diff --git a/packages/jest-cli/src/cli/args.js b/packages/jest-cli/src/cli/args.js
index 99e92b21f959..55ab6ddfaf26 100644
--- a/packages/jest-cli/src/cli/args.js
+++ b/packages/jest-cli/src/cli/args.js
@@ -420,6 +420,13 @@ export const options = {
       'Will not fail if no tests are found (for example while using `--testPathPattern`.)',
     type: 'boolean',
   },
+  preserveSymlinks: {
+    default: false,
+    description:
+      'Find symlinked files and do not expand their file paths during' +
+      'module resolution',
+    type: 'boolean',
+  },
   preset: {
     description: "A preset that is used as a base for Jest's configuration.",
     type: 'string',
diff --git a/packages/jest-config/src/index.js b/packages/jest-config/src/index.js
index b1832b94af6a..22ddb8a4e35a 100644
--- a/packages/jest-config/src/index.js
+++ b/packages/jest-config/src/index.js
@@ -176,6 +176,7 @@ const groupOptions = (
     modulePathIgnorePatterns: options.modulePathIgnorePatterns,
     modulePaths: options.modulePaths,
     name: options.name,
+    preserveSymlinks: options.preserveSymlinks,
     prettierPath: options.prettierPath,
     resetMocks: options.resetMocks,
     resetModules: options.resetModules,
diff --git a/packages/jest-config/src/normalize.js b/packages/jest-config/src/normalize.js
index ef6886ce2a3b..af74696cc148 100644
--- a/packages/jest-config/src/normalize.js
+++ b/packages/jest-config/src/normalize.js
@@ -648,6 +648,7 @@ export default function normalize(options: InitialOptions, argv: Argv) {
       case 'onlyChanged':
       case 'outputFile':
       case 'passWithNoTests':
+      case 'preserveSymlinks':
       case 'replname':
       case 'reporters':
       case 'resetMocks':
diff --git a/packages/jest-haste-map/src/crawlers/node.js b/packages/jest-haste-map/src/crawlers/node.js
index 53f4194df54a..c53506cb3cd0 100644
--- a/packages/jest-haste-map/src/crawlers/node.js
+++ b/packages/jest-haste-map/src/crawlers/node.js
@@ -78,9 +78,13 @@ function findNative(
   roots: Array<string>,
   extensions: Array<string>,
   ignore: IgnoreMatcher,
+  preserveSymlinks: boolean,
   callback: Callback,
 ): void {
   const args = [].concat(roots);
+  if (preserveSymlinks) {
+    args.unshift('-L');
+  }
   args.push('-type', 'f');
   if (extensions.length) {
     args.push('(');
@@ -137,6 +141,7 @@ module.exports = function nodeCrawl(
     extensions,
     forceNodeFilesystemAPI,
     ignore,
+    preserveSymlinks,
     rootDir,
     roots,
   } = options;
@@ -163,7 +168,7 @@ module.exports = function nodeCrawl(
     if (forceNodeFilesystemAPI || process.platform === 'win32') {
       find(roots, extensions, ignore, callback);
     } else {
-      findNative(roots, extensions, ignore, callback);
+      findNative(roots, extensions, ignore, preserveSymlinks, callback);
     }
   });
 };
diff --git a/packages/jest-haste-map/src/index.js b/packages/jest-haste-map/src/index.js
index ef5392efd5fe..53d35f4d4c26 100644
--- a/packages/jest-haste-map/src/index.js
+++ b/packages/jest-haste-map/src/index.js
@@ -62,6 +62,7 @@ type Options = {
   mocksPattern?: string,
   name: string,
   platforms: Array<string>,
+  preserveSymlinks: boolean,
   providesModuleNodeModules?: Array<string>,
   resetCache?: boolean,
   retainAllFiles: boolean,
@@ -86,6 +87,7 @@ type InternalOptions = {
   mocksPattern: ?RegExp,
   name: string,
   platforms: Array<string>,
+  preserveSymlinks: boolean,
   resetCache: ?boolean,
   retainAllFiles: boolean,
   rootDir: string,
@@ -246,12 +248,16 @@ class HasteMap extends EventEmitter {
         : null,
       name: options.name,
       platforms: options.platforms,
+      preserveSymlinks: options.preserveSymlinks,
       resetCache: options.resetCache,
       retainAllFiles: options.retainAllFiles,
       rootDir: options.rootDir,
       roots: Array.from(new Set(options.roots)),
       throwOnModuleCollision: !!options.throwOnModuleCollision,
-      useWatchman: options.useWatchman == null ? true : options.useWatchman,
+      // Watchman can not handle symlinks: https://github.com/facebook/watchman/issues/105
+      useWatchman: options.preserveSymlinks == true
+        ? false
+        : options.useWatchman == null ? true : options.useWatchman,
       watch: !!options.watch,
     };
     this._console = options.console || global.console;
@@ -705,6 +711,7 @@ class HasteMap extends EventEmitter {
           forceNodeFilesystemAPI: options.forceNodeFilesystemAPI,
           ignore,
           mapper: options.mapper,
+          preserveSymlinks: options.preserveSymlinks,
           rootDir: options.rootDir,
           roots: options.roots,
         }).catch(e => {
@@ -726,6 +733,7 @@ class HasteMap extends EventEmitter {
         extensions: options.extensions,
         forceNodeFilesystemAPI: options.forceNodeFilesystemAPI,
         ignore,
+        preserveSymlinks: options.preserveSymlinks,
         rootDir: options.rootDir,
         roots: options.roots,
       }).catch(retry);
diff --git a/packages/jest-haste-map/src/types.js b/packages/jest-haste-map/src/types.js
index 8ee12a279fb5..1e6af41825ad 100644
--- a/packages/jest-haste-map/src/types.js
+++ b/packages/jest-haste-map/src/types.js
@@ -35,6 +35,7 @@ export type CrawlerOptions = {|
   forceNodeFilesystemAPI: boolean,
   ignore: IgnoreMatcher,
   mapper?: ?Mapper,
+  preserveSymlinks: boolean,
   rootDir: string,
   roots: Array<string>,
 |};
diff --git a/packages/jest-resolve/src/defaultResolver.js b/packages/jest-resolve/src/defaultResolver.js
index 02f311c22ece..fa625145c852 100644
--- a/packages/jest-resolve/src/defaultResolver.js
+++ b/packages/jest-resolve/src/defaultResolver.js
@@ -22,6 +22,7 @@ type ResolverOptions = {|
   extensions?: Array<string>,
   moduleDirectory?: Array<string>,
   paths?: ?Array<Path>,
+  preserveSymlinks: boolean,
   rootDir: ?Path,
 |};
 
