diff --git a/.yarn/versions/b764a694.yml b/.yarn/versions/b764a694.yml
new file mode 100644
index 000000000000..bd3ff1a3f753
--- /dev/null
+++ b/.yarn/versions/b764a694.yml
@@ -0,0 +1,23 @@
+releases:
+  "@yarnpkg/cli": patch
+  "@yarnpkg/plugin-nm": patch
+
+declined:
+  - "@yarnpkg/plugin-compat"
+  - "@yarnpkg/plugin-constraints"
+  - "@yarnpkg/plugin-dlx"
+  - "@yarnpkg/plugin-essentials"
+  - "@yarnpkg/plugin-init"
+  - "@yarnpkg/plugin-interactive-tools"
+  - "@yarnpkg/plugin-npm-cli"
+  - "@yarnpkg/plugin-pack"
+  - "@yarnpkg/plugin-patch"
+  - "@yarnpkg/plugin-pnp"
+  - "@yarnpkg/plugin-pnpm"
+  - "@yarnpkg/plugin-stage"
+  - "@yarnpkg/plugin-typescript"
+  - "@yarnpkg/plugin-version"
+  - "@yarnpkg/plugin-workspace-tools"
+  - "@yarnpkg/builder"
+  - "@yarnpkg/core"
+  - "@yarnpkg/doctor"
diff --git a/CHANGELOG.md b/CHANGELOG.md
index 982e0371c88a..a045c4d73eac 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,7 @@ Features in `master` can be tried out by running `yarn set version from sources`
 :::
 
 - Fixes `preferInteractive` forcing interactive mode in non-TTY environments.
+- `node-modules` linker now honors user-defined symlinks for `<workspace>/node_modules` directories
 
 ## 4.1.0
 
diff --git a/packages/acceptance-tests/pkg-tests-specs/sources/node-modules.test.ts b/packages/acceptance-tests/pkg-tests-specs/sources/node-modules.test.ts
index aede1541894c..90e10566c18b 100644
--- a/packages/acceptance-tests/pkg-tests-specs/sources/node-modules.test.ts
+++ b/packages/acceptance-tests/pkg-tests-specs/sources/node-modules.test.ts
@@ -1855,6 +1855,47 @@ describe(`Node_Modules`, () => {
       }),
   );
 
+  it(`should work with user-created <workspace>/node_modules symlinks`,
+    makeTemporaryEnv(
+      {
+        workspaces: [`ws`],
+        dependencies: {
+        },
+      },
+      {
+        nodeLinker: `node-modules`,
+        nmHoistingLimits: `workspaces`,
+      },
+      async ({path, run}) => {
+        await xfs.mkdirpPromise(ppath.join(path, `ws`));
+        const trueInstallDir = ppath.resolve(path, `target`);
+        await xfs.mkdirPromise(trueInstallDir);
+
+        await xfs.writeJsonPromise(ppath.join(path, `ws/${Filename.manifest}`), {
+          name: `ws`,
+          devDependencies: {
+            [`no-deps`]: `1.0.0`,
+          },
+        });
+
+        await xfs.symlinkPromise(trueInstallDir, ppath.join(path, `ws/node_modules`));
+
+        await run(`install`);
+
+        expect(xfs.existsSync(ppath.join(trueInstallDir, `no-deps`))).toBeTruthy();
+        expect(xfs.lstatSync(ppath.join(path, `ws/node_modules`)).isSymbolicLink()).toBeTruthy();
+
+        await xfs.writeJsonPromise(ppath.join(path, `ws/${Filename.manifest}`), {
+          name: `ws`,
+        });
+
+        await run(`install`);
+
+        expect(xfs.existsSync(ppath.join(trueInstallDir, `no-deps`))).toBeFalsy();
+        expect(xfs.lstatSync(ppath.join(path, `ws/node_modules`)).isSymbolicLink()).toBeTruthy();
+      }),
+  );
+
   it(`should support supportedArchitectures`,
     makeTemporaryEnv(
       {
diff --git a/packages/plugin-nm/sources/NodeModulesLinker.ts b/packages/plugin-nm/sources/NodeModulesLinker.ts
index 15d23f5e5e59..4c404cfb28d9 100644
--- a/packages/plugin-nm/sources/NodeModulesLinker.ts
+++ b/packages/plugin-nm/sources/NodeModulesLinker.ts
@@ -525,15 +525,15 @@ async function findInstallState(project: Project, {unrollAliases = false}: {unro
   return {locatorMap, binSymlinks, locationTree: buildLocationTree(locatorMap, {skipPrefix: project.cwd}), nmMode, mtimeMs: stats.mtimeMs};
 }
 
