diff --git a/internal/smartlink/smartlink.go b/internal/smartlink/smartlink.go
index feb5134fa5..49fbe2d01d 100644
--- a/internal/smartlink/smartlink.go
+++ b/internal/smartlink/smartlink.go
@@ -10,7 +10,7 @@ import (
 )
 
 // LinkContents will link the contents of src to desc
-func LinkContents(src, dest string) error {
+func LinkContents(src, dest string, visited map[string]bool) error {
 	if !fileutils.DirExists(src) {
 		return errs.New("src dir does not exist: %s", src)
 	}
@@ -24,12 +24,23 @@ func LinkContents(src, dest string) error {
 		return errs.Wrap(err, "Could not resolve src and dest paths")
 	}
 
+	if visited == nil {
+		visited = make(map[string]bool)
+	}
+	if _, exists := visited[src]; exists {
+		// We've encountered a recursive link. This is most often the case when the resolved src has
+		// already been visited. In that case, just link the dest to the src (which may be a directory;
+		// this is fine).
+		return linkFile(src, dest)
+	}
+	visited[src] = true
+
 	entries, err := os.ReadDir(src)
 	if err != nil {
 		return errs.Wrap(err, "Reading dir %s failed", src)
 	}
 	for _, entry := range entries {
-		if err := Link(filepath.Join(src, entry.Name()), filepath.Join(dest, entry.Name())); err != nil {
+		if err := Link(filepath.Join(src, entry.Name()), filepath.Join(dest, entry.Name()), visited); err != nil {
 			return errs.Wrap(err, "Link failed")
 		}
 	}
@@ -39,13 +50,24 @@ 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 {
+func Link(src, dest string, visited map[string]bool) error {
 	var err error
 	src, dest, err = resolvePaths(src, dest)
 	if err != nil {
 		return errs.Wrap(err, "Could not resolve src and dest paths")
 	}
 
+	if visited == nil {
+		visited = make(map[string]bool)
+	}
+	if _, exists := visited[src]; exists {
+		// We've encountered a recursive link. This is most often the case when the resolved src has
+		// already been visited. In that case, just link the dest to the src (which may be a directory;
+		// this is fine).
+		return linkFile(src, dest)
+	}
+	visited[src] = true
+
 	if fileutils.IsDir(src) {
 		if err := fileutils.Mkdir(dest); err != nil {
 			return errs.Wrap(err, "could not create directory %s", dest)
@@ -55,7 +77,7 @@ func Link(src, dest string) error {
 			return errs.Wrap(err, "could not read directory %s", src)
 		}
 		for _, entry := range entries {
-			if err := Link(filepath.Join(src, entry.Name()), filepath.Join(dest, entry.Name())); err != nil {
+			if err := Link(filepath.Join(src, entry.Name()), filepath.Join(dest, entry.Name()), visited); err != nil {
 				return errs.Wrap(err, "sub link failed")
 			}
 		}
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..5b52fbb0d3
--- /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, nil)
+	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)
+}
diff --git a/pkg/runtime/depot.go b/pkg/runtime/depot.go
index 610418e952..c53a1ac1e6 100644
--- a/pkg/runtime/depot.go
+++ b/pkg/runtime/depot.go
@@ -177,7 +177,7 @@ func (d *depot) DeployViaLink(id strfmt.UUID, relativeSrc, absoluteDest string)
 	}
 
 	// Copy or link the artifact files, depending on whether the artifact in question relies on file transformations
-	if err := smartlink.LinkContents(absoluteSrc, absoluteDest); err != nil {
+	if err := smartlink.LinkContents(absoluteSrc, absoluteDest, nil); err != nil {
 		return errs.Wrap(err, "failed to link artifact")
 	}
 
@@ -295,7 +295,7 @@ func (d *depot) Undeploy(id strfmt.UUID, relativeSrc, path string) error {
 	for sharedFile, relinkSrc := range redeploys {
 		switch deploy.Type {
 		case deploymentTypeLink:
-			if err := smartlink.Link(relinkSrc, sharedFile); err != nil {
+			if err := smartlink.Link(relinkSrc, sharedFile, nil); err != nil {
 				return errs.Wrap(err, "failed to relink file")
 			}
 		case deploymentTypeCopy:
diff --git a/pkg/runtime/links_windows.go b/pkg/runtime/links_windows.go
index 0bdbbe79e8..907882a66f 100644
--- a/pkg/runtime/links_windows.go
+++ b/pkg/runtime/links_windows.go
@@ -43,7 +43,7 @@ func supportsHardLinks(path string) (supported bool) {
 	}
 
 	logging.Debug("Attempting to link '%s' to '%s'", lnk, target)
-	err = smartlink.Link(target, lnk)
+	err = smartlink.Link(target, lnk, nil)
 	if err != nil {
 		logging.Debug("Test link creation failed: %v", err)
 		return false