From 90fcc2cf69e18cb627d23b706cf27c2c24186d1a Mon Sep 17 00:00:00 2001
From: Sarah French <sarah.french@hashicorp.com>
Date: Mon, 18 May 2026 16:33:10 +0100
Subject: [PATCH] fix: Prevent provider binary being placed outside of
 .terraform/providers cache unexpectedly due to use of symlinks.

---
 .changes/v1.15/BUG FIXES-20260518-164938.yaml |  5 ++
 .../command/e2etest/providers_tamper_test.go  | 52 +++++++++++++++++++
 internal/providercache/package_install.go     |  9 ++++
 3 files changed, 66 insertions(+)
 create mode 100644 .changes/v1.15/BUG FIXES-20260518-164938.yaml

diff --git a/.changes/v1.15/BUG FIXES-20260518-164938.yaml b/.changes/v1.15/BUG FIXES-20260518-164938.yaml
new file mode 100644
index 0000000000..344708eff7
--- /dev/null
+++ b/.changes/v1.15/BUG FIXES-20260518-164938.yaml	
@@ -0,0 +1,5 @@
+kind: BUG FIXES
+body: 'init: Prevent provider binaries from being installed into symlinked directories'
+time: 2026-05-18T16:49:38.375301+01:00
+custom:
+    Issue: "38611"
diff --git a/internal/command/e2etest/providers_tamper_test.go b/internal/command/e2etest/providers_tamper_test.go
index 1336088d60..ba912640b9 100644
--- a/internal/command/e2etest/providers_tamper_test.go
+++ b/internal/command/e2etest/providers_tamper_test.go
@@ -10,6 +10,7 @@ import (
 	"strings"
 	"testing"
 
+	"github.com/hashicorp/terraform/internal/addrs"
 	"github.com/hashicorp/terraform/internal/e2e"
 	"github.com/hashicorp/terraform/internal/getproviders"
 )
@@ -271,3 +272,54 @@ terraform {
   }
 }
 `
+
+func TestSymlinkProviderTargetDirectory(t *testing.T) {
+	// This test reaches out to releases.hashicorp.com to download the
+	// null provider, so it can only run if network access is allowed.
+	skipIfCannotAccessNetwork(t)
+
+	fixturePath := filepath.Join("testdata", "provider-tampering-base")
+	tf := e2e.NewBinary(t, terraformBin, fixturePath)
+
+	// Create a directory that will be symlinked to inside the plugin cache directory.
+	//
+	// If the provider is downloaded without protections against symlinks present,
+	// the binary will be downloaded to ./other-dir, not the expected
+	// ./terraform/providers/registry.terraform.io/hashicorp/null/3.1.0/<platform>/ location
+	otherDir := tf.Path("other-dir")
+	err := os.MkdirAll(otherDir, 0755)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	const providerVersion = "3.1.0" // must match the version in the fixture config
+	symlinkPathInCache := tf.Path(
+		".terraform",
+		"providers",
+		addrs.DefaultProviderRegistryHost.String(),
+		"hashicorp",
+		"null",
+		providerVersion,
+		getproviders.CurrentPlatform.String(),
+	)
+
+	err = os.MkdirAll(filepath.Dir(symlinkPathInCache), 0755)
+	if err != nil {
+		t.Fatal(err)
+	}
+	err = os.Symlink(otherDir, symlinkPathInCache)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	stdout, stderr, err := tf.Run("init", "-no-color")
+	if err == nil {
+		t.Fatalf("unexpected init success\nstdout:\n%s\nstderr:\n%s", stdout, stderr)
+	}
+	if !strings.Contains(stderr, "Failed to install provider") {
+		t.Fatalf("missing expected error message\nstderr:\n%s", stderr)
+	}
+	if !strings.Contains(stderr, "symlink") {
+		t.Fatalf("missing expected error message\nstderr:\n%s", stderr)
+	}
+}
diff --git a/internal/providercache/package_install.go b/internal/providercache/package_install.go
index eea592ece4..ba9ec404b3 100644
--- a/internal/providercache/package_install.go
+++ b/internal/providercache/package_install.go
@@ -124,6 +124,15 @@ func installFromLocalArchive(ctx context.Context, meta getproviders.PackageMeta,
 	// match the allowed hashes and so our caller should catch that after
 	// we return if so.
 
+	// We will, however, check that the target directory the provider binary will be
+	// placed isn't a symlink, if it already exists. This could be a security risk that
+	// enables files to be written to unexpected locations.
+	if fi, err := os.Lstat(targetDir); err == nil {
+		if fi.Mode().Type() == os.ModeSymlink {
+			return authResult, fmt.Errorf("cannot install package into target directory %s because it is a symlink.", targetDir)
+		}
+	}
+
 	err := unzip.Decompress(targetDir, filename, true, 0000)
 	if err != nil {
 		return authResult, err