diff --git a/Cargo.lock b/Cargo.lock
index 215d06903..ee12166db 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -2414,7 +2414,6 @@ dependencies = [
  "figment",
  "futures",
  "humantime",
- "inotify",
  "jsonschema",
  "k8s-openapi",
  "kube",
@@ -2422,6 +2421,7 @@ dependencies = [
  "log",
  "nid",
  "nix 0.29.0",
+ "notify",
  "nuid",
  "once_cell",
  "opentelemetry",
@@ -2807,6 +2807,18 @@ dependencies = [
  "version_check",
 ]
 
+[[package]]
+name = "filetime"
+version = "0.2.26"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "bc0505cd1b6fa6580283f6bdf70a73fcf4aba1184038c90902b92b3dd0df63ed"
+dependencies = [
+ "cfg-if 1.0.3",
+ "libc",
+ "libredox",
+ "windows-sys 0.60.2",
+]
+
 [[package]]
 name = "find-msvc-tools"
 version = "0.1.2"
@@ -2930,6 +2942,15 @@ version = "1.3.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "42703706b716c37f96a77aea830392ad231f44c9e9a67872fa5548707e11b11c"
 
+[[package]]
+name = "fsevent-sys"
+version = "4.1.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "76ee7a02da4d231650c7cea31349b889be2f45ddb3ef3032d2ec8185f6313fd2"
+dependencies = [
+ "libc",
+]
+
 [[package]]
 name = "fuchsia-zircon"
 version = "0.3.3"
@@ -4053,15 +4074,13 @@ checksum = "c8fae54786f62fb2918dcfae3d568594e50eb9b5c25bf04371af6fe7516452fb"
 
 [[package]]
 name = "inotify"
-version = "0.11.0"
+version = "0.9.6"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "f37dccff2791ab604f9babef0ba14fbe0be30bd368dc541e2b08d07c8aa908f3"
+checksum = "f8069d3ec154eb856955c1c0fbffefbf5f3c40a104ec912d4797314c1801abff"
 dependencies = [
- "bitflags 2.9.4",
- "futures-core",
+ "bitflags 1.3.2",
  "inotify-sys",
  "libc",
- "tokio",
 ]
 
 [[package]]
@@ -4436,6 +4455,26 @@ dependencies = [
  "winapi-build",
 ]
 
+[[package]]
+name = "kqueue"
+version = "1.1.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "eac30106d7dce88daf4a3fcb4879ea939476d5074a9b7ddd0fb97fa4bed5596a"
+dependencies = [
+ "kqueue-sys",
+ "libc",
+]
+
+[[package]]
+name = "kqueue-sys"
+version = "1.0.4"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "ed9625ffda8729b85e45cf04090035ac368927b8cebc34898e7c120f52e4838b"
+dependencies = [
+ "bitflags 1.3.2",
+ "libc",
+]
+
 [[package]]
 name = "kube"
 version = "2.0.1"
@@ -4658,6 +4697,7 @@ checksum = "416f7e718bdb06000964960ffa43b4335ad4012ae8b99060261aa4a8088d5ccb"
 dependencies = [
  "bitflags 2.9.4",
  "libc",
+ "redox_syscall",
 ]
 
 [[package]]
@@ -5614,6 +5654,24 @@ version = "0.3.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "0676bb32a98c1a483ce53e500a81ad9c3d5b3f7c920c28c24e9cb0980d0b5bc8"
 
