diff --git a/phpseclib/Net/SFTP.php b/phpseclib/Net/SFTP.php
index c10fb2be..dac72a65 100644
--- a/phpseclib/Net/SFTP.php
+++ b/phpseclib/Net/SFTP.php
@@ -41,6 +41,7 @@ use phpseclib3\Net\SFTP\OpenFlag;
 use phpseclib3\Net\SFTP\OpenFlag5;
 use phpseclib3\Net\SFTP\PacketType as SFTPPacketType;
 use phpseclib3\Net\SFTP\StatusCode;
+use phpseclib3\Net\SSH2\DisconnectReason;
 use phpseclib3\Net\SSH2\MessageType as SSH2MessageType;
 
 /**
@@ -509,7 +510,15 @@ class SFTP extends SSH2
         }
 
         $this->pwd = true;
-        $this->pwd = $this->realpath('.');
+        try {
+            $this->pwd = $this->realpath('.');
+        } catch (\UnexpectedValueException $e) {
+            if (!$this->canonicalize_paths) {
+                throw $e;
+            }
+            $this->$this->canonicalize_paths = false;
+            $this->reset_connection(DisconnectReason::CONNECTION_LOST);
+        }
 
         $this->update_stat_cache($this->pwd, []);
 
@@ -553,7 +562,9 @@ class SFTP extends SSH2
     }
 
     /**
-     * Enable path canonicalization
+     * Disable path canonicalization
+     *
+     * If this is enabled then $sftp->pwd() will not return the canonicalized absolute path
      *
      */
     public function disablePathCanonicalization()
@@ -636,7 +647,32 @@ class SFTP extends SSH2
         }
 
         if (!$this->canonicalize_paths) {
-            return $path;
+            if ($this->pwd === true) {
+                return '.';
+            }
+            if (!strlen($path) || $path[0] != '/') {
+                $path = $this->pwd . '/' . $path;
+            }
+            $parts = explode('/', $path);
+            $afterPWD = $beforePWD = [];
+            foreach ($parts as $part) {
+                switch ($part) {
+                    //case '': // some SFTP servers /require/ double /'s. see https://github.com/phpseclib/phpseclib/pull/1137
+                    case '.':
+                        break;
+                    case '..':
+                        if (!empty($afterPWD)) {
+                            array_pop($afterPWD);
+                        } else {
+                            $beforePWD[] = '..';
+                        }
+                        break;
+                    default:
+                        $afterPWD[] = $part;
+                }
+            }
+            $beforePWD = count($beforePWD) ? implode('/', $beforePWD) : '.';
+            return $beforePWD . '/' . implode('/', $afterPWD);
         }
 
         if ($this->pwd === true) {