diff --git a/.vscode/cspell.dictionaries/jargon.wordlist.txt b/.vscode/cspell.dictionaries/jargon.wordlist.txt
index 232266427..34abfc511 100644
--- a/.vscode/cspell.dictionaries/jargon.wordlist.txt
+++ b/.vscode/cspell.dictionaries/jargon.wordlist.txt
@@ -50,6 +50,7 @@ iflags
 kibi
 kibibytes
 lcase
+lossily
 mebi
 mebibytes
 mergeable
diff --git a/.vscode/cspell.dictionaries/workspace.wordlist.txt b/.vscode/cspell.dictionaries/workspace.wordlist.txt
index aec4b4a42..82cbbe15f 100644
--- a/.vscode/cspell.dictionaries/workspace.wordlist.txt
+++ b/.vscode/cspell.dictionaries/workspace.wordlist.txt
@@ -321,3 +321,6 @@ uucore_procs
 uumain
 uutil
 uutils
+
+# * function names
+getcwd
diff --git a/src/uu/pwd/src/pwd.rs b/src/uu/pwd/src/pwd.rs
index 75dc637e6..e8f0c0013 100644
--- a/src/uu/pwd/src/pwd.rs
+++ b/src/uu/pwd/src/pwd.rs
@@ -10,28 +10,115 @@ extern crate uucore;
 
 use clap::{crate_version, App, Arg};
 use std::env;
-use std::io;
+use std::io::{self, Write};
 use std::path::{Path, PathBuf};
 
-use uucore::error::{FromIo, UResult, USimpleError};
+use uucore::error::{FromIo, UResult};
 
 static ABOUT: &str = "Display the full filename of the current working directory.";
 static OPT_LOGICAL: &str = "logical";
 static OPT_PHYSICAL: &str = "physical";
 
-pub fn absolute_path(path: &Path) -> io::Result<PathBuf> {
-    let path_buf = path.canonicalize()?;
+fn physical_path() -> io::Result<PathBuf> {
+    // std::env::current_dir() is a thin wrapper around libc's getcwd().
 
+    // On Unix, getcwd() must return the physical path:
+    // https://pubs.opengroup.org/onlinepubs/9699919799/functions/getcwd.html
+    #[cfg(unix)]
+    {
+        env::current_dir()
+    }
+
+    // On Windows we have to resolve it.
+    // On other systems we also resolve it, just in case.
+    #[cfg(not(unix))]
+    {
+        env::current_dir().and_then(|path| path.canonicalize())
+    }
+}
+
+fn logical_path() -> io::Result<PathBuf> {
+    // getcwd() on Windows seems to include symlinks, so this is easy.
     #[cfg(windows)]
-    let path_buf = Path::new(
-        path_buf
-            .as_path()
-            .to_string_lossy()
-            .trim_start_matches(r"\\?\"),
-    )
-    .to_path_buf();
+    {
+        env::current_dir()
+    }
 
-    Ok(path_buf)
+    // If we're not on Windows we do things Unix-style.
+    //
+    // Typical Unix-like kernels don't actually keep track of the logical working
+    // directory. They know the precise directory a process is in, and the getcwd()
+    // syscall reconstructs a path from that.
+    //
+    // The logical working directory is maintained by the shell, in the $PWD
+    // environment variable. So we check carefully if that variable looks
+    // reasonable, and if not then we fall back to the physical path.
+    //
+    // POSIX: https://pubs.opengroup.org/onlinepubs/9699919799/utilities/pwd.html
+    #[cfg(not(windows))]
+    {
+        fn looks_reasonable(path: &Path) -> bool {
+            // First, check if it's an absolute path.
+            if !path.has_root() {
+                return false;
+            }
+
+            // Then, make sure there are no . or .. components.
+            // Path::components() isn't useful here, it normalizes those out.
+
+            // to_string_lossy() may allocate, but that's fine, we call this
+            // only once per run. It may also lose information, but not any
+            // information that we need for this check.
+            if path
+                .to_string_lossy()
+                .split(std::path::is_separator)
+                .any(|piece| piece == "." || piece == "..")
+            {
+                return false;
+            }
+
+            // Finally, check if it matches the directory we're in.
+            #[cfg(unix)]
+            {
+                use std::fs::metadata;
+                use std::os::unix::fs::MetadataExt;
+                let path_info = match metadata(path) {
+                    Ok(info) => info,
+                    Err(_) => return false,
+                };
+                let real_info = match metadata(".") {
+                    Ok(info) => info,
+                    Err(_) => return false,
+                };
+                if path_info.dev() != real_info.dev() || path_info.ino() != real_info.ino() {
+                    return false;
+                }
+            }
+
+            #[cfg(not(unix))]
+            {
+                use std::fs::canonicalize;
+                let canon_path = match canonicalize(path) {
+                    Ok(path) => path,
+                    Err(_) => return false,
+                };
+                let real_path = match canonicalize(".") {
+                    Ok(path) => path,
+                    Err(_) => return false,
+                };
+                if canon_path != real_path {
+                    return false;
+                }
+            }
+
+            true
+        }
+
+        match env::var_os("PWD").map(PathBuf::from) {
+            Some(value) if looks_reasonable(&value) => Ok(value),
+            _ => env::current_dir(),
+        }
+    }
 }
 
