diff --git a/llvm/include/llvm/Support/VirtualFileSystem.h b/llvm/include/llvm/Support/VirtualFileSystem.h
--- a/llvm/include/llvm/Support/VirtualFileSystem.h
+++ b/llvm/include/llvm/Support/VirtualFileSystem.h
@@ -651,9 +651,12 @@
   friend class VFSFromYamlDirIterImpl;
   friend class RedirectingFileSystemParser;
 
-  bool shouldUseExternalFS() const {
-    return ExternalFSValidWD && IsFallthrough;
-  }
+  bool shouldUseExternalFS() const { return IsFallthrough; }
+
+  /// Canonicalize path by removing ".", "..", "./", components. This is
+  /// a VFS request, do not bother about symlinks in the path components
+  /// but canonicalize in order to perform the correct entry search.
+  std::error_code makeCanonical(SmallVectorImpl<char> &Path) const;
 
   // In a RedirectingFileSystem, keys can be specified in Posix or Windows
   // style (or even a mixture of both), so this comparison helper allows
@@ -672,9 +675,6 @@
   /// The current working directory of the file system.
   std::string WorkingDirectory;
 
-  /// Whether the current working directory is valid for the external FS.
-  bool ExternalFSValidWD = false;
-
   /// The file system to use for external references.
   IntrusiveRefCntPtr<FileSystem> ExternalFS;
 
@@ -722,7 +722,7 @@
 
 public:
   /// Looks up \p Path in \c Roots.
-  ErrorOr<Entry *> lookupPath(const Twine &Path) const;
+  ErrorOr<Entry *> lookupPath(StringRef Path) const;
 
   /// Parses \p Buffer, which is expected to be in YAML format and
   /// returns a virtual file system representing its contents.
diff --git a/llvm/lib/Support/VirtualFileSystem.cpp b/llvm/lib/Support/VirtualFileSystem.cpp
--- a/llvm/lib/Support/VirtualFileSystem.cpp
+++ b/llvm/lib/Support/VirtualFileSystem.cpp
@@ -1016,7 +1016,6 @@
     if (auto ExternalWorkingDirectory =
             ExternalFS->getCurrentWorkingDirectory()) {
       WorkingDirectory = *ExternalWorkingDirectory;
-      ExternalFSValidWD = true;
     }
 }
 
@@ -1075,12 +1074,6 @@
   if (!exists(Path))
     return errc::no_such_file_or_directory;
 
-  // Always change the external FS but ignore its result.
-  if (ExternalFS) {
-    auto EC = ExternalFS->setCurrentWorkingDirectory(Path);
-    ExternalFSValidWD = !static_cast<bool>(EC);
-  }
-
   SmallString<128> AbsolutePath;
   Path.toVector(AbsolutePath);
   if (std::error_code EC = makeAbsolute(AbsolutePath))
@@ -1089,8 +1082,14 @@
   return {};
 }
 
-std::error_code RedirectingFileSystem::isLocal(const Twine &Path,
+std::error_code RedirectingFileSystem::isLocal(const Twine &Path_,
                                                bool &Result) {
+  SmallString<256> Path;
+  Path_.toVector(Path);
+
+  if (std::error_code EC = makeCanonical(Path))
+    return {};
+
   return ExternalFS->isLocal(Path, Result);
 }
 
@@ -1125,14 +1124,21 @@
 
 directory_iterator RedirectingFileSystem::dir_begin(const Twine &Dir,
                                                     std::error_code &EC) {
-  ErrorOr<RedirectingFileSystem::Entry *> E = lookupPath(Dir);
+  SmallString<256> Path;
+  Dir.toVector(Path);
+
+  EC = makeCanonical(Path);
+  if (EC)
+    return {};
+
+  ErrorOr<RedirectingFileSystem::Entry *> E = lookupPath(Path);
   if (!E) {
     EC = E.getError();
     if (shouldUseExternalFS() && EC == errc::no_such_file_or_directory)
-      return ExternalFS->dir_begin(Dir, EC);
+      return ExternalFS->dir_begin(Path, EC);
     return {};
   }
-  ErrorOr<Status> S = status(Dir, *E);
+  ErrorOr<Status> S = status(Path, *E);
   if (!S) {
     EC = S.getError();
     return {};
@@ -1145,7 +1151,7 @@
 
   auto *D = cast<RedirectingFileSystem::RedirectingDirectoryEntry>(*E);
   return directory_iterator(std::make_shared<VFSFromYamlDirIterImpl>(
-      Dir, D->contents_begin(), D->contents_end(),
+      Path, D->contents_begin(), D->contents_end(),
       /*IterateExternalFS=*/shouldUseExternalFS(), *ExternalFS, EC));
 }
 
@@ -1739,22 +1745,22 @@
   return FS;
 }
 
-ErrorOr<RedirectingFileSystem::Entry *>
-RedirectingFileSystem::lookupPath(const Twine &Path_) const {
-  SmallString<256> Path;
-  Path_.toVector(Path);
-
-  // Handle relative paths
+std::error_code
+RedirectingFileSystem::makeCanonical(SmallVectorImpl<char> &Path) const {
   if (std::error_code EC = makeAbsolute(Path))
     return EC;
 
