diff --git a/NEWS b/NEWS
index a9776b5..934ae3f 100644
--- a/NEWS
+++ b/NEWS
@@ -1,3 +1,8 @@
+* fuse-overlayfs-1.8.2
+
+- main: fix lookup if underlying path is a symlink, but a directory on
+  a upper directory.
+
 * fuse-overlayfs-1.8.1
 
 - main: fix race when looking up an inode that was renamed.
diff --git a/main.c b/main.c
index e2bd46f..38aed0d 100644
--- a/main.c
+++ b/main.c
@@ -1485,6 +1485,9 @@ make_ovl_node (struct ovl_data *lo, const char *path, struct ovl_layer *layer, c
               int r;
 
               r = it->ds->file_exists (it, whiteout_path);
+              if (r < 0 && errno == EACCES)
+                break;
+
               if (r < 0 && errno != ENOENT && errno != ENOTDIR && errno != ENAMETOOLONG)
                return NULL;
 
@@ -1659,8 +1662,9 @@ load_dir (struct ovl_data *lo, struct ovl_node *n, struct ovl_layer *layer, char
 
   for (it = lo->layers; it && !stop_lookup; it = it->next)
     {
-      int ret;
+      struct stat st;
       DIR *dp = NULL;
+      int ret;
 
       if (n->last_layer == it)
         stop_lookup = true;
@@ -1672,6 +1676,17 @@ load_dir (struct ovl_data *lo, struct ovl_node *n, struct ovl_layer *layer, char
       if (ret == 0)
         break;
 
+      ret = it->ds->statat (it, path, &st, AT_SYMLINK_NOFOLLOW, STATX_TYPE);
+      if (ret < 0)
+        {
+          if (errno == ENOENT || errno == ENOTDIR || errno == ENAMETOOLONG)
+            continue;
+          return NULL;
+        }
+      /* not a directory, stop lookup in lower layers.  */
+      if ((st.st_mode & S_IFMT) != S_IFDIR)
+        break;
+
       dp = it->ds->opendir (it, path);
       if (dp == NULL)
         continue;
@@ -1720,6 +1735,8 @@ load_dir (struct ovl_data *lo, struct ovl_node *n, struct ovl_layer *layer, char
           strconcat3 (node_path, PATH_MAX, n->path, "/", dent->d_name);
 
           ret = it->ds->file_exists (it, whiteout_path);
+          if (ret < 0 && errno == EACCES)
+            continue;
           if (ret < 0 && errno != ENOENT && errno != ENOTDIR && errno != ENAMETOOLONG)
             {
               it->ds->closedir (dp);
@@ -2020,7 +2037,7 @@ do_lookup_file (struct ovl_data *lo, fuse_ino_t parent, const char *name)
             {
               int saved_errno = errno;
 
-              if (errno == ENOENT || errno == ENOTDIR)
+              if (errno == ENOENT || errno == ENOTDIR || errno == EACCES)
                 {
                   if (node)
                     continue;
diff --git a/tests/fedora-installs.sh b/tests/fedora-installs.sh
index 7f63480..c59d9b3 100755
--- a/tests/fedora-installs.sh
+++ b/tests/fedora-installs.sh
@@ -48,14 +48,14 @@ mkdir upper workdir lower
 fuse-overlayfs -o sync=0,lowerdir=lower,upperdir=upper,workdir=workdir,suid,dev merged
 
 # https://github.com/containers/fuse-overlayfs/issues/86
-docker run --rm -v $(pwd)/merged:/merged centos:8 yum --installroot /merged -y --releasever 8 install https://dl.fedoraproject.org/pub/epel/epel-release-latest-8.noarch.rpm
+docker run --rm -v $(pwd)/merged:/merged quay.io/centos/centos:stream8 yum --installroot /merged -y --releasever 8 install https://dl.fedoraproject.org/pub/epel/epel-release-latest-8.noarch.rpm
 
 umount merged
 
 # fast_ino_check
 fuse-overlayfs -o fast_ino_check=1,sync=0,lowerdir=lower,upperdir=upper,workdir=workdir,suid,dev merged
 
-docker run --rm -v $(pwd)/merged:/merged centos:8 yum --installroot /merged -y --releasever 8 install nano
+docker run --rm -v $(pwd)/merged:/merged quay.io/centos/centos:stream8 yum --installroot /merged -y --releasever 8 install nano
 
 mkdir merged/a-directory
 
@@ -251,5 +251,17 @@ test \! -e upper/a/b
 mknod merged/dev-foo c 10 175
 attr -l merged/dev-foo
 
-umount merged
+# https://github.com/containers/fuse-overlayfs/issues/337
+umount -l merged
 
+rm -rf lower upper workdir merged
+mkdir lower upper workdir merged
+
+mkdir upper/foo
+ln -s not/existing lower/foo
+
+fuse-overlayfs -o lowerdir=lower,upperdir=upper,workdir=workdir merged
+
+stat merged/foo
+
+umount merged