diff --git a/strix/runtime/local_dir_staging.py b/strix/runtime/local_dir_staging.py
new file mode 100644
index 00000000..4758aa5c
--- /dev/null
+++ b/strix/runtime/local_dir_staging.py
@@ -0,0 +1,120 @@
+"""Symlink-safe staging for ``LocalDir`` manifest uploads.
+
+The sandbox SDK's ``LocalDir`` walker refuses to copy symlinks at all — it
+raises ``LocalDirReadError(reason="symlink_not_supported")`` on the first one
+as a path-escape / TOCTOU safeguard. Real source trees (especially JS/TS
+monorepos with workspace or shared-config links) routinely commit symlinks, so
+handing such a tree straight to ``LocalDir`` aborts the upload before the agent
+even starts.
+
+:func:`stage_symlink_safe_dir` returns a path that is always safe to hand to
+``LocalDir``:
+
+* a tree with no symlinks is used as-is (no copy);
+* otherwise the tree is copied into a temp directory with symlinks resolved:
+
+  - a link whose target stays inside the tree is *dereferenced* (its target
+    content is materialized in place), so the agent still sees the file;
+  - a link that escapes the tree, dangles, or forms a cycle is *dropped* and
+    never followed. Refusing to follow out-of-tree links preserves the walker's
+    path-escape safety and keeps host/out-of-tree content from leaking into the
+    (hostile) sandbox.
+
+Regular files are hard-linked when possible (falling back to a copy across
+devices), so the staged tree adds negligible disk for the non-symlink bulk.
+"""
+
+from __future__ import annotations
+
+import logging
+import os
+import shutil
+import tempfile
+from pathlib import Path
+
+
+logger = logging.getLogger(__name__)
+
+_STAGING_PREFIX = "strix-localdir-"
+
+
+def _is_within(target: Path, root: Path) -> bool:
+    """Return whether ``target`` is ``root`` itself or nested under it."""
+    if target == root:
+        return True
+    try:
+        target.relative_to(root)
+    except ValueError:
+        return False
+    return True
+
+
+def tree_has_symlink(root: Path) -> bool:
+    """Return whether ``root`` contains any symlink (file or directory)."""
+    for dirpath, dirnames, filenames in os.walk(root, followlinks=False):
+        base = Path(dirpath)
+        for name in (*dirnames, *filenames):
+            if (base / name).is_symlink():
+                return True
+    return False
+
+
+def _link_or_copy(src: Path, dst: Path) -> None:
+    """Hard-link ``src`` to ``dst``, falling back to a content copy."""
+    try:
+        os.link(src, dst)
+    except OSError:
+        shutil.copy2(src, dst, follow_symlinks=True)
+
+
+def _stage_dir(src: Path, dst: Path, root: Path, seen: frozenset[Path]) -> None:
+    dst.mkdir(parents=True, exist_ok=True)
+    for entry in os.scandir(src):
+        entry_path = Path(entry.path)
+        dest_path = dst / entry.name
+
+        if entry.is_symlink():
+            target = Path(os.path.realpath(entry_path))
+            if not _is_within(target, root):
+                logger.warning("staging: dropping out-of-tree symlink %s -> %s", entry_path, target)
+                continue
+            if not target.exists():
+                logger.warning("staging: dropping dangling symlink %s", entry_path)
+                continue
+            if target in seen:
+                logger.warning("staging: dropping cyclic symlink %s -> %s", entry_path, target)
+                continue
+            if target.is_dir():
+                _stage_dir(target, dest_path, root, seen | {target})
+            else:
+                _link_or_copy(target, dest_path)
+        elif entry.is_dir(follow_symlinks=False):
+            _stage_dir(entry_path, dest_path, root, seen)
+        elif entry.is_file(follow_symlinks=False):
+            _link_or_copy(entry_path, dest_path)
+        else:
+            # Sockets, FIFOs, devices — not part of a source tree; skip.
+            logger.debug("staging: skipping non-regular entry %s", entry_path)
+
+
+def stage_symlink_safe_dir(src_root: Path) -> tuple[Path, Path | None]:
+    """Return ``(upload_path, staged_temp)`` for uploading ``src_root``.
+
+    ``upload_path`` is safe to hand to ``LocalDir``. When the tree contains no
+    symlinks it is ``src_root`` itself and ``staged_temp`` is ``None``.
+    Otherwise a symlink-safe copy is materialized in a temp directory and both
+    returned values point at it; the caller owns removing ``staged_temp`` once
+    the upload completes.
+    """
+    root = src_root.resolve()
+    if not tree_has_symlink(root):
+        return root, None
+
+    staged = Path(tempfile.mkdtemp(prefix=_STAGING_PREFIX))
+    try:
+        _stage_dir(root, staged, root, frozenset({root}))
+    except OSError:
+        shutil.rmtree(staged, ignore_errors=True)
+        raise
+    logger.info("staging: materialized symlink-safe copy of %s at %s", root, staged)
+    return staged, staged
diff --git a/strix/runtime/session_manager.py b/strix/runtime/session_manager.py
index b16e79ba..5aa71423 100644
--- a/strix/runtime/session_manager.py
+++ b/strix/runtime/session_manager.py
@@ -3,6 +3,7 @@
 from __future__ import annotations
 
