diff --git a/src/libraries/System.Formats.Tar/src/System/Formats/Tar/TarEntry.cs b/src/libraries/System.Formats.Tar/src/System/Formats/Tar/TarEntry.cs
index 61368173b0d31..e7d6761c592c8 100644
--- a/src/libraries/System.Formats.Tar/src/System/Formats/Tar/TarEntry.cs
+++ b/src/libraries/System.Formats.Tar/src/System/Formats/Tar/TarEntry.cs
@@ -349,11 +349,17 @@ internal Task ExtractRelativeToDirectoryAsync(string destinationDirectoryPath, b
                     throw new InvalidDataException(SR.TarEntryHardLinkOrSymlinkLinkNameEmpty);
                 }
 
-                linkTargetPath = GetSanitizedFullPath(destinationDirectoryPath, LinkName);
+                linkTargetPath = GetSanitizedFullPath(destinationDirectoryPath,
+                    Path.IsPathFullyQualified(LinkName) ? LinkName : Path.Join(Path.GetDirectoryName(fileDestinationPath), LinkName));
+
                 if (linkTargetPath == null)
                 {
                     throw new IOException(SR.Format(SR.TarExtractingResultsLinkOutside, LinkName, destinationDirectoryPath));
                 }
+
+                // after TarExtractingResultsLinkOutside validation, preserve the original
+                // symlink target path (to match behavior of other utilities).
+                linkTargetPath = LinkName;
             }
 
             return (fileDestinationPath, linkTargetPath);
diff --git a/src/libraries/System.Formats.Tar/tests/System.Formats.Tar.Tests.csproj b/src/libraries/System.Formats.Tar/tests/System.Formats.Tar.Tests.csproj
index ca1b4d99e508f..1d30aa09d0f97 100644
--- a/src/libraries/System.Formats.Tar/tests/System.Formats.Tar.Tests.csproj
+++ b/src/libraries/System.Formats.Tar/tests/System.Formats.Tar.Tests.csproj
@@ -2,7 +2,7 @@
   <PropertyGroup>
     <TargetFrameworks>$(NetCoreAppCurrent)-windows;$(NetCoreAppCurrent)-Unix</TargetFrameworks>
     <AllowUnsafeBlocks>true</AllowUnsafeBlocks>
-    <StringResourcesPath>$(LibrariesProjectRoot)/Common/tests/Resources/Strings.resx</StringResourcesPath>
+    <StringResourcesPath>$(MSBuildProjectDirectory)\..\src\Resources\Strings.resx</StringResourcesPath>
     <EnableLibraryImportGenerator>true</EnableLibraryImportGenerator>
     <IncludeRemoteExecutor>true</IncludeRemoteExecutor>
   </PropertyGroup>
@@ -17,6 +17,7 @@
     <Compile Include="TarFile\TarFile.ExtractToDirectoryAsync.File.Tests.cs" />
     <Compile Include="TarFile\TarFile.CreateFromDirectoryAsync.Stream.Tests.cs" />
     <Compile Include="TarFile\TarFile.CreateFromDirectoryAsync.File.Tests.cs" />
+    <Compile Include="TarFile\TarFile.CreateFromDirectory.File.Roundtrip.cs" />
     <Compile Include="TarEntry\TarEntry.Conversion.Tests.Base.cs" />
     <Compile Include="TarEntry\GnuTarEntry.Conversion.Tests.cs" />
     <Compile Include="TarEntry\PaxTarEntry.Conversion.Tests.cs" />
diff --git a/src/libraries/System.Formats.Tar/tests/TarFile/TarFile.CreateFromDirectory.File.Roundtrip.cs b/src/libraries/System.Formats.Tar/tests/TarFile/TarFile.CreateFromDirectory.File.Roundtrip.cs
new file mode 100644
index 0000000000000..460dec7578008
--- /dev/null
+++ b/src/libraries/System.Formats.Tar/tests/TarFile/TarFile.CreateFromDirectory.File.Roundtrip.cs
@@ -0,0 +1,79 @@
+// Licensed to the .NET Foundation under one or more agreements.
+// The .NET Foundation licenses this file to you under the MIT license.
+
+using System.IO;
+using Xunit;
+
+namespace System.Formats.Tar.Tests
+{
+    public class TarFile_CreateFromDirectory_Roundtrip_Tests : TarTestsBase
+    {
+        [ConditionalTheory(typeof(MountHelper), nameof(MountHelper.CanCreateSymbolicLinks))]
+        [InlineData("./file.txt", "subDirectory")]
+        [InlineData("../file.txt", "subDirectory")]
+        [InlineData("../file.txt", "subDirectory1/subDirectory1.1")]
+        [InlineData("./file.txt", "subDirectory1/subDirectory1.1")]
+        [InlineData("./file.txt", null)]
+        public void SymlinkRelativeTargets_InsideTheArchive_RoundtripsSuccessfully(string symlinkTargetPath, string subDirectory)
+        {
+            using TempDirectory root = new TempDirectory();
+
+            string destinationArchive = Path.Join(root.Path, "destination.tar");
+
+            string sourceDirectoryName = Path.Join(root.Path, "baseDirectory");
+            Directory.CreateDirectory(sourceDirectoryName);
+
+            string destinationDirectoryName = Path.Join(root.Path, "destinationDirectory");
+            Directory.CreateDirectory(destinationDirectoryName);
+
+            string sourceSubDirectory = Path.Join(sourceDirectoryName, subDirectory);
+            if(subDirectory != null)  Directory.CreateDirectory(sourceSubDirectory);
+
+            File.Create(Path.Join(sourceDirectoryName, subDirectory, symlinkTargetPath)).Dispose();
+            File.CreateSymbolicLink(Path.Join(sourceSubDirectory, "linkToFile"), symlinkTargetPath);
+
+            TarFile.CreateFromDirectory(sourceDirectoryName, destinationArchive, includeBaseDirectory: false);
+
+            using FileStream archiveStream = File.OpenRead(destinationArchive);
+            TarFile.ExtractToDirectory(archiveStream, destinationDirectoryName, overwriteFiles: true);
+
+            string destinationSubDirectory = Path.Join(destinationDirectoryName, subDirectory);
+            string symlinkPath = Path.Join(destinationSubDirectory, "linkToFile");
+            Assert.True(File.Exists(symlinkPath));
+
+            FileInfo? fileInfo = new(symlinkPath);
+            Assert.Equal(symlinkTargetPath, fileInfo.LinkTarget);
+
+            FileSystemInfo? symlinkTarget = File.ResolveLinkTarget(symlinkPath, returnFinalTarget: true);
+            Assert.True(File.Exists(symlinkTarget.FullName));
+        }
+
+        [ConditionalTheory(typeof(MountHelper), nameof(MountHelper.CanCreateSymbolicLinks))]
+        [InlineData("../file.txt", null)]
+        [InlineData("../../file.txt", "subDirectory")]
+        public void SymlinkRelativeTargets_OutsideTheArchive_Fails(string symlinkTargetPath, string subDirectory)
+        {
+            using TempDirectory root = new TempDirectory();
+
+            string destinationArchive = Path.Join(root.Path, "destination.tar");
+
+            string sourceDirectoryName = Path.Join(root.Path, "baseDirectory");
+            Directory.CreateDirectory(sourceDirectoryName);
+
+            string destinationDirectoryName = Path.Join(root.Path, "destinationDirectory");
+            Directory.CreateDirectory(destinationDirectoryName);
+
+            string sourceSubDirectory = Path.Join(sourceDirectoryName, subDirectory);
+            if(subDirectory != null)  Directory.CreateDirectory(sourceSubDirectory);
+
+            File.CreateSymbolicLink(Path.Join(sourceSubDirectory, "linkToFile"), symlinkTargetPath);
+
+            TarFile.CreateFromDirectory(sourceDirectoryName, destinationArchive, includeBaseDirectory: false);
+
+            using FileStream archiveStream = File.OpenRead(destinationArchive);
+            Exception exception = Assert.Throws<IOException>(() => TarFile.ExtractToDirectory(archiveStream, destinationDirectoryName, overwriteFiles: true));
+
+            Assert.Equal(SR.Format(SR.TarExtractingResultsLinkOutside, symlinkTargetPath, destinationDirectoryName), exception.Message);
+        }
+    }
+}
diff --git a/src/libraries/System.Formats.Tar/tests/TarFile/TarFile.ExtractToDirectoryAsync.Stream.Tests.cs b/src/libraries/System.Formats.Tar/tests/TarFile/TarFile.ExtractToDirectoryAsync.Stream.Tests.cs
index ec32ab1ab8136..cde32d3f97916 100644
--- a/src/libraries/System.Formats.Tar/tests/TarFile/TarFile.ExtractToDirectoryAsync.Stream.Tests.cs
+++ b/src/libraries/System.Formats.Tar/tests/TarFile/TarFile.ExtractToDirectoryAsync.Stream.Tests.cs
@@ -110,6 +110,29 @@ public async Task ExtractEntry_DockerImageTarWithFileTypeInDirectoriesInMode_Suc
             }
         }
 