 fn usage() -> String {
@@ -43,24 +130,48 @@ pub fn uumain(args: impl uucore::Args) -> UResult<()> {
     let usage = usage();
 
     let matches = uu_app().usage(&usage[..]).get_matches_from(args);
+    let cwd = if matches.is_present(OPT_LOGICAL) {
+        logical_path()
+    } else {
+        physical_path()
+    }
+    .map_err_context(|| "failed to get current directory".to_owned())?;
 
-    match env::current_dir() {
-        Ok(logical_path) => {
-            if matches.is_present(OPT_LOGICAL) {
-                println!("{}", logical_path.display());
-            } else {
-                let physical_path = absolute_path(&logical_path)
-                    .map_err_context(|| "failed to get absolute path".to_string())?;
-                println!("{}", physical_path.display());
-            }
-        }
-        Err(e) => {
-            return Err(USimpleError::new(
-                1,
-                format!("failed to get current directory {}", e),
-            ))
-        }
-    };
+    // \\?\ is a prefix Windows gives to paths under certain circumstances,
+    // including when canonicalizing them.
+    // With the right extension trait we can remove it non-lossily, but
+    // we print it lossily anyway, so no reason to bother.
+    #[cfg(windows)]
+    let cwd = cwd
+        .to_string_lossy()
+        .strip_prefix(r"\\?\")
+        .map(Into::into)
+        .unwrap_or(cwd);
+
+    print_path(&cwd).map_err_context(|| "failed to print current directory".to_owned())?;
+
+    Ok(())
+}
+
+fn print_path(path: &Path) -> io::Result<()> {
+    let stdout = io::stdout();
+    let mut stdout = stdout.lock();
+
+    // On Unix we print non-lossily.
+    #[cfg(unix)]
+    {
+        use std::os::unix::ffi::OsStrExt;
+        stdout.write_all(path.as_os_str().as_bytes())?;
+        stdout.write_all(b"\n")?;
+    }
+
+    // On other platforms we potentially mangle it.
+    // There might be some clever way to do it correctly on Windows, but
+    // invalid unicode in filenames is rare there.
+    #[cfg(not(unix))]
+    {
+        writeln!(stdout, "{}", path.display())?;
+    }
 
     Ok(())
 }
@@ -79,6 +190,7 @@ pub fn uu_app() -> App<'static, 'static> {
             Arg::with_name(OPT_PHYSICAL)
                 .short("P")
                 .long(OPT_PHYSICAL)
+                .overrides_with(OPT_LOGICAL)
                 .help("avoid all symlinks"),
         )
 }
diff --git a/tests/by-util/test_pwd.rs b/tests/by-util/test_pwd.rs
index 2779b9e62..bc08ddbb0 100644
--- a/tests/by-util/test_pwd.rs
+++ b/tests/by-util/test_pwd.rs
@@ -1,9 +1,13 @@
+// spell-checker:ignore (words) symdir somefakedir
+
+use std::path::PathBuf;
+
 use crate::common::util::*;
 
 #[test]
 fn test_default() {
     let (at, mut ucmd) = at_and_ucmd!();
-    ucmd.run().stdout_is(at.root_dir_resolved() + "\n");
+    ucmd.succeeds().stdout_is(at.root_dir_resolved() + "\n");
 }
 