@@ -36,6 +37,7 @@ export default function defaultResolver(
     extensions: options.extensions,
     moduleDirectory: options.moduleDirectory,
     paths: options.paths,
+    preserveSymlinks: options.preserveSymlinks,
     rootDir: options.rootDir,
   });
 }
@@ -50,7 +52,7 @@ function resolveSync(target: Path, options: ResolverOptions): Path {
   if (REGEX_RELATIVE_IMPORT.test(target)) {
     // resolve relative import
     const resolveTarget = path.resolve(basedir, target);
-    const result = tryResolve(resolveTarget);
+    const result = tryResolve(resolveTarget, options.preserveSymlinks);
     if (result) {
       return result;
     }
@@ -62,7 +64,7 @@ function resolveSync(target: Path, options: ResolverOptions): Path {
     });
     for (let i = 0; i < dirs.length; i++) {
       const resolveTarget = path.join(dirs[i], target);
-      const result = tryResolve(resolveTarget);
+      const result = tryResolve(resolveTarget, options.preserveSymlinks);
       if (result) {
         return result;
       }
@@ -82,13 +84,13 @@ function resolveSync(target: Path, options: ResolverOptions): Path {
   /*
    * contextual helper functions
    */
-  function tryResolve(name: Path): ?Path {
+  function tryResolve(name: Path, preserveSymlinks: boolean): ?Path {
     const dir = path.dirname(name);
     let result;
     if (isDirectory(dir)) {
-      result = resolveAsFile(name) || resolveAsDirectory(name);
+      result = resolveAsFile(name) || resolveAsDirectory(name, preserveSymlinks);
     }
-    if (result) {
+    if (result && !preserveSymlinks) {
       // Dereference symlinks to ensure we don't create a separate
       // module instance depending on how it was referenced.
       result = fs.realpathSync(result);
@@ -111,7 +113,7 @@ function resolveSync(target: Path, options: ResolverOptions): Path {
     return undefined;
   }
 
-  function resolveAsDirectory(name: Path): ?Path {
+  function resolveAsDirectory(name: Path, preserveSymlinks: boolean): ?Path {
     if (!isDirectory(name)) {
       return undefined;
     }
@@ -125,7 +127,7 @@ function resolveSync(target: Path, options: ResolverOptions): Path {
 
