diff --git a/src/change_processor.rs b/src/change_processor.rs
index d46e2e80..86176325 100644
--- a/src/change_processor.rs
+++ b/src/change_processor.rs
@@ -86,6 +86,9 @@ impl ChangeProcessor {
         // (non-serve commands). never() blocks forever without selecting.
         let critical_error_receiver =
             critical_error_receiver.unwrap_or_else(crossbeam_channel::never);
+        // Canonicalize project_root so path comparisons work with the
+        // \\?\ prefix that std::fs::canonicalize adds on Windows.
+        let project_root = std::fs::canonicalize(&project_root).unwrap_or(project_root);
         let task = JobThreadContext {
             tree,
             vfs,
@@ -644,8 +647,11 @@ impl JobThreadContext {
                 self.display_path(current_path)
             );
             match current_path.parent() {
-                Some(parent) => current_path = parent,
-                None => break Vec::new(),
+                // Stop walking if we've reached or passed the project root.
+                Some(parent) if parent.starts_with(&self.project_root) => {
+                    current_path = parent;
+                }
+                _ => break Vec::new(),
             }
         };
 
diff --git a/src/snapshot_middleware/project.rs b/src/snapshot_middleware/project.rs
index e73f2719..88deac44 100644
--- a/src/snapshot_middleware/project.rs
+++ b/src/snapshot_middleware/project.rs
@@ -147,7 +147,10 @@ pub fn snapshot_project(
             // We SHOULD NOT mark the project file as a relevant path for any
             // nodes that aren't roots. They'll be updated as part of the project
             // file being updated.
-            snapshot.metadata.relevant_paths.push(path.to_path_buf());
+            snapshot
+                .metadata
+                .relevant_paths
+                .push(vfs.canonicalize(path)?);
 
             Ok(Some(snapshot))
         }