diff --git a/internal/runtime/docker.go b/internal/runtime/docker.go
index 40360f2..b3408c5 100644
--- a/internal/runtime/docker.go
+++ b/internal/runtime/docker.go
@@ -64,9 +64,40 @@ func probeSocket(candidates ...string) string {
 	return ""
 }
 
+// isVM reports whether the Docker daemon is running inside a VM (e.g., Colima, OrbStack).
+// In these cases the socket is remapped inside the VM and the container sees it at
+// /var/run/docker.sock even if the CLI connects via a user-scoped socket path.
+func (d *DockerRuntime) isVM() bool {
+	host := d.client.DaemonHost()
+	if strings.HasPrefix(host, "unix://") {
+		socketPath := strings.TrimPrefix(host, "unix://")
+		// Check for known VM-based Docker socket locations
+		home, _ := os.UserHomeDir()
+		vmSockets := []string{
+			filepath.Join(home, ".colima", "default", "docker.sock"),
+			filepath.Join(home, ".colima", "docker.sock"),
+			filepath.Join(home, ".orbstack", "run", "docker.sock"),
+		}
+		for _, vmSock := range vmSockets {
+			if socketPath == vmSock {
+				return true
+			}
+		}
+	}
+	return false
+}
+
+// SocketPath returns the daemon-visible Unix socket path to bind-mount into
+// containers so LocalStack can launch nested workloads such as Lambda functions.
+// For VM-based Docker (Colima, OrbStack) returns /var/run/docker.sock as the
+// socket is remapped inside the VM. For rootless or custom setups, returns the
+// actual socket path extracted from the daemon host.
 func (d *DockerRuntime) SocketPath() string {
 	host := d.client.DaemonHost()
 	if strings.HasPrefix(host, "unix://") {
+		if d.isVM() {
+			return "/var/run/docker.sock"
+		}
 		return strings.TrimPrefix(host, "unix://")
 	}
 	return ""
diff --git a/internal/runtime/docker_test.go b/internal/runtime/docker_test.go
index f76ec5e..31a1f17 100644
--- a/internal/runtime/docker_test.go
+++ b/internal/runtime/docker_test.go
@@ -41,11 +41,26 @@ func TestProbeSocket_ReturnsEmptyForNoCandidates(t *testing.T) {
 }
 
 func TestSocketPath_ExtractsUnixPath(t *testing.T) {
-	cli, err := client.NewClientWithOpts(client.WithHost("unix:///home/user/.colima/default/docker.sock"))
-	require.NoError(t, err)
-	rt := &DockerRuntime{client: cli}
-
-	assert.Equal(t, "/home/user/.colima/default/docker.sock", rt.SocketPath())
+	t.Run("standard socket returns daemon path", func(t *testing.T) {
+		cli, err := client.NewClientWithOpts(client.WithHost("unix:///var/run/docker.sock"))
+		require.NoError(t, err)
+		rt := &DockerRuntime{client: cli}
+		assert.Equal(t, "/var/run/docker.sock", rt.SocketPath())
+	})
+
+	t.Run("non-standard socket returns daemon path", func(t *testing.T) {
+		cli, err := client.NewClientWithOpts(client.WithHost("unix:///home/user/.colima/default/docker.sock"))
+		require.NoError(t, err)
+		rt := &DockerRuntime{client: cli}
+		assert.Equal(t, "/home/user/.colima/default/docker.sock", rt.SocketPath())
+	})
+
+	t.Run("orbstack socket returns daemon path", func(t *testing.T) {
+		cli, err := client.NewClientWithOpts(client.WithHost("unix:///Users/user/.orbstack/run/docker.sock"))
+		require.NoError(t, err)
+		rt := &DockerRuntime{client: cli}
+		assert.Equal(t, "/Users/user/.orbstack/run/docker.sock", rt.SocketPath())
+	})
 }
 
 func TestSocketPath_ReturnsEmptyForTCPHost(t *testing.T) {
@@ -56,6 +71,57 @@ func TestSocketPath_ReturnsEmptyForTCPHost(t *testing.T) {
 	assert.Equal(t, "", rt.SocketPath())
 }
 
