diff --git a/lib/ansible/inventory/__init__.py b/lib/ansible/inventory/__init__.py
index 2bcea0f351..0edb4dc386 100644
--- a/lib/ansible/inventory/__init__.py
+++ b/lib/ansible/inventory/__init__.py
@@ -660,11 +660,11 @@ class Inventory(object):
             # FIXME: these should go to VariableManager
             if group and host is None:
                 # load vars in dir/group_vars/name_of_group
-                base_path = os.path.join(basedir, "group_vars/%s" % group.name)
+                base_path = os.path.realpath(os.path.join(basedir, "group_vars/%s" % group.name))
                 results = self._variable_manager.add_group_vars_file(base_path, self._loader)
             elif host and group is None:
                 # same for hostvars in dir/host_vars/name_of_host
-                base_path = os.path.join(basedir, "host_vars/%s" % host.name)
+                base_path = os.path.realpath(os.path.join(basedir, "host_vars/%s" % host.name))
                 results = self._variable_manager.add_host_vars_file(base_path, self._loader)
 
         # all done, results is a dictionary of variables for this particular host.