-  // Canonicalize path by removing ".", "..", "./", components. This is
-  // a VFS request, do not bother about symlinks in the path components
-  // but canonicalize in order to perform the correct entry search.
-  Path = canonicalize(Path);
-  if (Path.empty())
+  llvm::SmallString<256> CanonicalPath =
+      canonicalize(StringRef(Path.data(), Path.size()));
+  if (CanonicalPath.empty())
     return make_error_code(llvm::errc::invalid_argument);
 
+  Path.assign(CanonicalPath.begin(), CanonicalPath.end());
+  return {};
+}
+
+ErrorOr<RedirectingFileSystem::Entry *>
+RedirectingFileSystem::lookupPath(StringRef Path) const {
   sys::path::const_iterator Start = sys::path::begin(Path);
   sys::path::const_iterator End = sys::path::end(Path);
   for (const auto &Root : Roots) {
@@ -1829,7 +1835,13 @@
   }
 }
 
-ErrorOr<Status> RedirectingFileSystem::status(const Twine &Path) {
+ErrorOr<Status> RedirectingFileSystem::status(const Twine &Path_) {
+  SmallString<256> Path;
+  Path_.toVector(Path);
+
+  if (std::error_code EC = makeCanonical(Path))
+    return EC;
+
   ErrorOr<RedirectingFileSystem::Entry *> Result = lookupPath(Path);
   if (!Result) {
     if (shouldUseExternalFS() &&
@@ -1867,7 +1879,13 @@
 } // namespace
 
 ErrorOr<std::unique_ptr<File>>
-RedirectingFileSystem::openFileForRead(const Twine &Path) {
+RedirectingFileSystem::openFileForRead(const Twine &Path_) {
+  SmallString<256> Path;
+  Path_.toVector(Path);
+
+  if (std::error_code EC = makeCanonical(Path))
+    return EC;
+
   ErrorOr<RedirectingFileSystem::Entry *> E = lookupPath(Path);
   if (!E) {
     if (shouldUseExternalFS() &&
@@ -1897,8 +1915,14 @@
 }
 
 std::error_code
-RedirectingFileSystem::getRealPath(const Twine &Path,
+RedirectingFileSystem::getRealPath(const Twine &Path_,
                                    SmallVectorImpl<char> &Output) const {
+  SmallString<256> Path;
+  Path_.toVector(Path);
+
+  if (std::error_code EC = makeCanonical(Path))
+    return EC;
+
   ErrorOr<RedirectingFileSystem::Entry *> Result = lookupPath(Path);
   if (!Result) {
     if (shouldUseExternalFS() &&
diff --git a/llvm/unittests/Support/VirtualFileSystemTest.cpp b/llvm/unittests/Support/VirtualFileSystemTest.cpp
--- a/llvm/unittests/Support/VirtualFileSystemTest.cpp
+++ b/llvm/unittests/Support/VirtualFileSystemTest.cpp
@@ -2135,7 +2135,41 @@
   EXPECT_TRUE(Status->exists());
 
   Status = FS->status("foo/a");
-  ASSERT_TRUE(Status.getError());
+  ASSERT_FALSE(Status.getError());
+  EXPECT_TRUE(Status->exists());
+}
+
+TEST_F(VFSFromYAMLTest, VirtualWorkingDirectory) {
+  IntrusiveRefCntPtr<ErrorDummyFileSystem> Lower(new ErrorDummyFileSystem());
+  Lower->addDirectory("//root/");
+  Lower->addDirectory("//root/foo");
+  Lower->addRegularFile("//root/foo/a");
+  Lower->addRegularFile("//root/foo/b");
+  Lower->addRegularFile("//root/c");
+  IntrusiveRefCntPtr<vfs::FileSystem> FS = getFromYAMLString(
+      "{ 'use-external-names': false,\n"
+      "  'roots': [\n"
+      "{\n"
+      "  'type': 'directory',\n"
+      "  'name': '//root/bar',\n"
+      "  'contents': [ {\n"
+      "                  'type': 'file',\n"
+      "                  'name': 'a',\n"
+      "                  'external-contents': '//root/foo/a'\n"
+      "                }\n"
+      "              ]\n"
+      "}\n"
+      "]\n"
+      "}",
+      Lower);
+  ASSERT_TRUE(FS.get() != nullptr);
+  std::error_code EC = FS->setCurrentWorkingDirectory("//root/bar");
+  ASSERT_FALSE(EC);
+  ASSERT_TRUE(FS.get() != nullptr);
+
+  llvm::ErrorOr<vfs::Status> Status = FS->status("a");
+  ASSERT_FALSE(Status.getError());
+  EXPECT_TRUE(Status->exists());
 }
 
 TEST_F(VFSFromYAMLTest, YAMLVFSWriterTest) {