+func TestSocketPath_VMDetection(t *testing.T) {
+	home := t.TempDir()
+	t.Setenv("HOME", home)
+
+	t.Run("colima socket exists returns remapped path", func(t *testing.T) {
+		colimaSock := filepath.Join(home, ".colima", "default", "docker.sock")
+		require.NoError(t, os.MkdirAll(filepath.Dir(colimaSock), 0o755))
+		f, err := os.Create(colimaSock)
+		require.NoError(t, err)
+		require.NoError(t, f.Close())
+		t.Cleanup(func() {
+			require.NoError(t, os.Remove(colimaSock))
+		})
+
+		cli, err := client.NewClientWithOpts(client.WithHost("unix://" + colimaSock))
+		require.NoError(t, err)
+		rt := &DockerRuntime{client: cli}
+		assert.Equal(t, "/var/run/docker.sock", rt.SocketPath())
+	})
+
+	t.Run("orbstack socket exists returns remapped path", func(t *testing.T) {
+		orbstackSock := filepath.Join(home, ".orbstack", "run", "docker.sock")
+		require.NoError(t, os.MkdirAll(filepath.Dir(orbstackSock), 0o755))
+		f, err := os.Create(orbstackSock)
+		require.NoError(t, err)
+		require.NoError(t, f.Close())
+		t.Cleanup(func() {
+			require.NoError(t, os.Remove(orbstackSock))
+		})
+
+		cli, err := client.NewClientWithOpts(client.WithHost("unix://" + orbstackSock))
+		require.NoError(t, err)
+		rt := &DockerRuntime{client: cli}
+		assert.Equal(t, "/var/run/docker.sock", rt.SocketPath())
+	})
+
+	t.Run("rootless socket exists returns actual path", func(t *testing.T) {
+		// Use a non-VM socket path (short path to avoid Docker client limit)
+		rootlessSock := "/tmp/lstk-docker.sock"
+		require.NoError(t, os.WriteFile(rootlessSock, nil, 0o600))
+		t.Cleanup(func() {
+			require.NoError(t, os.Remove(rootlessSock))
+		})
+
+		cli, err := client.NewClientWithOpts(client.WithHost("unix://" + rootlessSock))
+		require.NoError(t, err)
+		rt := &DockerRuntime{client: cli}
+		assert.Equal(t, rootlessSock, rt.SocketPath())
+	})
+}
+
 func TestWindowsDockerStartCommand_DockerAvailable(t *testing.T) {
 	lookPath := func(string) (string, error) { return "/usr/bin/docker", nil }
 	assert.Equal(t, "docker desktop start", windowsDockerStartCommand(func(string) string { return "" }, lookPath))
diff --git a/test/integration/start_test.go b/test/integration/start_test.go
index 008f27d..da9cdb9 100644
--- a/test/integration/start_test.go
+++ b/test/integration/start_test.go
@@ -172,6 +172,8 @@ func TestStartCommandSetsUpContainerCorrectly(t *testing.T) {
 
 		assert.True(t, hasBindTarget(inspect.HostConfig.Binds, "/var/run/docker.sock"),
 			"expected Docker socket bind mount to /var/run/docker.sock, got: %v", inspect.HostConfig.Binds)
+		assert.True(t, hasBindSource(inspect.HostConfig.Binds, "/var/run/docker.sock"),
+			"expected Docker socket bind mount from /var/run/docker.sock, got: %v", inspect.HostConfig.Binds)
 
 		envVars := containerEnvToMap(inspect.Config.Env)
 		assert.Equal(t, "unix:///var/run/docker.sock", envVars["DOCKER_HOST"])
@@ -247,6 +249,16 @@ func hasBindTarget(binds []string, containerPath string) bool {
 	return false
 }
 
+func hasBindSource(binds []string, hostPath string) bool {
+	for _, b := range binds {
+		parts := strings.Split(b, ":")
+		if len(parts) >= 2 && parts[0] == hostPath {
+			return true
+		}
+	}
+	return false
+}
+
 func cleanup() {
 	ctx := context.Background()
 	_ = dockerClient.ContainerStop(ctx, containerName, container.StopOptions{})