diff --git a/helix-vcs/src/git.rs b/helix-vcs/src/git.rs
index 78e582436..48220f4df 100644
--- a/helix-vcs/src/git.rs
+++ b/helix-vcs/src/git.rs
@@ -22,18 +22,24 @@
 #[cfg(test)]
 mod test;
 
+#[inline]
+fn get_repo_dir(file: &Path) -> Result<&Path> {
+    file.parent().context("file has no parent directory")
+}
+
 pub fn get_diff_base(file: &Path) -> Result<Vec<u8>> {
     debug_assert!(!file.exists() || file.is_file());
     debug_assert!(file.is_absolute());
+    let file = gix::path::realpath(file).context("resolve symlinks")?;
 
     // TODO cache repository lookup
 
-    let repo_dir = file.parent().context("file has no parent directory")?;
+    let repo_dir = get_repo_dir(&file)?;
     let repo = open_repo(repo_dir)
         .context("failed to open git repo")?
         .to_thread_local();
     let head = repo.head_commit()?;
-    let file_oid = find_file_in_commit(&repo, &head, file)?;
+    let file_oid = find_file_in_commit(&repo, &head, &file)?;
 
     let file_object = repo.find_object(file_oid)?;
     let data = file_object.detach().data;
@@ -56,7 +62,9 @@ pub fn get_diff_base(file: &Path) -> Result<Vec<u8>> {
 pub fn get_current_head_name(file: &Path) -> Result<Arc<ArcSwap<Box<str>>>> {
     debug_assert!(!file.exists() || file.is_file());
     debug_assert!(file.is_absolute());
-    let repo_dir = file.parent().context("file has no parent directory")?;
+    let file = gix::path::realpath(file).context("resolve symlinks")?;
+
+    let repo_dir = get_repo_dir(&file)?;
     let repo = open_repo(repo_dir)
         .context("failed to open git repo")?
         .to_thread_local();
diff --git a/helix-vcs/src/git/test.rs b/helix-vcs/src/git/test.rs
index 95ff10b23..164040f50 100644
--- a/helix-vcs/src/git/test.rs
+++ b/helix-vcs/src/git/test.rs
@@ -98,9 +98,13 @@ fn directory() {
     assert!(git::get_diff_base(&dir).is_err());
 }
 
-/// Test that `get_file_head` does not return content for a symlink.
-/// This is important to correctly cover cases where a symlink is removed and replaced by a file.
-/// If the contents of the symlink object were returned a diff between a path and the actual file would be produced (bad ui).
+/// Test that `get_diff_base` resolves symlinks so that the same diff base is
+/// used as the target file.
+///
+/// This is important to correctly cover cases where a symlink is removed and
+/// replaced by a file. If the contents of the symlink object were returned
+/// a diff between a literal file path and the actual file content would be
+/// produced (bad ui).
 #[cfg(any(unix, windows))]
 #[test]
 fn symlink() {
@@ -108,14 +112,41 @@ fn symlink() {
     use std::os::unix::fs::symlink;
     #[cfg(not(unix))]
     use std::os::windows::fs::symlink_file as symlink;
+
     let temp_git = empty_git_repo();
     let file = temp_git.path().join("file.txt");
-    let contents = b"foo".as_slice();
-    File::create(&file).unwrap().write_all(contents).unwrap();
+    let contents = Vec::from(b"foo");
+    File::create(&file).unwrap().write_all(&contents).unwrap();
     let file_link = temp_git.path().join("file_link.txt");
-    symlink("file.txt", &file_link).unwrap();
 
+    symlink("file.txt", &file_link).unwrap();
     create_commit(temp_git.path(), true);
-    assert!(git::get_diff_base(&file_link).is_err());
-    assert_eq!(git::get_diff_base(&file).unwrap(), Vec::from(contents));
+
+    assert_eq!(git::get_diff_base(&file_link).unwrap(), contents);
+    assert_eq!(git::get_diff_base(&file).unwrap(), contents);
+}
+
+/// Test that `get_diff_base` returns content when the file is a symlink to
+/// another file that is in a git repo, but the symlink itself is not.
+#[cfg(any(unix, windows))]
+#[test]
+fn symlink_to_git_repo() {
+    #[cfg(unix)]
+    use std::os::unix::fs::symlink;
+    #[cfg(not(unix))]
+    use std::os::windows::fs::symlink_file as symlink;
+
+    let temp_dir = tempfile::tempdir().expect("create temp dir");
+    let temp_git = empty_git_repo();
+
+    let file = temp_git.path().join("file.txt");
+    let contents = Vec::from(b"foo");
+    File::create(&file).unwrap().write_all(&contents).unwrap();
+    create_commit(temp_git.path(), true);
+
+    let file_link = temp_dir.path().join("file_link.txt");
+    symlink(&file, &file_link).unwrap();
+
+    assert_eq!(git::get_diff_base(&file_link).unwrap(), contents);
+    assert_eq!(git::get_diff_base(&file).unwrap(), contents);
 }