     if (pkgmain && !isCurrentDirectory(pkgmain)) {
       const resolveTarget = path.resolve(name, pkgmain);
-      const result = tryResolve(resolveTarget);
+      const result = tryResolve(resolveTarget, preserveSymlinks);
       if (result) {
         return result;
       }
diff --git a/packages/jest-resolve/src/index.js b/packages/jest-resolve/src/index.js
index cf3ba0d85093..53f374a8419f 100644
--- a/packages/jest-resolve/src/index.js
+++ b/packages/jest-resolve/src/index.js
@@ -28,6 +28,7 @@ type ResolverConfig = {|
   moduleNameMapper: ?Array<ModuleNameMapperConfig>,
   modulePaths: Array<Path>,
   platforms?: Array<string>,
+  preserveSymlinks?: boolean,
   resolver: ?Path,
   rootDir: ?Path,
 |};
@@ -38,6 +39,7 @@ type FindNodeModuleConfig = {|
   extensions?: Array<string>,
   moduleDirectory?: Array<string>,
   paths?: Array<Path>,
+  preserveSymlinks?: boolean,
   resolver?: ?Path,
   rootDir?: ?Path,
 |};
@@ -80,6 +82,7 @@ class Resolver {
       moduleNameMapper: options.moduleNameMapper,
       modulePaths: options.modulePaths,
       platforms: options.platforms,
+      preserveSymlinks: options.preserveSymlinks,
       resolver: options.resolver,
       rootDir: options.rootDir,
     };
@@ -106,6 +109,7 @@ class Resolver {
         extensions: options.extensions,
         moduleDirectory: options.moduleDirectory,
         paths: paths ? (nodePaths || []).concat(paths) : nodePaths,
+        preserveSymlinks: options.preserveSymlinks,
         rootDir: options.rootDir,
       });
     } catch (e) {}
@@ -161,6 +165,7 @@ class Resolver {
         extensions,
         moduleDirectory,
         paths,
+        preserveSymlinks: this._options.preserveSymlinks,
         resolver: this._options.resolver,
         rootDir: this._options.rootDir,
       });
@@ -380,6 +385,7 @@ class Resolver {
               extensions,
               moduleDirectory,
               paths,
+              preserveSymlinks: this._options.preserveSymlinks,
               resolver,
               rootDir: this._options.rootDir,
             });
diff --git a/packages/jest-resolve/src/nodeModulesPaths.js b/packages/jest-resolve/src/nodeModulesPaths.js
index 84cb68a2c3fb..3040e964c021 100644
--- a/packages/jest-resolve/src/nodeModulesPaths.js
+++ b/packages/jest-resolve/src/nodeModulesPaths.js
@@ -16,6 +16,7 @@ import {sync as realpath} from 'realpath-native';
 type NodeModulesPathsOptions = {|
   moduleDirectory?: Array<string>,
   paths?: ?Array<Path>,
+  preserveSymlinks?: boolean,
 |};
 
 export default function nodeModulesPaths(
@@ -42,7 +43,11 @@ export default function nodeModulesPaths(
   // traverses parents of the physical path, not the symlinked path
   let physicalBasedir;
   try {
-    physicalBasedir = realpath(basedirAbs);
+    if (!options.preserveSymlinks) {
+      physicalBasedir = realpath(basedirAbs);
+    } else {
+      physicalBasedir = basedirAbs;
+    }
   } catch (err) {
     // realpath can throw, e.g. on mapped drives
     physicalBasedir = basedirAbs;
diff --git a/packages/jest-runtime/src/index.js b/packages/jest-runtime/src/index.js
index f91e481a2925..3d25dd9c9622 100644
--- a/packages/jest-runtime/src/index.js
+++ b/packages/jest-runtime/src/index.js
@@ -266,6 +266,7 @@ class Runtime {
       moduleNameMapper: getModuleNameMapper(config),
       modulePaths: config.modulePaths,
       platforms: config.haste.platforms,
+      preserveSymlinks: config.preserveSymlinks,
       resolver: config.resolver,
       rootDir: config.rootDir,
     });
diff --git a/packages/jest-runtime/src/script_transformer.js b/packages/jest-runtime/src/script_transformer.js
index a25683156afd..b901c4ed4873 100644
--- a/packages/jest-runtime/src/script_transformer.js
+++ b/packages/jest-runtime/src/script_transformer.js
@@ -54,6 +54,8 @@ const projectCaches: WeakMap<ProjectConfig, ProjectCache> = new WeakMap();
 // To reset the cache for specific changesets (rather than package version).
 const CACHE_VERSION = '1';
 
+const preserveSymlinks = true;
+
 export default class ScriptTransformer {
   static EVAL_RESULT_VARIABLE: string;
   _cache: ProjectCache;
@@ -197,7 +199,7 @@ export default class ScriptTransformer {
   }
 
   transformSource(filepath: Path, content: string, instrument: boolean) {
-    const filename = this._getRealPath(filepath);
+    const filename = preserveSymlinks ? filepath : this._getRealPath(filepath);
     const transform = this._getTransformer(filename);
     const cacheFilePath = this._getFileCachePath(filename, content, instrument);
     let sourceMapPath = cacheFilePath + '.map';
diff --git a/types/Argv.js b/types/Argv.js
index 966c82327dbd..f4d420ef3598 100644
--- a/types/Argv.js
+++ b/types/Argv.js
@@ -60,6 +60,7 @@ export type Argv = {|
   notifyMode: string,
   onlyChanged: boolean,
   outputFile: string,
+  preserveSymlinks: boolean,
   preset: ?string,
   projects: Array<string>,
   replname: ?string,
diff --git a/types/Config.js b/types/Config.js
index 39eac782b764..78ef6cdcd8a0 100644
--- a/types/Config.js
+++ b/types/Config.js
@@ -268,6 +268,7 @@ export type ProjectConfig = {|
   modulePathIgnorePatterns: Array<string>,
   modulePaths: Array<string>,
   name: string,
+  preserveSymlinks: boolean,
   prettierPath: string,
   resetMocks: boolean,
   resetModules: boolean,