diff --git a/.changeset/great-jeans-teach.md b/.changeset/great-jeans-teach.md
new file mode 100644
index 00000000000..f5cb36f82ae
--- /dev/null
+++ b/.changeset/great-jeans-teach.md
@@ -0,0 +1,5 @@
+---
+"@pnpm/directory-fetcher": major
+---
+
+@pnpm/logger added to peer dependencies.
diff --git a/.changeset/young-toes-talk.md b/.changeset/young-toes-talk.md
new file mode 100644
index 00000000000..f7178d9a6e3
--- /dev/null
+++ b/.changeset/young-toes-talk.md
@@ -0,0 +1,6 @@
+---
+"@pnpm/directory-fetcher": patch
+"pnpm": patch
+---
+
+Installation shouldn't fail when the injected dependency has broken symlinks. The broken symlinks should be just skipped [#5598](https://github.com/pnpm/pnpm/issues/5598).
diff --git a/packages/directory-fetcher/package.json b/packages/directory-fetcher/package.json
index 25a20905c9b..f8bbf4fbeb3 100644
--- a/packages/directory-fetcher/package.json
+++ b/packages/directory-fetcher/package.json
@@ -30,6 +30,9 @@
     "url": "https://github.com/pnpm/pnpm/issues"
   },
   "homepage": "https://github.com/pnpm/pnpm/blob/main/packages/directory-fetcher#readme",
+  "peerDependencies": {
+    "@pnpm/logger": "^5.0.0"
+  },
   "dependencies": {
     "@pnpm/fetcher-base": "workspace:*",
     "@pnpm/read-project-manifest": "workspace:*",
diff --git a/packages/directory-fetcher/src/index.ts b/packages/directory-fetcher/src/index.ts
index 5a702a35e8c..8e7938b563e 100644
--- a/packages/directory-fetcher/src/index.ts
+++ b/packages/directory-fetcher/src/index.ts
@@ -1,10 +1,13 @@
-import { promises as fs } from 'fs'
+import { promises as fs, Stats } from 'fs'
 import path from 'path'
 import type { DirectoryFetcher, DirectoryFetcherOptions } from '@pnpm/fetcher-base'
+import { logger } from '@pnpm/logger'
 import { safeReadProjectManifestOnly } from '@pnpm/read-project-manifest'
 import fromPairs from 'ramda/src/fromPairs'
 import packlist from 'npm-packlist'
 
+const directoryFetcherLogger = logger('directory-fetcher')
+
 export interface CreateDirectoryFetcherOptions {
   includeOnlyPackageFiles?: boolean
 }
@@ -65,7 +68,17 @@ async function _fetchAllFilesFromDir (
     .filter((file) => file !== 'node_modules')
     .map(async (file) => {
       const filePath = path.join(dir, file)
-      const stat = await fs.stat(filePath)
+      let stat: Stats
+      try {
+        stat = await fs.stat(filePath)
+      } catch (err: any) { // eslint-disable-line @typescript-eslint/no-explicit-any
+        // Broken symlinks are skipped
+        if (err.code === 'ENOENT') {
+          directoryFetcherLogger.debug({ brokenSymlink: filePath })
+          return
+        }
+        throw err
+      }
       const relativeSubdir = `${relativeDir}${relativeDir ? '/' : ''}${file}`
       if (stat.isDirectory()) {
         const subFilesIndex = await _fetchAllFilesFromDir(filePath, relativeSubdir)
diff --git a/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/index.js b/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/index.js
new file mode 100644
index 00000000000..e69de29bb2d
diff --git a/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/not-exists b/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/not-exists
new file mode 120000
index 00000000000..a11a2d2d855
--- /dev/null
+++ b/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/not-exists
@@ -0,0 +1 @@
+broken-symlink
\ No newline at end of file
diff --git a/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/package.json b/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/package.json
new file mode 100644
index 00000000000..6fea5f21a37
--- /dev/null
+++ b/packages/directory-fetcher/test/fixtures/pkg-with-broken-symlink/package.json
@@ -0,0 +1,4 @@
+{
+  "name": "simple-pkg",
+  "version": "0.0.0"
+}
diff --git a/packages/directory-fetcher/test/index.ts b/packages/directory-fetcher/test/index.ts
index 998c50c2843..2cc3ccb5176 100644
--- a/packages/directory-fetcher/test/index.ts
+++ b/packages/directory-fetcher/test/index.ts
@@ -1,9 +1,15 @@
 /// <reference path="../../../typings/index.d.ts"/>
 import path from 'path'
 import { createDirectoryFetcher } from '@pnpm/directory-fetcher'
+// @ts-expect-error
+import { debug } from '@pnpm/logger'
 import { fixtures } from '@pnpm/test-fixtures'
 
 const f = fixtures(__dirname)
+jest.mock('@pnpm/logger', () => {
+  const debug = jest.fn()
+  return ({ debug, logger: () => ({ debug }) })
+})
 
 test('fetch including only package files', async () => {
   process.chdir(f.find('simple-pkg'))
@@ -79,3 +85,28 @@ test('fetch a directory that has no package.json', async () => {
     'index.js',
   ])
 })
+
+test('fetch does not fail on package with broken symlink', async () => {
+  debug.mockClear()
+  process.chdir(f.find('pkg-with-broken-symlink'))
+  const fetcher = createDirectoryFetcher()
+
+  // eslint-disable-next-line
+  const fetchResult = await fetcher.directory({} as any, {
+    directory: '.',
+    type: 'directory',
+  }, {
+    lockfileDir: process.cwd(),
+  })
+
+  expect(fetchResult.local).toBe(true)
+  expect(fetchResult.packageImportMethod).toBe('hardlink')
+  expect(fetchResult.filesIndex['package.json']).toBe(path.resolve('package.json'))
+
+  // Only those files are included which would get published
+  expect(Object.keys(fetchResult.filesIndex).sort()).toStrictEqual([
+    'index.js',
+    'package.json',
+  ])
+  expect(debug).toHaveBeenCalledWith({ brokenSymlink: path.resolve('not-exists') })
+})
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index 134b4215712..c1f22bd3290 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -1047,6 +1047,9 @@ importers:
       '@pnpm/fetcher-base':
         specifier: workspace:*
         version: link:../fetcher-base
+      '@pnpm/logger':
+        specifier: ^5.0.0
+        version: 5.0.0
       '@pnpm/read-project-manifest':
         specifier: workspace:*
         version: link:../read-project-manifest