-const removeDir = async (dir: PortablePath, options: {contentsOnly: boolean, innerLoop?: boolean, allowSymlink?: boolean}): Promise<any> => {
+const removeDir = async (dir: PortablePath, options: {contentsOnly: boolean, innerLoop?: boolean, isWorkspaceDir?: boolean}): Promise<any> => {
   if (dir.split(ppath.sep).indexOf(NODE_MODULES) < 0)
     throw new Error(`Assertion failed: trying to remove dir that doesn't contain node_modules: ${dir}`);
 
   try {
+    let dirStats;
     if (!options.innerLoop) {
-      const stats = options.allowSymlink ? await xfs.statPromise(dir) : await xfs.lstatPromise(dir);
-      if (options.allowSymlink && !stats.isDirectory() ||
-        (!options.allowSymlink && stats.isSymbolicLink())) {
+      dirStats = await xfs.lstatPromise(dir);
+      if ((!dirStats.isDirectory() && !dirStats.isSymbolicLink()) || (dirStats.isSymbolicLink() && !options.isWorkspaceDir)) {
         await xfs.unlinkPromise(dir);
         return;
       }
@@ -549,7 +549,9 @@ const removeDir = async (dir: PortablePath, options: {contentsOnly: boolean, inn
         await xfs.unlinkPromise(targetPath);
       }
     }
-    if (!options.contentsOnly) {
+
+    const isExternalWorkspaceSymlink = !options.innerLoop && options.isWorkspaceDir && dirStats?.isSymbolicLink();
+    if (!options.contentsOnly && !isExternalWorkspaceSymlink) {
       await xfs.rmdirPromise(dir);
     }
   } catch (e) {
@@ -1133,8 +1135,8 @@ async function persistNodeModules(preinstallState: InstallState, installState: N
       if (prevNode.children.has(NODE_MODULES))
         await removeDir(ppath.join(location, NODE_MODULES), {contentsOnly: false});
 
-      const isRootNmLocation = ppath.basename(location) === NODE_MODULES && locationTree.has(ppath.join(ppath.dirname(location), ppath.sep));
-      await removeDir(location, {contentsOnly: location === rootNmDirPath, allowSymlink: isRootNmLocation});
+      const isWorkspaceNmLocation = ppath.basename(location) === NODE_MODULES && prevLocationTree.has(ppath.join(ppath.dirname(location)));
+      await removeDir(location, {contentsOnly: location === rootNmDirPath, isWorkspaceDir: isWorkspaceNmLocation});
     } else {
       for (const [segment, prevChildNode] of prevNode.children) {
         const childNode = node.children.get(segment);
@@ -1164,8 +1166,8 @@ async function persistNodeModules(preinstallState: InstallState, installState: N
 
       // 1. If new directory is a symlink, we need to remove it fully
       // 2. If new directory is a hardlink - we just need to clean it up
-      const isRootNmLocation = ppath.basename(location) === NODE_MODULES && locationTree.has(ppath.join(ppath.dirname(location), ppath.sep));
-      await removeDir(location, {contentsOnly: node.linkType === LinkType.HARD, allowSymlink: isRootNmLocation});
+      const isWorkspaceNmLocation = ppath.basename(location) === NODE_MODULES && locationTree.has(ppath.join(ppath.dirname(location)));
+      await removeDir(location, {contentsOnly: node.linkType === LinkType.HARD, isWorkspaceDir: isWorkspaceNmLocation});
     } else {
       if (!areRealLocatorsEqual(node.locator, prevNode.locator))
         await removeDir(location, {contentsOnly: node.linkType === LinkType.HARD});