How to resolve symbolic links in a shell script

readlink -f "$path"

Editor’s note: The above works with GNU readlink and FreeBSD/PC-BSD/OpenBSD readlink, but not on OS X as of 10.11.
GNU readlink offers additional, related options, such as -m for resolving a symlink whether or not the ultimate target exists.

Note since GNU coreutils 8.15 (2012-01-06), there is a realpath program available that is less obtuse and more flexible than the above. It’s also compatible with the FreeBSD util of the same name. It also includes functionality to generate a relative path between two files.

realpath $path

[Admin addition below from comment by halloleodanorton]

For Mac OS X (through at least 10.11.x), use readlink without the -f option:

readlink $path

Editor’s note: This will not resolve symlinks recursively and thus won’t report the ultimate target; e.g., given symlink a that points to b, which in turn points to c, this will only report b (and won’t ensure that it is output as an absolute path).
Use the following perl command on OS X to fill the gap of the missing readlink -f functionality:
perl -MCwd -le 'print Cwd::abs_path(shift)' "$path"

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