diff --git a/cli/npm/managed/mod.rs b/cli/npm/managed/mod.rs
index 829750c0a9..1479643e72 100644
--- a/cli/npm/managed/mod.rs
+++ b/cli/npm/managed/mod.rs
@@ -522,6 +522,8 @@ impl NpmResolver for ManagedCliNpmResolver {
     let path = self
       .fs_resolver
       .resolve_package_folder_from_package(name, referrer, mode)?;
+    let path =
+      canonicalize_path_maybe_not_exists_with_fs(&path, self.fs.as_ref())?;
     log::debug!("Resolved {} from {} to {}", name, referrer, path.display());
     Ok(path)
   }
diff --git a/tests/specs/README.md b/tests/specs/README.md
index d04adbb62e..a23fa1ce6f 100644
--- a/tests/specs/README.md
+++ b/tests/specs/README.md
@@ -87,6 +87,7 @@ Within the file, you can use the following for matching:
 
 - `[WILDCARD]` - match any text at the wildcard
 - `[WILDLINE]` - match any text on the current line
+- `[WILDCHAR]` - match the next character
 - `[WILDCHARS(5)]` - match any of the next 5 characters
 - `[UNORDERED_START]` followed by many lines then `[UNORDERED_END]` will match
   the lines in any order (useful for non-deterministic output)
diff --git a/tests/specs/npm/local_dir_no_duplicate_resolution/__test__.jsonc b/tests/specs/npm/local_dir_no_duplicate_resolution/__test__.jsonc
new file mode 100644
index 0000000000..f7cc70f155
--- /dev/null
+++ b/tests/specs/npm/local_dir_no_duplicate_resolution/__test__.jsonc
@@ -0,0 +1,5 @@
+{
+  "tempDir": true,
+  "args": "run -A --log-level=debug main.tsx",
+  "output": "main.out"
+}
diff --git a/tests/specs/npm/local_dir_no_duplicate_resolution/deno.json b/tests/specs/npm/local_dir_no_duplicate_resolution/deno.json
new file mode 100644
index 0000000000..ae2f9c1ae8
--- /dev/null
+++ b/tests/specs/npm/local_dir_no_duplicate_resolution/deno.json
@@ -0,0 +1,11 @@
+{
+  "nodeModulesDir": true,
+  "imports": {
+    "preact": "npm:preact",
+    "preact-render-to-string": "npm:preact-render-to-string"
+  },
+  "compilerOptions": {
+    "jsx": "react-jsx",
+    "jsxImportSource": "preact"
+  }
+}
diff --git a/tests/specs/npm/local_dir_no_duplicate_resolution/main.out b/tests/specs/npm/local_dir_no_duplicate_resolution/main.out
new file mode 100644
index 0000000000..c2141bd7e9
--- /dev/null
+++ b/tests/specs/npm/local_dir_no_duplicate_resolution/main.out
@@ -0,0 +1,5 @@
+[WILDCARD]Resolved preact from file:///[WILDLINE]/preact@10.19.6/node_modules/preact/jsx-runtime/dist/jsxRuntime.mjs to [WILDLINE]node_modules[WILDCHAR].deno[WILDCHAR]preact@10.19.6[WILDCHAR]node_modules[WILDCHAR]preact
+DEBUG RS - [WILDLINE] - Resolved preact from file:///[WILDLINE]/preact@10.19.6/node_modules/preact/hooks/dist/hooks.mjs to [WILDLINE]node_modules[WILDCHAR].deno[WILDCHAR]preact@10.19.6[WILDCHAR]node_modules[WILDCHAR]preact
+[# ensure that preact is resolving to .deno/preact@10.19.6/node_modules/preact and not .deno/preact-render-to-string@6.4.0/node_modules/preact]
+DEBUG RS - [WILDLINE] - Resolved preact from file:///[WILDLINE]/preact-render-to-string@6.4.0/node_modules/preact-render-to-string/dist/index.mjs to [WILDLINE]node_modules[WILDCHAR].deno[WILDCHAR]preact@10.19.6[WILDCHAR]node_modules[WILDCHAR]preact
+[WILDCARD]
diff --git a/tests/specs/npm/local_dir_no_duplicate_resolution/main.tsx b/tests/specs/npm/local_dir_no_duplicate_resolution/main.tsx
new file mode 100644
index 0000000000..efb95ec901
--- /dev/null
+++ b/tests/specs/npm/local_dir_no_duplicate_resolution/main.tsx
@@ -0,0 +1,10 @@
+// this previously was ending up with two preacts and would crash
+import { useMemo } from "preact/hooks";
+import renderToString from "preact-render-to-string";
+
+function Test() {
+  useMemo(() => "test", []);
+  return <div>Test</div>;
+}
+
+const html = renderToString(<Test />);
diff --git a/tests/util/server/src/lib.rs b/tests/util/server/src/lib.rs
index 6bc7291996..febbb20665 100644
--- a/tests/util/server/src/lib.rs
+++ b/tests/util/server/src/lib.rs
@@ -897,7 +897,7 @@ fn parse_wildcard_pattern_text(
   enum InnerPart<'a> {
     Wildcard,
     Wildline,
-    Wildnum(usize),
+    Wildchars(usize),
     UnorderedLines(Vec<&'a str>),
     Char,
   }
@@ -921,7 +921,12 @@ fn parse_wildcard_pattern_text(
         Ok((input, value))
       }
 
-      fn parse_wild_num(input: &str) -> ParseResult<usize> {
+      fn parse_wild_char(input: &str) -> ParseResult<()> {
+        let (input, _) = tag("[WILDCHAR]")(input)?;
+        ParseResult::Ok((input, ()))
+      }
+
+      fn parse_wild_chars(input: &str) -> ParseResult<usize> {
         let (input, _) = tag("[WILDCHARS(")(input)?;
         let (input, times) = parse_num(input)?;
         let (input, _) = tag(")]")(input)?;
@@ -929,10 +934,11 @@ fn parse_wildcard_pattern_text(
       }
 
       while !self.current_input.is_empty() {
-        let (next_input, inner_part) = or5(
+        let (next_input, inner_part) = or6(
           map(tag("[WILDCARD]"), |_| InnerPart::Wildcard),
           map(tag("[WILDLINE]"), |_| InnerPart::Wildline),
-          map(parse_wild_num, InnerPart::Wildnum),
+          map(parse_wild_char, |_| InnerPart::Wildchars(1)),
+          map(parse_wild_chars, InnerPart::Wildchars),
           map(parse_unordered_lines, |lines| {
             InnerPart::UnorderedLines(lines)
           }),
@@ -947,7 +953,7 @@ fn parse_wildcard_pattern_text(
             self.queue_previous_text(next_input);
             self.parts.push(WildcardPatternPart::Wildline);
           }
-          InnerPart::Wildnum(times) => {
+          InnerPart::Wildchars(times) => {
             self.queue_previous_text(next_input);
             self.parts.push(WildcardPatternPart::Wildnum(times));
           }