+[[package]]
+name = "notify"
+version = "6.1.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "6205bd8bb1e454ad2e27422015fb5e4f2bcc7e08fa8f27058670d208324a4d2d"
+dependencies = [
+ "bitflags 2.9.4",
+ "filetime",
+ "fsevent-sys",
+ "inotify",
+ "kqueue",
+ "libc",
+ "log",
+ "mio 0.8.11",
+ "walkdir",
+ "windows-sys 0.48.0",
+]
+
 [[package]]
 name = "ntapi"
 version = "0.4.1"
diff --git a/lib/bindings/python/Cargo.lock b/lib/bindings/python/Cargo.lock
index ad6f4b54c..34345b2ae 100644
--- a/lib/bindings/python/Cargo.lock
+++ b/lib/bindings/python/Cargo.lock
@@ -1687,13 +1687,13 @@ dependencies = [
  "figment",
  "futures",
  "humantime",
- "inotify",
  "k8s-openapi",
  "kube",
  "local-ip-address",
  "log",
  "nid",
  "nix",
+ "notify",
  "nuid",
  "once_cell",
  "opentelemetry",
@@ -1991,6 +1991,18 @@ dependencies = [
  "version_check",
 ]
 
+[[package]]
+name = "filetime"
+version = "0.2.26"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "bc0505cd1b6fa6580283f6bdf70a73fcf4aba1184038c90902b92b3dd0df63ed"
+dependencies = [
+ "cfg-if 1.0.3",
+ "libc",
+ "libredox",
+ "windows-sys 0.60.2",
+]
+
 [[package]]
 name = "fixedbitset"
 version = "0.5.7"
@@ -2045,6 +2057,15 @@ version = "1.3.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "42703706b716c37f96a77aea830392ad231f44c9e9a67872fa5548707e11b11c"
 
+[[package]]
+name = "fsevent-sys"
+version = "4.1.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "76ee7a02da4d231650c7cea31349b889be2f45ddb3ef3032d2ec8185f6313fd2"
+dependencies = [
+ "libc",
+]
+
 [[package]]
 name = "fuchsia-zircon"
 version = "0.3.3"
@@ -2970,15 +2991,13 @@ checksum = "c8fae54786f62fb2918dcfae3d568594e50eb9b5c25bf04371af6fe7516452fb"
 
 [[package]]
 name = "inotify"
-version = "0.11.0"
+version = "0.9.6"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "f37dccff2791ab604f9babef0ba14fbe0be30bd368dc541e2b08d07c8aa908f3"
+checksum = "f8069d3ec154eb856955c1c0fbffefbf5f3c40a104ec912d4797314c1801abff"
 dependencies = [
- "bitflags 2.9.3",
- "futures-core",
+ "bitflags 1.3.2",
  "inotify-sys",
  "libc",
- "tokio",
 ]
 
 [[package]]
@@ -3261,6 +3280,26 @@ dependencies = [
  "winapi-build",
 ]
 
+[[package]]
+name = "kqueue"
+version = "1.1.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "eac30106d7dce88daf4a3fcb4879ea939476d5074a9b7ddd0fb97fa4bed5596a"
+dependencies = [
+ "kqueue-sys",
+ "libc",
+]
+
+[[package]]
+name = "kqueue-sys"
+version = "1.0.4"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "ed9625ffda8729b85e45cf04090035ac368927b8cebc34898e7c120f52e4838b"
+dependencies = [
+ "bitflags 1.3.2",
+ "libc",
+]
+
 [[package]]
 name = "kube"
 version = "2.0.1"
@@ -3434,6 +3473,7 @@ checksum = "391290121bad3d37fbddad76d8f5d1c1c314cfc646d143d7e07a3086ddff0ce3"
 dependencies = [
  "bitflags 2.9.3",
  "libc",
+ "redox_syscall",
 ]
 
 [[package]]
@@ -3717,6 +3757,18 @@ dependencies = [
  "winapi 0.2.8",
 ]
 
+[[package]]
+name = "mio"
+version = "0.8.11"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "a4a650543ca06a924e8b371db273b2756685faae30f8487da1b56505a8f78b0c"
+dependencies = [
+ "libc",
+ "log",
+ "wasi 0.11.1+wasi-snapshot-preview1",
+ "windows-sys 0.48.0",
+]
+
 [[package]]
 name = "mio"
 version = "1.0.4"
@@ -3930,6 +3982,24 @@ version = "0.3.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "0676bb32a98c1a483ce53e500a81ad9c3d5b3f7c920c28c24e9cb0980d0b5bc8"
 
