diff --git a/config.c b/config.c
index 3da3a50e10896342794a48b14405f2f12d946f66..12b1b6261edc5a3d9c2ade1fa1fdf3852b0f41c1 100644
--- a/config.c
+++ b/config.c
@@ -177,7 +177,7 @@ static int prepare_include_condition_pattern(struct strbuf *pat)
 	char *expanded;
 	int prefix = 0;
 
-	expanded = expand_user_path(pat->buf, 0);
+	expanded = expand_user_path(pat->buf, 1);
 	if (expanded) {
 		strbuf_reset(pat);
 		strbuf_addstr(pat, expanded);
@@ -191,7 +191,7 @@ static int prepare_include_condition_pattern(struct strbuf *pat)
 			return error(_("relative config include "
 				       "conditionals must come from files"));
 
-		strbuf_add_absolute_path(&path, cf->path);
+		strbuf_realpath(&path, cf->path, 1);
 		slash = find_last_dir_sep(path.buf);
 		if (!slash)
 			die("BUG: how is this possible?");
@@ -213,7 +213,7 @@ static int include_by_gitdir(const char *cond, size_t cond_len, int icase)
 	struct strbuf pattern = STRBUF_INIT;
 	int ret = 0, prefix;
 
-	strbuf_add_absolute_path(&text, get_git_dir());
+	strbuf_realpath(&text, get_git_dir(), 1);
 	strbuf_add(&pattern, cond, cond_len);
 	prefix = prepare_include_condition_pattern(&pattern);
 
diff --git a/t/t1305-config-include.sh b/t/t1305-config-include.sh
index e8339393203c65fac29a647c5a0f827cf24a4cbb..8fbc7a029f79b1fd9ffae2fa6183ebdd4bbbb923 100755
--- a/t/t1305-config-include.sh
+++ b/t/t1305-config-include.sh
@@ -3,6 +3,16 @@
 test_description='test config file include directives'
 . ./test-lib.sh
 
+# Force setup_explicit_git_dir() to run until the end. This is needed
+# by some tests to make sure real_path() is called on $GIT_DIR. The
+# caller needs to make sure git commands are run from a subdirectory
+# though or real_path() will not be called.
+force_setup_explicit_git_dir() {
+    GIT_DIR="$(pwd)/.git"
+    GIT_WORK_TREE="$(pwd)"
+    export GIT_DIR GIT_WORK_TREE
+}
+
 test_expect_success 'include file by absolute path' '
 	echo "[test]one = 1" >one &&
 	echo "[include]path = \"$(pwd)/one\"" >.gitconfig &&
@@ -208,6 +218,50 @@ test_expect_success 'conditional include, both unanchored, icase' '
 	)
 '
 
+test_expect_success SYMLINKS 'conditional include, set up symlinked $HOME' '
+	mkdir real-home &&
+	ln -s real-home home &&
+	(
+		HOME="$TRASH_DIRECTORY/home" &&
+		export HOME &&
+		cd "$HOME" &&
+
+		git init foo &&
+		cd foo &&
+		mkdir sub
+	)
+'
+
+test_expect_success SYMLINKS 'conditional include, $HOME expansion with symlinks' '
+	(
+		HOME="$TRASH_DIRECTORY/home" &&
+		export HOME &&
+		cd "$HOME"/foo &&
+
+		echo "[includeIf \"gitdir:~/foo/\"]path=bar2" >>.git/config &&
+		echo "[test]two=2" >.git/bar2 &&
+		echo 2 >expect &&
+		force_setup_explicit_git_dir &&
+		git -C sub config test.two >actual &&
+		test_cmp expect actual
+	)
+'
+
+test_expect_success SYMLINKS 'conditional include, relative path with symlinks' '
+	echo "[includeIf \"gitdir:./foo/.git\"]path=bar4" >home/.gitconfig &&
+	echo "[test]four=4" >home/bar4 &&
+	(
+		HOME="$TRASH_DIRECTORY/home" &&
+		export HOME &&
+		cd "$HOME"/foo &&
+
+		echo 4 >expect &&
+		force_setup_explicit_git_dir &&
+		git -C sub config test.four >actual &&
+		test_cmp expect actual
+	)
+'
+
 test_expect_success 'include cycles are detected' '
 	cat >.gitconfig <<-\EOF &&
 	[test]value = gitconfig