 import logging
+import shutil
 from pathlib import Path
 from typing import Any
 
@@ -12,6 +13,7 @@ from agents.sandbox.manifest import Environment, Manifest
 from strix.config import load_settings
 from strix.runtime.backends import get_backend
 from strix.runtime.caido_bootstrap import bootstrap_caido
+from strix.runtime.local_dir_staging import stage_symlink_safe_dir
 
 
 logger = logging.getLogger(__name__)
@@ -29,16 +31,20 @@ _WORKSPACE_ROOT = "/workspace"
 
 def build_session_entries(
     local_sources: list[dict[str, Any]],
-) -> tuple[dict[str | Path, BaseEntry], list[dict[str, Any]]]:
+) -> tuple[dict[str | Path, BaseEntry], list[dict[str, Any]], list[Path]]:
     """Split local sources into copied manifest entries and host bind mounts.
 
     Sources flagged ``mount`` are bind-mounted read-only at
     ``/workspace/<workspace_subdir>`` (not added to the manifest, so the SDK
     does not stream them in file-by-file). Every other source becomes a
-    ``LocalDir`` entry copied into the container as before.
+    ``LocalDir`` entry copied into the container as before. Trees containing
+    symlinks (which the SDK's ``LocalDir`` walker refuses outright) are first
+    staged into a symlink-safe temp copy; those temp dirs are returned so the
+    caller can remove them once the upload completes.
     """
     entries: dict[str | Path, BaseEntry] = {}
     bind_mounts: list[dict[str, Any]] = []
+    staged_dirs: list[Path] = []
     for src in local_sources:
         ws_subdir = src.get("workspace_subdir") or ""
         host_path = src.get("source_path") or ""
@@ -54,8 +60,11 @@ def build_session_entries(
                 }
             )
         else:
-            entries[ws_subdir] = LocalDir(src=resolved)
-    return entries, bind_mounts
+            upload_path, staged = stage_symlink_safe_dir(resolved)
+            if staged is not None:
+                staged_dirs.append(staged)
+            entries[ws_subdir] = LocalDir(src=upload_path)
+    return entries, bind_mounts, staged_dirs
 
 
 async def create_or_reuse(
@@ -75,7 +84,7 @@ async def create_or_reuse(
         logger.info("Reusing existing sandbox session for scan %s", scan_id)
         return cached
 
-    entries, bind_mounts = build_session_entries(local_sources)
+    entries, bind_mounts, staged_dirs = build_session_entries(local_sources)
 