+[[package]]
+name = "notify"
+version = "6.1.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "6205bd8bb1e454ad2e27422015fb5e4f2bcc7e08fa8f27058670d208324a4d2d"
+dependencies = [
+ "bitflags 2.9.3",
+ "filetime",
+ "fsevent-sys",
+ "inotify",
+ "kqueue",
+ "libc",
+ "log",
+ "mio 0.8.11",
+ "walkdir",
+ "windows-sys 0.48.0",
+]
+
 [[package]]
 name = "nu-ansi-term"
 version = "0.46.0"
@@ -7552,6 +7622,15 @@ dependencies = [
  "windows-link 0.1.3",
 ]
 
+[[package]]
+name = "windows-sys"
+version = "0.48.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "677d2418bec65e3338edb076e806bc1ec15693c5d0104683f2efe857f61056a9"
+dependencies = [
+ "windows-targets 0.48.5",
+]
+
 [[package]]
 name = "windows-sys"
 version = "0.52.0"
@@ -7579,6 +7658,21 @@ dependencies = [
  "windows-targets 0.53.3",
 ]
 
+[[package]]
+name = "windows-targets"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "9a2fa6e2155d7247be68c096456083145c183cbbbc2764150dda45a87197940c"
+dependencies = [
+ "windows_aarch64_gnullvm 0.48.5",
+ "windows_aarch64_msvc 0.48.5",
+ "windows_i686_gnu 0.48.5",
+ "windows_i686_msvc 0.48.5",
+ "windows_x86_64_gnu 0.48.5",
+ "windows_x86_64_gnullvm 0.48.5",
+ "windows_x86_64_msvc 0.48.5",
+]
+
 [[package]]
 name = "windows-targets"
 version = "0.52.6"
@@ -7612,6 +7706,12 @@ dependencies = [
  "windows_x86_64_msvc 0.53.0",
 ]
 
+[[package]]
+name = "windows_aarch64_gnullvm"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "2b38e32f0abccf9987a4e3079dfb67dcd799fb61361e53e2882c3cbaf0d905d8"
+
 [[package]]
 name = "windows_aarch64_gnullvm"
 version = "0.52.6"
@@ -7624,6 +7724,12 @@ version = "0.53.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "86b8d5f90ddd19cb4a147a5fa63ca848db3df085e25fee3cc10b39b6eebae764"
 
+[[package]]
+name = "windows_aarch64_msvc"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "dc35310971f3b2dbbf3f0690a219f40e2d9afcf64f9ab7cc1be722937c26b4bc"
+
 [[package]]
 name = "windows_aarch64_msvc"
 version = "0.52.6"
@@ -7636,6 +7742,12 @@ version = "0.53.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "c7651a1f62a11b8cbd5e0d42526e55f2c99886c77e007179efff86c2b137e66c"
 
+[[package]]
+name = "windows_i686_gnu"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "a75915e7def60c94dcef72200b9a8e58e5091744960da64ec734a6c6e9b3743e"
+
 [[package]]
 name = "windows_i686_gnu"
 version = "0.52.6"
@@ -7660,6 +7772,12 @@ version = "0.53.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "9ce6ccbdedbf6d6354471319e781c0dfef054c81fbc7cf83f338a4296c0cae11"
 
+[[package]]
+name = "windows_i686_msvc"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "8f55c233f70c4b27f66c523580f78f1004e8b5a8b659e05a4eb49d4166cca406"
+
 [[package]]
 name = "windows_i686_msvc"
 version = "0.52.6"
@@ -7672,6 +7790,12 @@ version = "0.53.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "581fee95406bb13382d2f65cd4a908ca7b1e4c2f1917f143ba16efe98a589b5d"
 
+[[package]]
+name = "windows_x86_64_gnu"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "53d40abd2583d23e4718fddf1ebec84dbff8381c07cae67ff7768bbf19c6718e"
+
 [[package]]
 name = "windows_x86_64_gnu"
 version = "0.52.6"
@@ -7684,6 +7808,12 @@ version = "0.53.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "2e55b5ac9ea33f2fc1716d1742db15574fd6fc8dadc51caab1c16a3d3b4190ba"
 
