/opencode/util.lua
@@ -591,9 +591,17 @@ function M.pcall_trace(fn, ...)
 end
 
 function M.is_path_in_cwd(path)
-  local cwd = vim.fn.getcwd()
-  local abs_path = vim.fn.fnamemodify(path, ':p')
-  return abs_path:sub(1, #cwd) == cwd
+  local cwd = vim.fn.simplify(vim.fn.getcwd())
+  local cwd_prefix = cwd == '/' and cwd or (cwd .. '/')
+
+  local logical_path
+  if path:sub(1, 1) == '/' then
+    logical_path = vim.fn.simplify(path)
+  else
+    logical_path = vim.fn.simplify(cwd .. '/' .. path)
+  end
+
+  return logical_path == cwd or logical_path:sub(1, #cwd_prefix) == cwd_prefix
 end
 
 --- Check if a given path is in the system temporary directory.
diff --git a/tests/unit/util_spec.lua b/tests/unit/util_spec.lua
index 42e83d22..778b5aa8 100644
--- a/tests/unit/util_spec.lua
+++ b/tests/unit/util_spec.lua
@@ -378,3 +378,49 @@ describe('util.parse_quick_context_args', function()
     end)
   end
 end)
+
+describe('util.is_path_in_cwd', function()
+  local original_getcwd
+  local test_cwd = '/tmp/test_project'
+
+  before_each(function()
+    original_getcwd = vim.fn.getcwd
+    vim.fn.getcwd = function()
+      return test_cwd
+    end
+  end)
+
+  after_each(function()
+    vim.fn.getcwd = original_getcwd
+  end)
+
+  it('accepts a relative path inside cwd', function()
+    assert.is_true(util.is_path_in_cwd('src/foo.lua'))
+  end)
+
+  it('accepts an absolute path inside cwd', function()
+    assert.is_true(util.is_path_in_cwd(test_cwd .. '/src/foo.lua'))
+  end)
+
+  it('accepts an absolute path through a symlinked directory in cwd', function()
+    assert.is_true(util.is_path_in_cwd(test_cwd .. '/linked_folder/test.txt'))
+  end)
+
+  it('rejects an absolute path outside cwd', function()
+    assert.is_false(util.is_path_in_cwd('/tmp/outside/foo.lua'))
+  end)
+
+  it('rejects a path that only shares the cwd prefix', function()
+    assert.is_false(util.is_path_in_cwd('/tmp/test_project2/src/foo.lua'))
+  end)
+
+  it('rejects a relative path that escapes cwd via ..', function()
+    assert.is_false(util.is_path_in_cwd('../outside/foo.lua'))
+  end)
+
+  it('accepts a relative path through a symlinked directory in cwd', function()
+    -- Simulate the symlink case: relative path stays logical (not resolved)
+    -- e.g. linked_folder -> /tmp/external, linked_folder/test.txt is valid
+    assert.is_true(util.is_path_in_cwd('linked_folder/test.txt'))
+  end)
+end)