diff --git a/cache/contenthash/checksum.go b/cache/contenthash/checksum.go
index 0b878215..f30598f0 100644
--- a/cache/contenthash/checksum.go
+++ b/cache/contenthash/checksum.go
@@ -103,6 +103,7 @@ func (cm *cacheManager) GetCacheContext(ctx context.Context, md *metadata.Storag
 	cm.lruMu.Unlock()
 	if ok {
 		cm.locker.Unlock(md.ID())
+		v.(*cacheContext).linkMap = map[string][][]byte{}
 		return v.(*cacheContext), nil
 	}
 	cc, err := newCacheContext(md)
@@ -127,6 +128,7 @@ func (cm *cacheManager) SetCacheContext(ctx context.Context, md *metadata.Storag
 			md:       md,
 			tree:     cci.(*cacheContext).tree,
 			dirtyMap: map[string]struct{}{},
+			linkMap:  map[string][][]byte{},
 		}
 	} else {
 		if err := cc.save(); err != nil {
@@ -149,6 +151,7 @@ type cacheContext struct {
 	txn      *iradix.Txn
 	node     *iradix.Node
 	dirtyMap map[string]struct{}
+	linkMap  map[string][][]byte
 }
 
 type mount struct {
@@ -193,6 +196,7 @@ func newCacheContext(md *metadata.StorageItem) (*cacheContext, error) {
 		md:       md,
 		tree:     iradix.New(),
 		dirtyMap: map[string]struct{}{},
+		linkMap:  map[string][][]byte{},
 	}
 	if err := cc.load(); err != nil {
 		return nil, err
@@ -325,7 +329,35 @@ func (cc *cacheContext) HandleChange(kind fsutil.ChangeKind, p string, fi os.Fil
 		p += "/"
 	}
 	cr.Digest = h.Digest()
+
+	// if we receive a hardlink just use the digest of the source
+	// note that the source may be called later because data writing is async
+	if fi.Mode()&os.ModeSymlink == 0 && stat.Linkname != "" {
+		ln := path.Join("/", filepath.ToSlash(stat.Linkname))
+		v, ok := cc.txn.Get(convertPathToKey([]byte(ln)))
+		if ok {
+			cp := *v.(*CacheRecord)
+			cr = &cp
+		}
+		cc.linkMap[ln] = append(cc.linkMap[ln], k)
+	}
+
 	cc.txn.Insert(k, cr)
+	if !fi.IsDir() {
+		if links, ok := cc.linkMap[p]; ok {
+			for _, l := range links {
+				pp := convertKeyToPath(l)
+				cc.txn.Insert(l, cr)
+				d := path.Dir(string(pp))
+				if d == "/" {
+					d = ""
+				}
+				cc.dirtyMap[d] = struct{}{}
+			}
+			delete(cc.linkMap, p)
+		}
+	}
+
 	d := path.Dir(p)
 	if d == "/" {
 		d = ""
diff --git a/cache/contenthash/checksum_test.go b/cache/contenthash/checksum_test.go
index bc81f170..d7d6cd62 100644
--- a/cache/contenthash/checksum_test.go
+++ b/cache/contenthash/checksum_test.go
@@ -29,6 +29,89 @@ const (
 	dgstDirD0Modified = digest.Digest("sha256:555ffa3028630d97ba37832b749eda85ab676fd64ffb629fbf0f4ec8c1e3bff1")
 )
 
