diff --git a/crates/project/src/lsp_store.rs b/crates/project/src/lsp_store.rs
index d0804834ae..ead3866e7f 100644
--- a/crates/project/src/lsp_store.rs
+++ b/crates/project/src/lsp_store.rs
@@ -147,7 +147,7 @@ use util::{
     paths::{PathStyle, SanitizedPath, UrlExt},
     post_inc,
     redact::redact_command,
-    rel_path::RelPath,
+    rel_path::{RelPath, RelPathBuf},
     union_json_value_into,
 };
 
@@ -10272,15 +10272,6 @@ impl LspStore {
             let abs_path = abs_path
                 .to_file_path_ext(path_style)
                 .map_err(|()| anyhow!("can't convert URI to path"))?;
-
-            let fs = lsp_store.update(cx, |lsp_store, _cx| {
-                lsp_store.as_local().map(|local| local.fs.clone())
-            })?;
-            let abs_path = if let Some(fs) = fs {
-                fs.canonicalize(&abs_path).await.unwrap_or(abs_path)
-            } else {
-                abs_path
-            };
             let p = abs_path.clone();
             let yarn_worktree = lsp_store
                 .update(cx, move |lsp_store, cx| match lsp_store.as_local() {
@@ -10301,11 +10292,16 @@ impl LspStore {
                 } else {
                     (Arc::<Path>::from(abs_path.as_path()), None)
                 };
-            let worktree = lsp_store.update(cx, |lsp_store, cx| {
-                lsp_store.worktree_store.update(cx, |worktree_store, cx| {
-                    worktree_store.find_worktree(&worktree_root_target, cx)
-                })
-            })?;
+            let worktree = if known_relative_path.is_some() {
+                lsp_store.read_with(cx, |lsp_store, cx| {
+                    lsp_store
+                        .worktree_store
+                        .read(cx)
+                        .find_worktree(&worktree_root_target, cx)
+                })?
+            } else {
+                find_worktree_for_lsp_path(&lsp_store, &abs_path, cx).await?
+            };
             let (worktree, relative_path, source_ws) = if let Some(result) = worktree {
                 let relative_path = known_relative_path.unwrap_or_else(|| result.1.clone());
                 (result.0, relative_path, None)
@@ -14948,6 +14944,101 @@ fn lsp_ranges_overlap(a: &lsp::Range, b: &lsp::Range) -> bool {
     a.start < b.end && b.start < a.end
 }
 
+async fn find_worktree_for_lsp_path(
+    lsp_store: &WeakEntity<LspStore>,
+    abs_path: &Path,
+    cx: &mut AsyncApp,
+) -> Result<Option<(Entity<Worktree>, Arc<RelPath>)>> {
+    let (fs, worktree) = lsp_store.read_with(cx, |lsp_store, cx| {
+        (
+            lsp_store.as_local().map(|local| local.fs.clone()),
+            lsp_store
+                .worktree_store
+                .read(cx)
+                .find_worktree(abs_path, cx),
+        )
+    })?;
+    match worktree {
+        Some((worktree, relative_path)) => {
+            let relative_path =
+                normalize_lsp_relative_path(&worktree, abs_path, relative_path, cx).await?;
+            Ok(Some((worktree, relative_path)))
+        }
+        None => {
+            let Some(fs) = fs else {
+                return Ok(None);
+            };
+            let Ok(canonical_path) = fs.canonicalize(abs_path).await else {
+                return Ok(None);
+            };
+            lsp_store.read_with(cx, |lsp_store, cx| {
+                lsp_store
+                    .worktree_store
+                    .read(cx)
+                    .find_worktree(&canonical_path, cx)
+            })
+        }
+    }
+}
+
+async fn normalize_lsp_relative_path(
+    worktree: &Entity<Worktree>,
+    abs_path: &Path,
+    relative_path: Arc<RelPath>,
+    cx: &mut AsyncApp,
+) -> Result<Arc<RelPath>> {
+    let Some((fs, snapshot, worktree_root)) = worktree.read_with(cx, |worktree, _| {
+        let local_worktree = worktree.as_local()?;
+        if local_worktree.fs_is_case_sensitive() {
+            return None;
+        }
+        Some((
+            local_worktree.fs().clone(),
