diff --git a/internal/smartlink/smartlink.go b/internal/smartlink/smartlink.go
index feb5134fa5..c101abde5e 100644
--- a/internal/smartlink/smartlink.go
+++ b/internal/smartlink/smartlink.go
@@ -40,6 +40,8 @@ func LinkContents(src, dest string) error {
 // Link creates a link from src to target. MS decided to support Symlinks but only if you opt into developer mode (go figure),
 // which we cannot reasonably force on our users. So on Windows we will instead create dirs and hardlinks.
 func Link(src, dest string) error {
+	originalSrc := src
+
 	var err error
 	src, dest, err = resolvePaths(src, dest)
 	if err != nil {
@@ -47,6 +49,16 @@ func Link(src, dest string) error {
 	}
 
 	if fileutils.IsDir(src) {
+		if fileutils.IsSymlink(originalSrc) {
+			// If the original src is a symlink, the resolved src is no longer a symlink and could point
+			// to a parent directory, resulting in a recursive directory structure.
+			// Avoid any potential problems by simply linking the original link to the target.
+			// Links to directories are okay on Linux and macOS, but will fail on Windows.
+			// If we ever get here on Windows, the artifact being deployed is bad and there's nothing we
+			// can do about it except receive the report from Rollbar and report it internally.
+			return linkFile(originalSrc, dest)
+		}
+
 		if err := fileutils.Mkdir(dest); err != nil {
 			return errs.Wrap(err, "could not create directory %s", dest)
 		}
diff --git a/internal/smartlink/smartlink_lin_mac.go b/internal/smartlink/smartlink_lin_mac.go
index b19f45d411..edc065f280 100644
--- a/internal/smartlink/smartlink_lin_mac.go
+++ b/internal/smartlink/smartlink_lin_mac.go
@@ -5,16 +5,10 @@ package smartlink
 
 import (
 	"os"
-
-	"github.com/ActiveState/cli/internal/errs"
-	"github.com/ActiveState/cli/internal/fileutils"
 )
 
 // file will create a symlink from src to dest, and falls back on a hardlink if no symlink is available.
 // This is a workaround for the fact that Windows does not support symlinks without admin privileges.
 func linkFile(src, dest string) error {
-	if fileutils.IsDir(src) {
-		return errs.New("src is a directory, not a file: %s", src)
-	}
 	return os.Symlink(src, dest)
 }
diff --git a/internal/smartlink/smartlink_test.go b/internal/smartlink/smartlink_test.go
new file mode 100644
index 0000000000..50a772254f
--- /dev/null
+++ b/internal/smartlink/smartlink_test.go
@@ -0,0 +1,75 @@
+package smartlink
+
+import (
+	"os"
+	"path/filepath"
+	"runtime"
+	"testing"
+
+	"github.com/ActiveState/cli/internal/fileutils"
+	"github.com/stretchr/testify/require"
+)
+
+func TestLinkContentsWithCircularLink(t *testing.T) {
+	srcDir, err := os.MkdirTemp("", "src")
+	require.NoError(t, err)
+	defer os.RemoveAll(srcDir)
+
+	destDir, err := os.MkdirTemp("", "dest")
+	require.NoError(t, err)
+	defer os.RemoveAll(destDir)
+
+	// Create test file structure:
+	// src/
+	//   ├── regular.txt
+	//   └── subdir/
+	//        ├── circle -> subdir (circular link)
+	//        └── subfile.txt
+
+	testFile := filepath.Join(srcDir, "regular.txt")
+	err = os.WriteFile(testFile, []byte("test content"), 0644)
+	require.NoError(t, err)
+
+	subDir := filepath.Join(srcDir, "subdir")
+	err = os.Mkdir(subDir, 0755)
+	require.NoError(t, err)
+
+	subFile := filepath.Join(subDir, "subfile.txt")
+	err = os.WriteFile(subFile, []byte("sub content"), 0644)
+	require.NoError(t, err)
+
+	circularLink := filepath.Join(subDir, "circle")
+	err = os.Symlink(subDir, circularLink)
+	require.NoError(t, err)
+
+	err = LinkContents(srcDir, destDir)
+	if runtime.GOOS == "windows" {
+		require.Error(t, err)
+		return // hard links to directories are not allowed on Windows
+	}
+	require.NoError(t, err)
+
+	// Verify file structure.
+	destFile := filepath.Join(destDir, "regular.txt")
+	require.FileExists(t, destFile)
+	content, err := os.ReadFile(destFile)
+	require.NoError(t, err)
+	require.Equal(t, "test content", string(content))
+
+	destSubFile := filepath.Join(destDir, "subdir", "subfile.txt")
+	require.FileExists(t, destSubFile)
+	subContent, err := os.ReadFile(destSubFile)
+	require.NoError(t, err)
+	require.Equal(t, "sub content", string(subContent))
+
+	destCircular := filepath.Join(destDir, "subdir", "circle")
+	require.FileExists(t, destCircular)
+	target, err := fileutils.ResolveUniquePath(destCircular)
+	require.NoError(t, err)
+	srcCircular := filepath.Join(srcDir, "subdir")
+	if runtime.GOOS == "darwin" {
+		srcCircular, err = fileutils.ResolveUniquePath(srcCircular) // needed for full $TMPDIR resolution
+		require.NoError(t, err)
+	}
+	require.Equal(t, target, srcCircular)
+}