diff --git a/docs/changelog/1169.bugfix.rst b/docs/changelog/1169.bugfix.rst
new file mode 100644
index 000000000..7079b1fdb
--- /dev/null
+++ b/docs/changelog/1169.bugfix.rst
@@ -0,0 +1 @@
+Resolve symlinks with ``toxworkdir`` - by :user:`blueyed`.
diff --git a/src/tox/config/__init__.py b/src/tox/config/__init__.py
index 156272359..666125811 100644
--- a/src/tox/config/__init__.py
+++ b/src/tox/config/__init__.py
@@ -999,6 +999,9 @@ def __init__(self, config, ini_path, ini_data):  # noqa
         else:
             config.toxworkdir = config.toxinidir.join(config.option.workdir, abs=True)
 
+        if os.path.exists(str(config.toxworkdir)):
+            config.toxworkdir = config.toxworkdir.realpath()
+
         if config.option.skip_missing_interpreters == "config":
             val = reader.getbool("skip_missing_interpreters", False)
             config.option.skip_missing_interpreters = "true" if val else "false"
diff --git a/tests/unit/config/test_config.py b/tests/unit/config/test_config.py
index a134fd657..02aff7988 100644
--- a/tests/unit/config/test_config.py
+++ b/tests/unit/config/test_config.py
@@ -276,6 +276,21 @@ def test_explicit_config_path(self, tmpdir):
         config = parseconfig(["-c", str(path)])
         assert config.toxinipath == config_file_path
 
+    @pytest.mark.skipif(sys.platform == "win32", reason="no symlinks on Windows")
+    def test_workdir_gets_resolved(self, tmp_path, monkeypatch):
+        """
+        Test explicitly setting config path, both with and without the filename
+        """
+        real = tmp_path / "real"
+        real.mkdir()
+        symlink = tmp_path / "link"
+        symlink.symlink_to(real)
+
+        (tmp_path / "tox.ini").touch()
+        monkeypatch.chdir(tmp_path)
+        config = parseconfig(["--workdir", str(symlink)])
+        assert config.toxworkdir == real
+
 
 def test_get_homedir(monkeypatch):
     monkeypatch.setattr(py.path.local, "_gethomedir", classmethod(lambda x: {}[1]))