+            worktree.snapshot(),
+            worktree.abs_path(),
+        ))
+    }) else {
+        return Ok(relative_path);
+    };
+    if snapshot.entry_for_path(&relative_path).is_some() {
+        return Ok(relative_path);
+    }
+
+    let mut normalized_path = RelPathBuf::new();
+    let mut components = relative_path.components();
+    while let Some(component) = components.next() {
+        let mut exact_path = normalized_path.clone();
+        exact_path.push_component(component)?;
+        if snapshot.entry_for_path(&exact_path).is_some() {
+            normalized_path = exact_path;
+            continue;
+        }
+        let case_insensitive_match = snapshot
+            .child_entries(&normalized_path)
+            .find(|entry| {
+                entry
+                    .path
+                    .file_name()
+                    .is_some_and(|name| name.eq_ignore_ascii_case(component))
+            })
+            .map(|entry| entry.path.to_rel_path_buf());
+        let Some(matched_path) = case_insensitive_match else {
+            if let Ok(canonical_path) = fs.canonicalize(abs_path).await
+                && let Ok(canonical_root) = fs.canonicalize(&worktree_root).await
+                && let Ok(canonical_relative_path) = canonical_path.strip_prefix(&canonical_root)
+                && let Ok(canonical_relative_path) =
+                    RelPath::new(canonical_relative_path, PathStyle::local())
+            {
+                return Ok(canonical_relative_path.into_arc());
+            }
+            exact_path.push(components.rest());
+            return Ok(Arc::from(exact_path));
+        };
+        normalized_path = matched_path;
+    }
+    Ok(Arc::from(normalized_path))
+}
+
 fn subscribe_to_binary_statuses(
     languages: &Arc<LanguageRegistry>,
     cx: &mut Context<'_, LspStore>,
diff --git a/crates/project/tests/integration/lsp_store.rs b/crates/project/tests/integration/lsp_store.rs
index 2ce689b429..3db3f11211 100644
--- a/crates/project/tests/integration/lsp_store.rs
+++ b/crates/project/tests/integration/lsp_store.rs
@@ -1,15 +1,15 @@
 use std::{
-    path::Path,
+    path::{Path, PathBuf},
     sync::Arc,
     time::{Duration, Instant},
 };
 
 use collections::HashMap;
-use fs::FakeFs;
+use fs::{FakeFs, Fs};
 use futures::StreamExt;
-use gpui::TestAppContext;
-use language::{CodeLabel, FakeLspAdapter, HighlightId, rust_lang};
-use lsp::{LanguageServerName, Uri};
+use gpui::{Entity, TestAppContext};
+use language::{Buffer, CodeLabel, FakeLspAdapter, HighlightId, LocalFile, rust_lang};
+use lsp::{LanguageServerId, LanguageServerName, Uri};
 use parking_lot::Mutex;
 use project::{
     Project,
@@ -163,6 +163,117 @@ async fn test_open_buffer_via_lsp_case_variant_no_duplicate(cx: &mut TestAppCont
     });
 }
 
+#[gpui::test]
+async fn test_open_buffer_via_lsp_preserves_external_symlink_path(cx: &mut TestAppContext) {
+    init_test(cx);
+    cx.executor().allow_parking();
+
+    let fs = FakeFs::new(cx.executor());
+    fs.insert_tree(
+        path!("/shared"),
+        json!({ "pkg": { "def.rs": "pub fn def() {}" } }),
+    )
+    .await;
+    fs.insert_tree(
+        path!("/project"),
+        json!({ "src": { "main.rs": "fn main() {}" } }),
+    )
+    .await;
+    fs.create_symlink(
+        path!("/project/pkg").as_ref(),
+        PathBuf::from(path!("/shared/pkg")),
+    )
+    .await
+    .unwrap();
+
+    let (project, server_id) =
+        project_with_rust_server(fs, path!("/project"), path!("/project/src/main.rs"), cx).await;
+
+    let buffer = project
+        .update(cx, |project, cx| {
+            project.open_local_buffer_via_lsp(
+                Uri::from_file_path(path!("/project/pkg/def.rs")).unwrap(),
+                server_id,
+                cx,
+            )
+        })
+        .await
+        .unwrap();
+    cx.run_until_parked();
+
+    assert_eq!(
+        buffer_paths(&buffer, cx),
+        (
+            "pkg/def.rs".to_string(),