+func TestChecksumHardlinks(t *testing.T) {
+	t.Parallel()
+	tmpdir, err := ioutil.TempDir("", "buildkit-state")
+	require.NoError(t, err)
+	defer os.RemoveAll(tmpdir)
+
+	snapshotter, err := native.NewSnapshotter(filepath.Join(tmpdir, "snapshots"))
+	require.NoError(t, err)
+	cm := setupCacheManager(t, tmpdir, snapshotter)
+	defer cm.Close()
+
+	ch := []string{
+		"ADD abc dir",
+		"ADD abc/foo file data0",
+		"ADD ln file >/abc/foo",
+		"ADD ln2 file >/abc/foo",
+	}
+
+	ref := createRef(t, cm, ch)
+
+	cc, err := newCacheContext(ref.Metadata())
+	require.NoError(t, err)
+
+	dgst, err := cc.Checksum(context.TODO(), ref, "abc/foo", false)
+	require.NoError(t, err)
+	require.Equal(t, dgstFileData0, dgst)
+
+	dgst, err = cc.Checksum(context.TODO(), ref, "ln", false)
+	require.NoError(t, err)
+	require.Equal(t, dgstFileData0, dgst)
+
+	dgst, err = cc.Checksum(context.TODO(), ref, "ln2", false)
+	require.NoError(t, err)
+	require.Equal(t, dgstFileData0, dgst)
+
+	// validate same results with handleChange
+	ref2 := createRef(t, cm, nil)
+
+	cc2, err := newCacheContext(ref2.Metadata())
+	require.NoError(t, err)
+
+	err = emit(cc2.HandleChange, changeStream(ch))
+	require.NoError(t, err)
+
+	dgst, err = cc2.Checksum(context.TODO(), ref, "abc/foo", false)
+	require.NoError(t, err)
+	require.Equal(t, dgstFileData0, dgst)
+
+	dgst, err = cc2.Checksum(context.TODO(), ref, "ln", false)
+	require.NoError(t, err)
+	require.Equal(t, dgstFileData0, dgst)
+
+	dgst, err = cc2.Checksum(context.TODO(), ref, "ln2", false)
+	require.NoError(t, err)
+	require.Equal(t, dgstFileData0, dgst)
+
+	// modify two of the links
+
+	ch = []string{
+		"ADD abc/foo file data1",
+		"ADD ln file >/abc/foo",
+	}
+
+	cc2.linkMap = map[string][][]byte{}
+
+	err = emit(cc2.HandleChange, changeStream(ch))
+	require.NoError(t, err)
+
+	data1Expected := "sha256:c2b5e234f5f38fc5864da7def04782f82501a40d46192e4207d5b3f0c3c4732b"
+
+	dgst, err = cc2.Checksum(context.TODO(), ref, "abc/foo", false)
+	require.NoError(t, err)
+	require.Equal(t, data1Expected, string(dgst))
+
+	dgst, err = cc2.Checksum(context.TODO(), ref, "ln", false)
+	require.NoError(t, err)
+	require.Equal(t, data1Expected, string(dgst))
+
+	dgst, err = cc2.Checksum(context.TODO(), ref, "ln2", false)
+	require.NoError(t, err)
+	require.Equal(t, dgstFileData0, dgst)
+}
+
 func TestChecksumWildcard(t *testing.T) {
 	t.Parallel()
 	tmpdir, err := ioutil.TempDir("", "buildkit-state")
@@ -868,10 +951,10 @@ func (wh *withHash) Digest() digest.Digest {
 	return wh.digest
 }
 
-func writeChanges(p string, inp []*change) error {
+func writeChanges(root string, inp []*change) error {
 	for _, c := range inp {
 		if c.kind == fsutil.ChangeKindAdd {
-			p := filepath.Join(p, c.path)
+			p := filepath.Join(root, c.path)
 			stat, ok := c.fi.Sys().(*fstypes.Stat)
 			if !ok {
 				return errors.Errorf("invalid non-stat change %s", p)
@@ -887,7 +970,11 @@ func writeChanges(p string, inp []*change) error {
 					return err
 				}
 			} else if len(stat.Linkname) > 0 {
-				if err := os.Link(filepath.Join(p, stat.Linkname), p); err != nil {
+				link := filepath.Join(root, stat.Linkname)
+				if !filepath.IsAbs(link) {
+					link = filepath.Join(filepath.Dir(p), stat.Linkname)
+				}
+				if err := os.Link(link, p); err != nil {
 					return err
 				}
 			} else {