diff --git a/src/libstore/build/local-derivation-goal.cc b/src/libstore/build/local-derivation-goal.cc
index b7a27490c..3bc88ee86 100644
--- a/src/libstore/build/local-derivation-goal.cc
+++ b/src/libstore/build/local-derivation-goal.cc
@@ -386,8 +386,9 @@ void LocalDerivationGoal::cleanupPostOutputsRegisteredModeNonCheck()
 
 
 #if __linux__
-static void linkOrCopy(const Path & from, const Path & to)
+static void linkOrCopy(LocalFSStore & store, const StorePath & from_, const Path & to)
 {
+    auto from = store.toRealPathForHardLink(from_);
     if (link(from.c_str(), to.c_str()) == -1) {
         /* Hard-linking fails if we exceed the maximum link count on a
            file (e.g. 32000 of ext3), which is quite possible after a
@@ -712,7 +713,7 @@ void LocalDerivationGoal::startBuilder()
             if (S_ISDIR(lstat(r).st_mode))
                 dirsInChroot.insert_or_assign(p, r);
             else
-                linkOrCopy(r, chrootRootDir + p);
+                linkOrCopy(getLocalStore(), i, chrootRootDir + p);
         }
 
         /* If we're repairing, checking or rebuilding part of a
@@ -1574,7 +1575,7 @@ void LocalDerivationGoal::addDependency(const StorePath & path)
                     throw Error("could not add path '%s' to sandbox", worker.store.printStorePath(path));
 
             } else
-                linkOrCopy(source, target);
+                linkOrCopy(getLocalStore(), path, target);
 
         #else
             throw Error("don't know how to make path '%s' (produced by a recursive Nix call) appear in the sandbox",
diff --git a/src/libstore/local-fs-store.hh b/src/libstore/local-fs-store.hh
index 488109501..19858f5c8 100644
--- a/src/libstore/local-fs-store.hh
+++ b/src/libstore/local-fs-store.hh
@@ -73,6 +73,16 @@ public:
         return getRealStoreDir() + "/" + std::string(storePath, storeDir.size() + 1);
     }
 
+    /**
+     * If the real path is hardlinked with something else, we might
+     * prefer to refer to the other path instead. This is the case with
+     * overlayfs, for example.
+     */
+    virtual Path toRealPathForHardLink(const StorePath & storePath)
+    {
+        return Store::toRealPath(storePath);
+    }
+
     std::optional<std::string> getBuildLogExact(const StorePath & path) override;
 
 };
diff --git a/src/libstore/local-overlay-store.cc b/src/libstore/local-overlay-store.cc
index 700a5227b..47d09dc75 100644
--- a/src/libstore/local-overlay-store.cc
+++ b/src/libstore/local-overlay-store.cc
@@ -209,6 +209,13 @@ void LocalOverlayStore::optimiseStore()
     }
 }
 
+Path LocalOverlayStore::toRealPathForHardLink(const StorePath & path)
+{
+    return lowerStore->isValidPath(path)
+        ? lowerStore->Store::toRealPath(path)
+        : Store::toRealPath(path);
+}
+
 static RegisterStoreImplementation<LocalOverlayStore, LocalOverlayStoreConfig> regLocalOverlayStore;
 
 }
diff --git a/src/libstore/local-overlay-store.hh b/src/libstore/local-overlay-store.hh
index 349d9e6ed..64e2ef488 100644
--- a/src/libstore/local-overlay-store.hh
+++ b/src/libstore/local-overlay-store.hh
@@ -114,6 +114,8 @@ private:
     void deleteGCPath(const Path & path, uint64_t & bytesFreed) override;
 
     void optimiseStore() override;
+
+    Path toRealPathForHardLink(const StorePath & storePath) override;
 };
 
 }