+            PathBuf::from(path!("/project/pkg/def.rs"))
+        )
+    );
+    assert_eq!(
+        worktree_roots(&project, cx),
+        vec![PathBuf::from(path!("/project"))]
+    );
+}
+
+#[gpui::test]
+async fn test_open_buffer_via_lsp_case_variant_in_unscanned_dir(cx: &mut TestAppContext) {
+    init_test(cx);
+    cx.executor().allow_parking();
+
+    let fs = FakeFs::new(cx.executor());
+    fs.set_case_sensitive(false);
+    fs.insert_tree(
+        path!("/root"),
+        json!({
+            ".gitignore": "ignored\n",
+            "src": { "main.rs": "fn main() {}" },
+            "ignored": { "lib.rs": "pub fn lib() {}" },
+        }),
+    )
+    .await;
+
+    let (project, server_id) =
+        project_with_rust_server(fs, path!("/root"), path!("/root/src/main.rs"), cx).await;
+    assert_eq!(
+        worktree_entries(&project, cx),
+        vec!["", ".gitignore", "ignored", "src", "src/main.rs"]
+    );
+
+    let buffer = project
+        .update(cx, |project, cx| {
+            project.open_local_buffer_via_lsp(
+                Uri::from_file_path(path!("/root/IGNORED/LIB.rs")).unwrap(),
+                server_id,
+                cx,
+            )
+        })
+        .await
+        .unwrap();
+    cx.run_until_parked();
+
+    assert_eq!(
+        buffer_paths(&buffer, cx),
+        (
+            "ignored/lib.rs".to_string(),
+            PathBuf::from(path!("/root/ignored/lib.rs"))
+        )
+    );
+    assert_eq!(
+        worktree_roots(&project, cx),
+        vec![PathBuf::from(path!("/root"))]
+    );
+    assert_eq!(
+        worktree_entries(&project, cx),
+        vec![
+            "",
+            ".gitignore",
+            "ignored",
+            "ignored/lib.rs",
+            "src",
+            "src/main.rs"
+        ]
+    );
+}
+
 #[test]
 fn test_rpc_log_grouping_separates_timed_messages() {
     for (received, direction) in [(false, "Send"), (true, "Receive")] {
@@ -673,3 +784,63 @@ async fn test_initialization_options_contributions_without_own_options(cx: &mut
         Some(Some(contribution)),
     );
 }
+
+async fn project_with_rust_server(
+    fs: Arc<FakeFs>,
+    root: &str,
+    first_file: &str,
+    cx: &mut TestAppContext,
+) -> (Entity<Project>, LanguageServerId) {
+    let project = Project::test(fs, [root.as_ref()], cx).await;
+    let language_registry = project.read_with(cx, |project, _| project.languages().clone());
+    language_registry.add(rust_lang());
+    let mut fake_servers = language_registry.register_fake_lsp("Rust", FakeLspAdapter::default());
+
+    project
+        .update(cx, |project, cx| {
+            project.open_local_buffer_with_lsp(first_file, cx)
+        })
+        .await
+        .unwrap();
+    fake_servers.next().await.unwrap();
+    cx.run_until_parked();
+
+    let server_id = project.read_with(cx, |project, cx| {
+        project
+            .lsp_store()
+            .read(cx)
+            .language_server_statuses()
+            .next()
+            .unwrap()
+            .0
+    });
+    (project, server_id)
+}
+
+fn buffer_paths(buffer: &Entity<Buffer>, cx: &TestAppContext) -> (String, PathBuf) {
+    buffer.read_with(cx, |buffer, cx| {
+        let file = File::from_dyn(buffer.file()).unwrap();
+        (file.path.as_unix_str().to_string(), file.abs_path(cx))
+    })
+}
+
+fn worktree_roots(project: &Entity<Project>, cx: &TestAppContext) -> Vec<PathBuf> {
+    project.read_with(cx, |project, cx| {
+        project
+            .worktrees(cx)
+            .map(|worktree| worktree.read(cx).abs_path().to_path_buf())
+            .collect()
+    })
+}
+
+fn worktree_entries(project: &Entity<Project>, cx: &TestAppContext) -> Vec<String> {
+    project.read_with(cx, |project, cx| {
+        let worktree = project.worktrees(cx).next().unwrap();
+        worktree
+            .read(cx)
+            .snapshot()
+            .entries(true, 0)
+            .map(|entry| entry.path.as_unix_str().to_string())
+            .collect()
+    })
+}