+[[package]]
+name = "windows_x86_64_gnullvm"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "0b7b52767868a23d5bab768e390dc5f5c55825b6d30b86c844ff2dc7414044cc"
+
 [[package]]
 name = "windows_x86_64_gnullvm"
 version = "0.52.6"
@@ -7696,6 +7826,12 @@ version = "0.53.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "0a6e035dd0599267ce1ee132e51c27dd29437f63325753051e71dd9e42406c57"
 
+[[package]]
+name = "windows_x86_64_msvc"
+version = "0.48.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "ed94fce61571a4006852b7389a063ab983c02eb1bb37b47f8272ce92d06d9538"
+
 [[package]]
 name = "windows_x86_64_msvc"
 version = "0.52.6"
diff --git a/lib/runtime/Cargo.toml b/lib/runtime/Cargo.toml
index 42770ef10..b98cd8550 100644
--- a/lib/runtime/Cargo.toml
+++ b/lib/runtime/Cargo.toml
@@ -64,7 +64,7 @@ bincode = { version = "1" }
 console-subscriber = { version = "0.4", optional = true }
 educe = { version = "0.6.0" }
 figment = { version = "0.10.19", features = ["env", "json", "toml", "test"] }
-inotify = { version = "0.11" }
+notify = { version = "6.1", default-features = false, features = ["macos_fsevent"] }
 local-ip-address = { version = "0.6.3" }
 log = { version = "0.4" }
 nid = { version = "3.0.0", features = ["serde"] }
diff --git a/lib/runtime/src/storage/key_value_store/file.rs b/lib/runtime/src/storage/key_value_store/file.rs
index 392d403a2..0b9f20a32 100644
--- a/lib/runtime/src/storage/key_value_store/file.rs
+++ b/lib/runtime/src/storage/key_value_store/file.rs
@@ -14,7 +14,7 @@ use std::{collections::HashMap, pin::Pin};
 use anyhow::Context as _;
 use async_trait::async_trait;
 use futures::StreamExt;
-use inotify::{Event, EventMask, EventStream, Inotify, WatchMask};
+use notify::{Config, Event, EventKind, RecommendedWatcher, RecursiveMode, Watcher};
 use parking_lot::Mutex;
 
 use crate::storage::key_value_store::KeyValue;
@@ -117,8 +117,10 @@ pub struct Directory {
 
 impl Directory {
     fn new(root: PathBuf, p: PathBuf) -> Self {
+        // Canonicalize root to handle symlinks (e.g., /var -> /private/var on macOS)
+        let canonical_root = root.canonicalize().unwrap_or_else(|_| root.clone());
         Directory {
-            root,
+            root: canonical_root,
             p,
             owned_files: Arc::new(Mutex::new(HashSet::new())),
         }
@@ -197,64 +199,88 @@ impl KeyValueBucket for Directory {
     async fn watch(
         &self,
     ) -> Result<Pin<Box<dyn futures::Stream<Item = WatchEvent> + Send + 'life0>>, StoreError> {
-        let inotify = Inotify::init().map_err(to_fs_err)?;
-        inotify
-            .watches()
-            .add(
-                &self.p,
-                WatchMask::MODIFY | WatchMask::CREATE | WatchMask::DELETE,
-            )
+        let (tx, mut rx) = tokio::sync::mpsc::channel(128);
+
+        let mut watcher = RecommendedWatcher::new(
+            move |res: Result<Event, notify::Error>| {
+                if let Err(err) = tx.blocking_send(res) {
+                    tracing::error!(error = %err, "Failed to send file watch event");
+                }
+            },
+            Config::default(),
+        )
+        .map_err(to_fs_err)?;
+
+        watcher
+            .watch(&self.p, RecursiveMode::NonRecursive)
             .map_err(to_fs_err)?;
 
