diff --git a/src/main/kotlin/io/vlang/ide/inspections/general/VlangCircularImportInspection.kt b/src/main/kotlin/io/vlang/ide/inspections/general/VlangCircularImportInspection.kt
index 139daaf8..3ed8f750 100644
--- a/src/main/kotlin/io/vlang/ide/inspections/general/VlangCircularImportInspection.kt
+++ b/src/main/kotlin/io/vlang/ide/inspections/general/VlangCircularImportInspection.kt
@@ -7,34 +7,46 @@ import io.vlang.ide.inspections.VlangBaseInspection
 import io.vlang.lang.psi.VlangFile
 import io.vlang.lang.psi.VlangImportName
 import io.vlang.lang.psi.VlangVisitor
+import io.vlang.lang.psi.impl.VlangModule
 
 class VlangCircularImportInspection : VlangBaseInspection() {
     override fun buildVisitor(holder: ProblemsHolder, isOnTheFly: Boolean): PsiElementVisitor {
 
+        fun hasCircularImport(module: VlangModule, visited: MutableSet<VlangModule>): Boolean {
+            if (module in visited) return true // circular import detected, stop here
+
+            visited.add(module)
+            module.directory.files.filterIsInstance<VlangFile>().forEach { file ->
+                val imports = file.getImports()
+                for (import in imports) {
+                    import.resolve().firstOrNull()?.let{
+                        return hasCircularImport(it, visited)
+                    }
+                }
+            }
+            visited.remove(module)
+
+            return false // exhausted dfs search, no circular import detected
+        }
+
         return object : VlangVisitor() {
 
             override fun visitImportName(importName: VlangImportName) {
-
                 super.visitImportName(importName)
-                val currentModule = importName.containingFile.containingDirectory
                 val importList = importName.resolve().toList()
-
                 // check for circular import
                 importList.forEach { module ->
-                    val files = module.directory.files.filterIsInstance<VlangFile>()
-                    for (file in files) {
-                        val imports = file.getImports()
-                        if (imports.any { it.name == currentModule.name }) {
-                            holder.registerProblem(
-                                importName,
-                                "Circular import detected",
-                                ProblemHighlightType.GENERIC_ERROR_OR_WARNING,
-                            )
-                        }
+                    if(hasCircularImport(module, mutableSetOf())){
+                        holder.registerProblem(
+                            importName,
+                            "Circular import detected",
+                            ProblemHighlightType.GENERIC_ERROR_OR_WARNING,
+                        )
                     }
                 } // end check for circular import
             }
 
         }
+
     }
 }
diff --git a/src/test/kotlin/io/vlang/integration/inspections/CircularImportInspectionsTest.kt b/src/test/kotlin/io/vlang/integration/inspections/CircularImportInspectionsTest.kt
index 6917fb93..b9ba6ab0 100644
--- a/src/test/kotlin/io/vlang/integration/inspections/CircularImportInspectionsTest.kt
+++ b/src/test/kotlin/io/vlang/integration/inspections/CircularImportInspectionsTest.kt
@@ -4,13 +4,15 @@ import io.vlang.ide.inspections.general.VlangCircularImportInspection
 import io.vlang.integration.IntegrationTestBase
 
 class CircularImportInspectionsTest : IntegrationTestBase() {
+
     fun `test simple circular import`() = doTest {
         directory("first") {
-            file("utils.v", """
+            fileNoLangInj("utils.v",
+                """
                 module first
 
                 import second
-                
+
                 pub fn util(){
                     second.util()
                 }
@@ -18,11 +20,12 @@ class CircularImportInspectionsTest : IntegrationTestBase() {
         }
 
         directory("second") {
-            file("utils.v", """
+            fileNoLangInj("utils.v",
+                """
                 module second
 
                 import <warning descr="Circular import detected">first</warning>
-                
+
                 pub fn util() {
                     first.util()
                 }
@@ -32,4 +35,56 @@ class CircularImportInspectionsTest : IntegrationTestBase() {
             testInspections()
         }
     }
+
+    fun `test three way import cycle`() = doTest {
+
+        directory("first") {
+            fileNoLangInj("utils.v",
+                """
+                module first
+
+                import second
+
+                pub fn util(){
+                    second.util()
+                }
+                """.trimIndent())
+        }
+
+        directory("second") {
+            fileNoLangInj("utils.v",
+                """
+                module second
+
+                import third
+
+                pub fn util() {
+                    third.util()
+                }
+                """.trimIndent())
+        }
+
+        directory("third") {
+            fileNoLangInj("utils.v",
+                """
+                module third
+
+                import <warning descr="Circular import detected">first</warning>
+
+                pub fn util() {
+                    first.util()
+                }
+                """.trimIndent())
+
+            enableInspection(VlangCircularImportInspection())
+            testInspections()
+        }
+
+    }
+
+    //extension lambda to create file without language Sytax injection
+    val fileNoLangInj : DirectoryContext.(name: String, text: String) -> Unit = { name, text ->
+        file(name, text)
+    }
+
 }