diff --git a/index.js b/index.js
index ec0f634..245499b 100644
--- a/index.js
+++ b/index.js
@@ -4,12 +4,14 @@ var fs = require('fs'),
 	path = require('path'),
 	gutil = require('gulp-util'),
 	_ = require('lodash'),
-	Stream = require('stream');
+	Stream = require('stream'),
+	DAG = require('dag');
 
 var PLUGIN_NAME  = 'gulp-resolve-dependencies';
 
 function resolveDependencies(config) {
 	var stream,
+		dag = new DAG(),
 		fileCache = [],
 		filesReturned = [],
 		getFiles = function(targetFile) {
@@ -34,9 +36,10 @@ function resolveDependencies(config) {
 			while (match = pattern.exec(content)) {
 				filePath = path.join(path.dirname(targetFile.path), match[1]);
 
-				// Skip if already added to dependencies
-				if (_.indexOf(fileCache, filePath) !== -1) {
-					continue;
+				try {
+					dag.addEdge(targetFile.path, filePath);
+				} catch (ex) {
+					stream.emit('error', new Error('circular file 1: ' + targetFile.path + ' file 2: ' + filePath));
 				}
 
 				// Check existence
diff --git a/package.json b/package.json
index 27389a7..7cc1628 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "gulp-resolve-dependencies",
-  "version": "1.0.3",
+  "version": "1.1.0",
   "description": "Resolve dependency directives in assets (e.g. \"@requires\" or \"//= require\" in JavaScript)",
   "license": "MIT",
   "repository": "backflip/gulp-resolve-dependencies",
@@ -9,7 +9,8 @@
     "node": ">=0.10.0"
   },
   "scripts": {
-    "test": "mocha"
+    "pretest": "npm i",
+    "test": "./node_modules/mocha/bin/mocha"
   },
   "main": "./index.js",
   "keywords": [
@@ -25,12 +26,14 @@
     "sprockets"
   ],
   "dependencies": {
+    "dag": "0.0.1",
     "gulp-util": "~3.0.1",
     "lodash": "~2.4.1"
   },
   "devDependencies": {
-    "mocha": "~2.0.1",
     "event-stream": "~3.1.7",
-    "gulp": "~3.8.10"
+    "gulp": "~3.8.10",
+    "gulp-concat": "^2.4.3",
+    "mocha": "~2.0.1"
   }
 }
diff --git a/test/circular/a.js b/test/circular/a.js
new file mode 100644
index 0000000..620cd70
--- /dev/null
+++ b/test/circular/a.js
@@ -0,0 +1,5 @@
+/**
+ * @requires ../circular/b.js
+ * @requires ../circular/c.js
+ */
+module.exports = 'A';
diff --git a/test/circular/b.js b/test/circular/b.js
new file mode 100644
index 0000000..33f979b
--- /dev/null
+++ b/test/circular/b.js
@@ -0,0 +1,4 @@
+/**
+ * @requires ../circular/c.js
+ */
+module.exports = 'B';
diff --git a/test/circular/c.js b/test/circular/c.js
new file mode 100644
index 0000000..83e09cd
--- /dev/null
+++ b/test/circular/c.js
@@ -0,0 +1,4 @@
+/**
+ * @requires ../circular/b.js
+ */
+module.exports = 'C';
diff --git a/test/main.js b/test/main.js
index 7ff797b..0812dc0 100755
--- a/test/main.js
+++ b/test/main.js
@@ -23,4 +23,12 @@ describe('gulp-resolve-dependencies', function() {
 				done();
 			}));
 	});
+
+	it('should throw error if hit circular dependency', function(done) {
+		gulp.src(__dirname + '/circular/a.js')
+			.pipe(resolveDependencies())
+			.on('error', function () {
+				done();
+			});
+	});
 });