 #[test]
@@ -11,3 +15,118 @@ fn test_failed() {
     let (_at, mut ucmd) = at_and_ucmd!();
     ucmd.arg("will-fail").fails();
 }
+
+#[cfg(unix)]
+#[test]
+fn test_deleted_dir() {
+    use std::process::Command;
+
+    let ts = TestScenario::new(util_name!());
+    let at = ts.fixtures.clone();
+    let output = Command::new("sh")
+        .arg("-c")
+        .arg(format!(
+            "cd '{}'; mkdir foo; cd foo; rmdir ../foo; exec {} {}",
+            at.root_dir_resolved(),
+            ts.bin_path.to_str().unwrap(),
+            ts.util_name,
+        ))
+        .output()
+        .unwrap();
+    assert!(!output.status.success());
+    assert!(output.stdout.is_empty());
+    assert_eq!(
+        output.stderr,
+        b"pwd: failed to get current directory: No such file or directory\n"
+    );
+}
+
+struct Env {
+    ucmd: UCommand,
+    #[cfg(not(windows))]
+    root: String,
+    subdir: String,
+    symdir: String,
+}
+
+fn symlinked_env() -> Env {
+    let (at, mut ucmd) = at_and_ucmd!();
+    at.mkdir("subdir");
+    // Note: on Windows this requires admin permissions
+    at.symlink_dir("subdir", "symdir");
+    let root = PathBuf::from(at.root_dir_resolved());
+    ucmd.raw.current_dir(root.join("symdir"));
+    #[cfg(not(windows))]
+    ucmd.env("PWD", root.join("symdir"));
+    Env {
+        ucmd,
+        #[cfg(not(windows))]
+        root: root.to_string_lossy().into_owned(),
+        subdir: root.join("subdir").to_string_lossy().into_owned(),
+        symdir: root.join("symdir").to_string_lossy().into_owned(),
+    }
+}
+
+#[test]
+fn test_symlinked_logical() {
+    let mut env = symlinked_env();
+    env.ucmd.arg("-L").succeeds().stdout_is(env.symdir + "\n");
+}
+
+#[test]
+fn test_symlinked_physical() {
+    let mut env = symlinked_env();
+    env.ucmd.arg("-P").succeeds().stdout_is(env.subdir + "\n");
+}
+
+#[test]
+fn test_symlinked_default() {
+    let mut env = symlinked_env();
+    env.ucmd.succeeds().stdout_is(env.subdir + "\n");
+}
+
+#[cfg(not(windows))]
+pub mod untrustworthy_pwd_var {
+    use std::path::Path;
+
+    use super::*;
+
+    #[test]
+    fn test_nonexistent_logical() {
+        let (at, mut ucmd) = at_and_ucmd!();
+        ucmd.arg("-L")
+            .env("PWD", "/somefakedir")
+            .succeeds()
+            .stdout_is(at.root_dir_resolved() + "\n");
+    }
+
+    #[test]
+    fn test_wrong_logical() {
+        let mut env = symlinked_env();
+        env.ucmd
+            .arg("-L")
+            .env("PWD", env.root)
+            .succeeds()
+            .stdout_is(env.subdir + "\n");
+    }
+
+    #[test]
+    fn test_redundant_logical() {
+        let mut env = symlinked_env();
+        env.ucmd
+            .arg("-L")
+            .env("PWD", Path::new(&env.symdir).join("."))
+            .succeeds()
+            .stdout_is(env.subdir + "\n");
+    }
+
+    #[test]
+    fn test_relative_logical() {
+        let mut env = symlinked_env();
+        env.ucmd
+            .arg("-L")
+            .env("PWD", ".")
+            .succeeds()
+            .stdout_is(env.subdir + "\n");
+    }
+}
diff --git a/tests/common/macros.rs b/tests/common/macros.rs
index 62b8c4824..108bc0fb7 100644
--- a/tests/common/macros.rs
+++ b/tests/common/macros.rs
@@ -31,7 +31,11 @@ macro_rules! path_concat {
 #[macro_export]
 macro_rules! util_name {
     () => {
-        module_path!().split("_").nth(1).expect("no test name")
+        module_path!()
+            .split("_")
+            .nth(1)
+            .and_then(|s| s.split("::").next())
+            .expect("no test name")
     };
 }