     # Caido runs as an in-container sidecar; HTTP(S) traffic from any
     # process started via ``session.exec`` (the SDK's Shell tool, etc.)
@@ -106,12 +115,16 @@ async def create_or_reuse(
         backend_name,
         image,
     )
-    client, session = await backend(
-        image=image,
-        manifest=manifest,
-        exposed_ports=(_CONTAINER_CAIDO_PORT,),
-        bind_mounts=bind_mounts,
-    )
+    try:
+        client, session = await backend(
+            image=image,
+            manifest=manifest,
+            exposed_ports=(_CONTAINER_CAIDO_PORT,),
+            bind_mounts=bind_mounts,
+        )
+    finally:
+        for staged in staged_dirs:
+            shutil.rmtree(staged, ignore_errors=True)
 
     caido_endpoint = await session.resolve_exposed_port(_CONTAINER_CAIDO_PORT)
     scheme = "https" if caido_endpoint.tls else "http"
diff --git a/tests/test_local_dir_staging.py b/tests/test_local_dir_staging.py
new file mode 100644
index 00000000..89a60221
--- /dev/null
+++ b/tests/test_local_dir_staging.py
@@ -0,0 +1,108 @@
+"""Tests for symlink-safe LocalDir staging."""
+
+from __future__ import annotations
+
+from typing import TYPE_CHECKING
+
+from strix.runtime.local_dir_staging import stage_symlink_safe_dir, tree_has_symlink
+
+
+if TYPE_CHECKING:
+    from pathlib import Path
+
+
+def _make_repo(tmp_path: Path) -> Path:
+    repo = tmp_path / "repo"
+    (repo / "pkg").mkdir(parents=True)
+    (repo / "pkg" / "mod.py").write_text("x = 1\n")
+    (repo / "README.md").write_text("readme\n")
+    return repo
+
+
+def test_tree_without_symlinks_used_as_is(tmp_path: Path) -> None:
+    repo = _make_repo(tmp_path)
+
+    upload_path, staged = stage_symlink_safe_dir(repo)
+
+    assert staged is None
+    assert upload_path == repo.resolve()
+    assert not tree_has_symlink(repo)
+
+
+def test_in_tree_file_symlink_is_dereferenced(tmp_path: Path) -> None:
+    repo = _make_repo(tmp_path)
+    (repo / "link.py").symlink_to(repo / "pkg" / "mod.py")
+
+    upload_path, staged = stage_symlink_safe_dir(repo)
+
+    assert staged is not None
+    assert upload_path == staged
+    assert not (staged / "link.py").is_symlink()
+    assert (staged / "link.py").read_text() == "x = 1\n"
+    assert (staged / "pkg" / "mod.py").read_text() == "x = 1\n"
+    assert not tree_has_symlink(staged)
+
+
+def test_in_tree_relative_dir_symlink_is_dereferenced(tmp_path: Path) -> None:
+    repo = _make_repo(tmp_path)
+    (repo / "pkg_alias").symlink_to("pkg")
+
+    _upload, staged = stage_symlink_safe_dir(repo)
+
+    assert staged is not None
+    assert (staged / "pkg_alias" / "mod.py").read_text() == "x = 1\n"
+    assert not tree_has_symlink(staged)
+
+
+def test_out_of_tree_symlink_is_dropped(tmp_path: Path) -> None:
+    repo = _make_repo(tmp_path)
+    outside = tmp_path / "outside.txt"
+    outside.write_text("secret\n")
+    (repo / "escape.txt").symlink_to(outside)
+    (repo / "abs_escape").symlink_to("/etc")
+
+    _upload, staged = stage_symlink_safe_dir(repo)
+
+    assert staged is not None
+    assert not (staged / "escape.txt").exists()
+    assert not (staged / "abs_escape").exists()
+    assert (staged / "README.md").exists()
+
+
+def test_dangling_symlink_is_dropped(tmp_path: Path) -> None:
+    repo = _make_repo(tmp_path)
+    (repo / "dangling").symlink_to(repo / "does-not-exist")
+
+    _upload, staged = stage_symlink_safe_dir(repo)
+
+    assert staged is not None
+    assert not (staged / "dangling").exists()
+    assert not (staged / "dangling").is_symlink()
+
+
+def test_cyclic_symlink_terminates(tmp_path: Path) -> None:
+    repo = _make_repo(tmp_path)
+    (repo / "self").symlink_to(repo)
+    (repo / "pkg" / "up").symlink_to("..")
+
+    _upload, staged = stage_symlink_safe_dir(repo)
+
+    assert staged is not None
+    assert (staged / "README.md").exists()
+    assert not tree_has_symlink(staged)
+
+
+def test_nested_symlinks_inside_linked_dir(tmp_path: Path) -> None:
+    repo = _make_repo(tmp_path)
+    shared = repo / "shared"
+    shared.mkdir()
+    (shared / "conf.json").write_text("{}\n")
+    (shared / "escape").symlink_to("/etc/passwd")
+    (repo / "pkg" / "shared_link").symlink_to(shared)
+
+    _upload, staged = stage_symlink_safe_dir(repo)
+
+    assert staged is not None
+    assert (staged / "pkg" / "shared_link" / "conf.json").read_text() == "{}\n"
+    assert not (staged / "pkg" / "shared_link" / "escape").exists()
+    assert not (staged / "shared" / "escape").exists()
diff --git a/tests/test_session_entries.py b/tests/test_session_entries.py
index 8288c1d0..e08c59aa 100644
--- a/tests/test_session_entries.py
+++ b/tests/test_session_entries.py
@@ -18,15 +18,18 @@ def _source(subdir: str, path: str, *, mount: bool = False) -> dict[str, Any]:
 
