@@ -21,6 +21,21 @@ Specify Allowed directories when starting the server:
 mcp-server-filesystem /path/to/dir1 /path/to/dir2
 ```
 
+#### Optional Flags
+
+- `--follow-symlinks` - Allow symlinks to point to targets outside allowed directories (default: false)
+- `--symlink-depth=N` - Maximum number of symlink hops outside allowed directories before blocking (default: 1)
+
+Example with symlink following enabled:
+```bash
+mcp-server-filesystem /home/user/docs --follow-symlinks --symlink-depth=2
+```
+
+With these flags:
+- Symlinks pointing to files outside allowed directories are allowed up to the specified depth
+- Symlink chains that exceed the max depth will be blocked with a clear error message
+- This is useful when you need to access symlinks that point to external storage or shared directories
+
 ### Method 2: MCP Roots (Recommended)
 MCP clients that support [Roots](https://modelcontextprotocol.io/docs/learn/client-concepts#roots) can dynamically update the Allowed directories. 
 
 
@@ -0,0 +1,331 @@
+import { describe, it, expect, beforeEach, afterEach } from 'vitest';
+import * as path from 'path';
+import * as fs from 'fs/promises';
+import * as os from 'os';
+import { validatePath, setAllowedDirectories, setSymlinkPolicy, getSymlinkPolicy } from '../lib.js';
+import { normalizePath } from '../path-utils.js';
+
+/**
+ * Check if the current environment supports symlink creation
+ */
+async function checkSymlinkSupport(): Promise<boolean> {
+  const testDir = await fs.mkdtemp(path.join(os.tmpdir(), 'symlink-test-'));
+  try {
+    const targetFile = path.join(testDir, 'target.txt');
+    const linkFile = path.join(testDir, 'link.txt');
+    
+    await fs.writeFile(targetFile, 'test');
+    await fs.symlink(targetFile, linkFile);
+    
+    return true;
+  } catch (error) {
+    if ((error as NodeJS.ErrnoException).code === 'EPERM') {
+      return false;
+    }
+    throw error;
+  } finally {
+    await fs.rm(testDir, { recursive: true, force: true });
+  }
+}
+
+let symlinkSupported: boolean | null = null;
+
+async function getSymlinkSupport(): Promise<boolean> {
+  if (symlinkSupported === null) {
+    symlinkSupported = await checkSymlinkSupport();
+    if (!symlinkSupported) {
+      console.log('\n⚠️  Symlink tests will be skipped - symlink creation not supported in this environment');
+    }
+  }
+  return symlinkSupported;
+}
+
+/**
+ * Helper to resolve allowed directories similar to index.ts logic
+ * Handles macOS /var -> /private/var symlinks
+ */
+async function resolveAllowedDirectories(dir: string): Promise<string[]> {
+  const absolute = path.resolve(dir);
+  const normalizedOriginal = normalizePath(absolute);
+  try {
+    const resolved = await fs.realpath(absolute);
+    const normalizedResolved = normalizePath(resolved);
+    if (normalizedOriginal !== normalizedResolved) {
+      return [normalizedOriginal, normalizedResolved];
+    }
+    return [normalizedResolved];
+  } catch {
+    return [normalizedOriginal];
+  }
+}
+
+describe('Symlink Policy', () => {
+  let testDir: string;
+  let allowedDir: string;
+  let forbiddenDir: string;
+
+  beforeEach(async () => {
+    testDir = await fs.mkdtemp(path.join(os.tmpdir(), 'symlink-policy-test-'));
+    allowedDir = path.join(testDir, 'allowed');
+    forbiddenDir = path.join(testDir, 'forbidden');
+
+    await fs.mkdir(allowedDir, { recursive: true });
+    await fs.mkdir(forbiddenDir, { recursive: true });
+    
+    // Set allowed directories using helper that handles macOS symlinks
+    const resolvedAllowedDirs = await resolveAllowedDirectories(allowedDir);
+    setAllowedDirectories(resolvedAllowedDirs);
+    
+    // Reset symlink policy to default
+    setSymlinkPolicy({ follow: false, maxDepth: 1 });
+  });
+
+  afterEach(async () => {
+    await fs.rm(testDir, { recursive: true, force: true });
+  });
+
+  describe('Default behavior (followSymlinks: false)', () => {