+        [ConditionalFact(typeof(MountHelper), nameof(MountHelper.CanCreateSymbolicLinks))]
+        public async Task ExtractEntry_PodmanImageTarWithRelativeSymlinksPointingInExtractDirectory_SuccessfullyExtracts_Async()
+        {
+            using (TempDirectory root = new TempDirectory())
+            {
+                await using MemoryStream archiveStream = GetTarMemoryStream(CompressionMethod.Uncompressed, "misc", "podman-hello-world");
+                await TarFile.ExtractToDirectoryAsync(archiveStream, root.Path, overwriteFiles: true);
+
+                Assert.True(File.Exists(Path.Join(root.Path, "manifest.json")));
+                Assert.True(File.Exists(Path.Join(root.Path, "repositories")));
+                Assert.True(File.Exists(Path.Join(root.Path, "efb53921da3394806160641b72a2cbd34ca1a9a8345ac670a85a04ad3d0e3507.tar")));
+
+                string symlinkPath = Path.Join(root.Path, "e7fc2b397c1ab5af9938f18cc9a80d526cccd1910e4678390157d8cc6c94410d/layer.tar");
+                Assert.True(File.Exists(symlinkPath));
+
+                FileInfo? fileInfo = new(symlinkPath);
+                Assert.Equal("../efb53921da3394806160641b72a2cbd34ca1a9a8345ac670a85a04ad3d0e3507.tar", fileInfo.LinkTarget);
+
+                FileSystemInfo? symlinkTarget = File.ResolveLinkTarget(symlinkPath, returnFinalTarget: true);
+                Assert.True(File.Exists(symlinkTarget.FullName));
+            }
+        }
+
         [Theory]
         [InlineData(TarEntryType.SymbolicLink)]
         [InlineData(TarEntryType.HardLink)]