 
 def test_copied_source_becomes_localdir_entry(tmp_path: Path) -> None:
-    entries, bind_mounts = build_session_entries([_source("repo", str(tmp_path))])
+    entries, bind_mounts, staged_dirs = build_session_entries([_source("repo", str(tmp_path))])
 
     assert bind_mounts == []
+    assert staged_dirs == []
     assert isinstance(entries["repo"], LocalDir)
     assert entries["repo"].src == tmp_path.resolve()
 
 
 def test_mounted_source_becomes_bind_mount(tmp_path: Path) -> None:
-    entries, bind_mounts = build_session_entries([_source("repo", str(tmp_path), mount=True)])
+    entries, bind_mounts, _staged = build_session_entries(
+        [_source("repo", str(tmp_path), mount=True)]
+    )
 
     assert entries == {}
     assert bind_mounts == [
@@ -44,7 +47,7 @@ def test_mixed_sources_split_correctly(tmp_path: Path) -> None:
     copied.mkdir()
     mounted.mkdir()
 
-    entries, bind_mounts = build_session_entries(
+    entries, bind_mounts, _staged = build_session_entries(
         [
             _source("copied", str(copied)),
             _source("mounted", str(mounted), mount=True),
@@ -57,7 +60,7 @@ def test_mixed_sources_split_correctly(tmp_path: Path) -> None:
 
 
 def test_incomplete_sources_are_skipped() -> None:
-    entries, bind_mounts = build_session_entries(
+    entries, bind_mounts, staged_dirs = build_session_entries(
         [
             {"source_path": "", "workspace_subdir": "x"},
             {"source_path": "/p", "workspace_subdir": ""},
@@ -65,3 +68,20 @@ def test_incomplete_sources_are_skipped() -> None:
     )
     assert entries == {}
     assert bind_mounts == []
+    assert staged_dirs == []
+
+
+def test_symlink_tree_is_staged(tmp_path: Path) -> None:
+    repo = tmp_path / "repo"
+    repo.mkdir()
+    (repo / "real.txt").write_text("content")
+    (repo / "link.txt").symlink_to(repo / "real.txt")
+
+    entries, _mounts, staged_dirs = build_session_entries([_source("repo", str(repo))])
+
+    assert len(staged_dirs) == 1
+    entry = entries["repo"]
+    assert isinstance(entry, LocalDir)
+    assert entry.src == staged_dirs[0]
+    assert not (staged_dirs[0] / "link.txt").is_symlink()
+    assert (staged_dirs[0] / "link.txt").read_text() == "content"