+    it('blocks symlink pointing outside allowed directories by default', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      // Create target file outside allowed directory
+      const targetFile = path.join(forbiddenDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      // Create symlink inside allowed directory pointing to forbidden file
+      const linkPath = path.join(allowedDir, 'link.txt');
+      await fs.symlink(targetFile, linkPath);
+
+      // Default behavior should block the symlink
+      await expect(validatePath(linkPath)).rejects.toThrow(/symlink target outside allowed directories/);
+    });
+
+    it('allows symlink within allowed directories', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      // Create target file inside allowed directory
+      const targetFile = path.join(allowedDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      // Create symlink to file within allowed directory
+      const linkPath = path.join(allowedDir, 'link.txt');
+      await fs.symlink(targetFile, linkPath);
+
+      // Should pass validation (path should resolve correctly, can be /private/ version on macOS)
+      const result = await validatePath(linkPath);
+      expect(result).toBeTruthy();
+    });
+
+    it('blocks regular files outside allowed directories', async () => {
+      const outsideFile = path.join(forbiddenDir, 'file.txt');
+      await fs.writeFile(outsideFile, 'content');
+
+      // Should throw because path is outside allowed directories
+      await expect(validatePath(outsideFile)).rejects.toThrow(/path outside allowed directories/);
+    });
+  });
+
+  describe('With followSymlinks: true', () => {
+    beforeEach(() => {
+      setSymlinkPolicy({ follow: true, maxDepth: 1 });
+    });
+
+    it('allows symlink outside allowed dir with depth 1', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      const targetFile = path.join(forbiddenDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      const linkPath = path.join(allowedDir, 'link.txt');
+      await fs.symlink(targetFile, linkPath);
+
+      // Should pass with default maxDepth of 1
+      const result = await validatePath(linkPath);
+      expect(result).toBe(targetFile);
+    });
+
+    it('allows symlink pointing to file within allowed directory', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      const targetFile = path.join(allowedDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      const linkPath = path.join(allowedDir, 'link.txt');
+      await fs.symlink(targetFile, linkPath);
+
+      const result = await validatePath(linkPath);
+      expect(result).toBeTruthy();
+    });
+
+    it('blocks symlink chain exceeding max depth', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      // Set max depth to 1
+      setSymlinkPolicy({ follow: true, maxDepth: 1 });
+
+      // Create a chain: allowed/link -> forbidden/link1 -> forbidden/link2 -> target
+      const targetFile = path.join(forbiddenDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      const link1 = path.join(forbiddenDir, 'link1');
+      const link2 = path.join(forbiddenDir, 'link2');
+      const finalLink = path.join(allowedDir, 'final-link');
+
+      await fs.symlink(targetFile, link1);
+      await fs.symlink(link1, link2);
+      await fs.symlink(link2, finalLink);
+
+      // Chain has 2 hops outside allowed dirs, exceeds maxDepth of 1
+      await expect(validatePath(finalLink)).rejects.toThrow(/exceeded max depth of 1/);
+    });
+
+    it('allows symlink chain within max depth', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      // Set max depth to 3 (to account for the chain)
+      setSymlinkPolicy({ follow: true, maxDepth: 3 });
+
+      const targetFile = path.join(forbiddenDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      const link1 = path.join(forbiddenDir, 'link1');
+      const link2 = path.join(forbiddenDir, 'link2');