         let dir = self.p.clone();
+        let root = self.root.clone();
+
         Ok(Box::pin(async_stream::stream! {
-            let mut buffer = [0; 1024];
-            let mut events = match inotify.into_event_stream(&mut buffer) {
-                Ok(events) => events,
-                Err(err) => {
-                    tracing::error!(error = %err, "Failed getting event stream from inotify");
-                    return;
-                }
-            };
-            while let Some(Ok(event)) = events.next().await {
-                let Some(name) = event.name else {
-                    tracing::warn!("Unexpected event on the directory itself");
-                    continue;
-                };
-                let item_path = dir.join(name);
-                let key = match item_path.strip_prefix(&self.root) {
-                    Ok(stripped) => stripped.display().to_string().replace("_", "/"),
+            // Keep watcher alive for the duration of the stream
+            let _watcher = watcher;
+
+            while let Some(event_result) = rx.recv().await {
+                let event = match event_result {
+                    Ok(event) => event,
                     Err(err) => {
-                        // Possibly this should be a panic.
-                        // A key cannot be outside the file store root.
-                        tracing::error!(
-                            error = %err,
-                            item_path = %item_path.display(),
-                            root = %self.root.display(),
-                            "Item in file store is not prefixed with file store root. Should be impossible. Ignoring invalid key.");
+                        tracing::error!(error = %err, "Failed receiving file watch event");
                         continue;
                     }
                 };
 
-                match event.mask {
-                    EventMask::MODIFY | EventMask::CREATE => {
-                        let data: bytes::Bytes = match fs::read(&item_path) {
-                            Ok(data) => data.into(),
-                            Err(err) => {
-                                tracing::warn!(error = %err, item = %item_path.display(), "Failed reading event item. Skipping.");
-                                continue;
-                            }
-                        };
-                        let item = KeyValue::new(key, data);
-                        yield WatchEvent::Put(item);
-                    }
-                    EventMask::DELETE => {
-                        yield WatchEvent::Delete(Key::from_raw(key));
-                    }
-                    event_type => {
-                        tracing::warn!(?event_type, dir = %dir.display(), "Unexpected event type");
+                for item_path in event.paths {
+                    // Skip if the event is for the directory itself
+                    if item_path == dir {
+                        tracing::warn!("Unexpected event on the directory itself");
                         continue;
                     }
+
+                    // Canonicalize paths to handle symlinks (e.g., /var -> /private/var on macOS)
+                    let canonical_item_path = match item_path.canonicalize() {
+                        Ok(p) => p,
+                        Err(err) => {
+                            tracing::warn!(error = %err, item = %item_path.display(), "Failed to canonicalize path. Using original path.");
+                            item_path.clone()
+                        }
+                    };
+
+                    let key = match canonical_item_path.strip_prefix(&root) {
+                        Ok(stripped) => stripped.display().to_string().replace("_", "/"),
+                        Err(err) => {
+                            // Possibly this should be a panic.
+                            // A key cannot be outside the file store root.
+                            tracing::error!(
+                                error = %err,
+                                item_path = %canonical_item_path.display(),
+                                root = %root.display(),
+                                "Item in file store is not prefixed with file store root. Should be impossible. Ignoring invalid key.");
+                            continue;
+                        }
+                    };
+
+                    match event.kind {
+                        EventKind::Create(_) | EventKind::Modify(_) => {
+                            let data: bytes::Bytes = match fs::read(&item_path) {
+                                Ok(data) => data.into(),
+                                Err(err) => {
+                                    tracing::warn!(error = %err, item = %item_path.display(), "Failed reading event item. Skipping.");
+                                    continue;
+                                }
+                            };
+                            let item = KeyValue::new(key, data);
+                            yield WatchEvent::Put(item);
+                        }
+                        EventKind::Remove(_) => {
+                            yield WatchEvent::Delete(Key::from_raw(key));
+                        }
+                        event_type => {
+                            tracing::debug!(?event_type, dir = %dir.display(), "Ignoring event type");
+                            continue;
+                        }
+                    }
                 }
             }
         }))