diff --git a/fastapi_mcp/openapi/utils.py b/fastapi_mcp/openapi/utils.py
index 1821d57..6edcec2 100644
--- a/fastapi_mcp/openapi/utils.py
+++ b/fastapi_mcp/openapi/utils.py
@@ -16,42 +16,60 @@ def get_single_param_type_from_schema(param_schema: Dict[str, Any]) -> str:
     return param_schema.get("type", "string")
 
 
-def resolve_schema_references(schema_part: Dict[str, Any], reference_schema: Dict[str, Any]) -> Dict[str, Any]:
+def resolve_schema_references(schema_part: Dict[str, Any], reference_schema: Dict[str, Any], visited_refs: set = None) -> Dict[str, Any]:
     """
-    Resolve schema references in OpenAPI schemas.
+    Resolve schema references in OpenAPI schemas with circular reference protection.
 
     Args:
         schema_part: The part of the schema being processed that may contain references
         reference_schema: The complete schema used to resolve references from
+        visited_refs: Set of already visited references to prevent circular recursion
 
     Returns:
         The schema with references resolved
     """
+    # Initialize visited_refs on first call
+    if visited_refs is None:
+        visited_refs = set()
+    
     # Make a copy to avoid modifying the input schema
     schema_part = schema_part.copy()
 
     # Handle $ref directly in the schema
     if "$ref" in schema_part:
         ref_path = schema_part["$ref"]
+        
+        # Check if we've already visited this reference (circular reference detection)
+        if ref_path in visited_refs:
+            # Return just the reference without resolving to prevent infinite recursion
+            return {"$ref": ref_path}
+        
         # Standard OpenAPI references are in the format "#/components/schemas/ModelName"
         if ref_path.startswith("#/components/schemas/"):
             model_name = ref_path.split("/")[-1]
             if "components" in reference_schema and "schemas" in reference_schema["components"]:
                 if model_name in reference_schema["components"]["schemas"]:
+                    # Mark this reference as visited
+                    visited_refs.add(ref_path)
+                    
                     # Replace with the resolved schema
                     ref_schema = reference_schema["components"]["schemas"][model_name].copy()
                     # Remove the $ref key and merge with the original schema
                     schema_part.pop("$ref")
                     schema_part.update(ref_schema)
+                    
+                    # Continue resolving with the updated visited set
+                    # but don't add to visited_refs permanently - remove after processing
+                    visited_refs_copy = visited_refs.copy()
 
     # Recursively resolve references in all dictionary values
     for key, value in schema_part.items():
         if isinstance(value, dict):
-            schema_part[key] = resolve_schema_references(value, reference_schema)
+            schema_part[key] = resolve_schema_references(value, reference_schema, visited_refs)
         elif isinstance(value, list):
             # Only process list items that are dictionaries since only they can contain refs
             schema_part[key] = [
-                resolve_schema_references(item, reference_schema) if isinstance(item, dict) else item for item in value
+                resolve_schema_references(item, reference_schema, visited_refs) if isinstance(item, dict) else item for item in value
             ]
 
     return schema_part