+      const finalLink = path.join(allowedDir, 'final-link');
+
+      await fs.symlink(targetFile, link1);
+      await fs.symlink(link1, link2);
+      await fs.symlink(link2, finalLink);
+
+      // Chain has 2 hops outside allowed dirs, within maxDepth of 3
+      const result = await validatePath(finalLink);
+      expect(result).toBeTruthy();
+    });
+
+    it('allows symlink that loops back into allowed dir after outside hop', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      // Create: allowed/link1 -> forbidden/link2 -> allowed/target
+      const targetFile = path.join(allowedDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      const outsideLink = path.join(forbiddenDir, 'outside-link');
+      const finalLink = path.join(allowedDir, 'final-link');
+
+      await fs.symlink(targetFile, outsideLink);
+      await fs.symlink(outsideLink, finalLink);
+
+      // Chain: hop 1 (outsideLink) is outside allowed dir = 1 hop
+      // hop 2 (targetFile) is inside allowed dir = 0 additional hops outside
+      // Total outside hops = 1, within maxDepth of 1
+      const result = await validatePath(finalLink);
+      expect(result).toBeTruthy();
+    });
+
+    it('blocks symlink that loops back after exceeding depth', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      // Set max depth to 1
+      setSymlinkPolicy({ follow: true, maxDepth: 1 });
+
+      // Create chain: allowed/link1 -> forbidden/link2 -> forbidden/link3 -> allowed/target
+      const targetFile = path.join(allowedDir, 'target.txt');
+      await fs.writeFile(targetFile, 'content');
+
+      const link1 = path.join(forbiddenDir, 'link1');
+      const link2 = path.join(forbiddenDir, 'link2');
+      const finalLink = path.join(allowedDir, 'final-link');
+
+      await fs.symlink(targetFile, link1);
+      await fs.symlink(link1, link2);
+      await fs.symlink(link2, finalLink);
+
+      // Chain has 2 hops outside before reaching final target
+      await expect(validatePath(finalLink)).rejects.toThrow(/exceeded max depth of 1/);
+    });
+
+    it('detects circular symlinks and throws', async () => {
+      const symlinkSupported = await getSymlinkSupport();
+      if (!symlinkSupported) {
+        console.log('   ⏭️  Skipping - symlinks not supported');
+        return;
+      }
+
+      // Add test dir to allowed directories for this test
+      const resolvedDirs = await resolveAllowedDirectories(testDir);
+      setAllowedDirectories(resolvedDirs);
+      
+      setSymlinkPolicy({ follow: true, maxDepth: 5 });
+
+      // Create circular symlinks
+      const linkA = path.join(testDir, 'link-a');
+      const linkB = path.join(testDir, 'link-b');
+
+      await fs.symlink(linkB, linkA);
+      await fs.symlink(linkA, linkB);
+
+      // Should detect circular symlink
+      await expect(validatePath(linkA)).rejects.toThrow(/circular symlink detected/);
+    });
+
+    it('handles non-existent paths with symlink policy', async () => {
+      setSymlinkPolicy({ follow: true, maxDepth: 1 });
+
+      const newFilePath = path.join(allowedDir, 'newfile.txt');
+      
+      // Should return the path without error for new files in existing directory
+      const result = await validatePath(newFilePath);
+      expect(result).toBe(newFilePath);
+    });
+  });
+
+  describe('getSymlinkPolicy', () => {
+    it('returns current symlink policy', () => {
+      setSymlinkPolicy({ follow: true, maxDepth: 5 });
+      
+      const policy = getSymlinkPolicy();
+      expect(policy.follow).toBe(true);
+      expect(policy.maxDepth).toBe(5);
+    });
+
+    it('returns default policy when not set', () => {
+      // Reset to defaults
+      setSymlinkPolicy({ follow: false, maxDepth: 1 });
+      
+      const policy = getSymlinkPolicy();
+      expect(policy.follow).toBe(false);
+      expect(policy.maxDepth).toBe(1);
+    });
+  });
+});