diff --git a/System/Directory/Internal/Windows.hsc b/System/Directory/Internal/Windows.hsc
index 1bc99c18..2696971d 100644
--- a/System/Directory/Internal/Windows.hsc
+++ b/System/Directory/Internal/Windows.hsc
@@ -356,7 +356,8 @@ fromExtendedLengthPath ePath' =
       | (toChar <$> [c1, c2, c3, c4]) == "\\\\?\\" ->
       case path of
         c5 : c6 : c7 : subpath@(c8 : _)
-          | (toChar <$> [c5, c6, c7, c8]) == "UNC\\" -> pack subpath
+          | (toChar <$> [c5, c6, c7, c8]) == "UNC\\" ->
+            os "\\" <> pack subpath
         drive : col : subpath
           -- if the path is not "regular", then the prefix is necessary
           -- to ensure the path is interpreted literally
diff --git a/changelog.md b/changelog.md
index 67a13397..9a4cce2b 100644
--- a/changelog.md
+++ b/changelog.md
@@ -1,10 +1,12 @@
 Changelog for the [`directory`][1] package
 ==========================================
 
-## 1.3.8.3 (TBD)
+## 1.3.8.3 (Jan 2024)
 
   * Relax `Win32` version bounds to support 2.14.0.0.
     ([#166](https://github.com/haskell/directory/issues/166))
+  * Fix regression in `canonicalizePath` on Windows UNC paths.
+    ([#170](https://github.com/haskell/directory/issues/170))
 
 ## 1.3.8.2 (Dec 2023)
 
diff --git a/directory.cabal b/directory.cabal
index eb81bb69..05008345 100644
--- a/directory.cabal
+++ b/directory.cabal
@@ -1,6 +1,6 @@
 cabal-version:  2.2
 name:           directory
-version:        1.3.8.2
+version:        1.3.8.3
 license:        BSD-3-Clause
 license-file:   LICENSE
 maintainer:     libraries@haskell.org
diff --git a/tests/CanonicalizePath.hs b/tests/CanonicalizePath.hs
index 03a3ba76..81e303c8 100644
--- a/tests/CanonicalizePath.hs
+++ b/tests/CanonicalizePath.hs
@@ -160,3 +160,14 @@ main _t = do
     vldn <- canonicalizePath "verylongdirectoryname"
     vldn2 <- canonicalizePath "VERYLONGDIRECTORYNAME"
     T(expectEq) () vldn vldn2
+
+  let isWindows =
+#if defined(mingw32_HOST_OS)
+        True
+#else
+        False
+#endif
+
+  when isWindows $ do
+    -- https://github.com/haskell/directory/issues/170
+    T(expectEq) () "\\\\localhost" =<< canonicalizePath "\\\\localhost"