diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 79ef7612059..7728c7d68e2 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -3572,7 +3572,19 @@ module ts {
             return false;
         }
 
+        // Since removeSubtypes checks the subtype relation, and the subtype relation on a union
+        // may attempt to reduce a union, it is possible that removeSubtypes could be called
+        // recursively on the same set of types. The removeSubtypesStack is used to track which
+        // sets of types are currently undergoing subtype reduction.
+        let removeSubtypesStack: string[] = [];
         function removeSubtypes(types: Type[]) {
+            let typeListId = getTypeListId(types);
+            if (removeSubtypesStack.lastIndexOf(typeListId) >= 0) {
+                return;
+            }
+
+            removeSubtypesStack.push(typeListId);
+
             let i = types.length;
             while (i > 0) {
                 i--;
@@ -3580,6 +3592,8 @@ module ts {
                     types.splice(i, 1);
                 }
             }
+
+            removeSubtypesStack.pop();
         }
 
         function containsAnyType(types: Type[]) {
diff --git a/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.js b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.js
new file mode 100644
index 00000000000..9442d733aa4
--- /dev/null
+++ b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.js
@@ -0,0 +1,43 @@
+//// [unionTypeWithRecursiveSubtypeReduction.ts]
+class Module {
+    public members: Class[];
+}
+
+class Namespace {
+    public members: (Class | Property)[];
+}
+
+class Class {
+    public parent: Namespace;
+}
+
+class Property {
+    public parent: Module | Class;
+}
+
+var t: Class | Property;
+t.parent;
+
+//// [unionTypeWithRecursiveSubtypeReduction.js]
+var Module = (function () {
+    function Module() {
+    }
+    return Module;
+})();
+var Namespace = (function () {
+    function Namespace() {
+    }
+    return Namespace;
+})();
+var Class = (function () {
+    function Class() {
+    }
+    return Class;
+})();
+var Property = (function () {
+    function Property() {
+    }
+    return Property;
+})();
+var t;
+t.parent;
diff --git a/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.symbols b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.symbols
new file mode 100644
index 00000000000..93351990f6c
--- /dev/null
+++ b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.symbols
@@ -0,0 +1,45 @@
+=== tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction.ts ===
+class Module {
+>Module : Symbol(Module, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 0, 0))
+
+    public members: Class[];
+>members : Symbol(members, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 0, 14))
+>Class : Symbol(Class, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 6, 1))
+}
+
+class Namespace {
+>Namespace : Symbol(Namespace, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 2, 1))
+
+    public members: (Class | Property)[];
+>members : Symbol(members, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 4, 17))
+>Class : Symbol(Class, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 6, 1))
+>Property : Symbol(Property, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 10, 1))
+}
+
+class Class {
+>Class : Symbol(Class, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 6, 1))
+
+    public parent: Namespace;
+>parent : Symbol(parent, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 8, 13))
+>Namespace : Symbol(Namespace, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 2, 1))
+}
+
+class Property {
+>Property : Symbol(Property, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 10, 1))
+
+    public parent: Module | Class;
+>parent : Symbol(parent, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 12, 16))
+>Module : Symbol(Module, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 0, 0))
+>Class : Symbol(Class, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 6, 1))
+}
+
+var t: Class | Property;
+>t : Symbol(t, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 16, 3))
+>Class : Symbol(Class, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 6, 1))
+>Property : Symbol(Property, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 10, 1))
+
+t.parent;
+>t.parent : Symbol(parent, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 8, 13), Decl(unionTypeWithRecursiveSubtypeReduction.ts, 12, 16))
+>t : Symbol(t, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 16, 3))
+>parent : Symbol(parent, Decl(unionTypeWithRecursiveSubtypeReduction.ts, 8, 13), Decl(unionTypeWithRecursiveSubtypeReduction.ts, 12, 16))
+
diff --git a/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.types b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.types
new file mode 100644
index 00000000000..cf8f41d70cc
--- /dev/null
+++ b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction.types
@@ -0,0 +1,45 @@
+=== tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction.ts ===
+class Module {
+>Module : Module
+
+    public members: Class[];
+>members : Class[]
+>Class : Class
+}
+
+class Namespace {
+>Namespace : Namespace
+
+    public members: (Class | Property)[];
+>members : (Class | Property)[]
+>Class : Class
+>Property : Property
+}
+
+class Class {
+>Class : Class
+
+    public parent: Namespace;
+>parent : Namespace
+>Namespace : Namespace
+}
+
+class Property {
+>Property : Property
+
+    public parent: Module | Class;
+>parent : Module | Class
+>Module : Module
+>Class : Class
+}
+
+var t: Class | Property;
+>t : Class | Property
+>Class : Class
+>Property : Property
+
+t.parent;
+>t.parent : Class | Namespace
+>t : Class | Property
+>parent : Class | Namespace
+
diff --git a/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction2.errors.txt b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction2.errors.txt
new file mode 100644
index 00000000000..0f15bd1ed3a
--- /dev/null
+++ b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction2.errors.txt
@@ -0,0 +1,45 @@
+tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction2.ts(19,1): error TS2322: Type 'Property' is not assignable to type 'Class'.
+  Types of property 'parent' are incompatible.
+    Type 'Module | Class' is not assignable to type 'Namespace'.
+      Type 'Class' is not assignable to type 'Namespace'.
+        Property 'members' is missing in type 'Class'.
+tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction2.ts(20,1): error TS2322: Type 'Class' is not assignable to type 'Property'.
+  Types of property 'parent' are incompatible.
+    Type 'Namespace' is not assignable to type 'Module | Class'.
+      Type 'Namespace' is not assignable to type 'Class'.
+        Property 'parent' is missing in type 'Namespace'.
+
+
+==== tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction2.ts (2 errors) ====
+    class Module {
+        public members: Class[];
+    }
+    
+    class Namespace {
+        public members: (Class | Property)[];
+    }
+    
+    class Class {
+        public parent: Namespace;
+    }
+    
+    class Property {
+        public parent: Module | Class;
+    }
+    
+    var c: Class;
+    var p: Property;
+    c = p;
+    ~
+!!! error TS2322: Type 'Property' is not assignable to type 'Class'.
+!!! error TS2322:   Types of property 'parent' are incompatible.
+!!! error TS2322:     Type 'Module | Class' is not assignable to type 'Namespace'.
+!!! error TS2322:       Type 'Class' is not assignable to type 'Namespace'.
+!!! error TS2322:         Property 'members' is missing in type 'Class'.
+    p = c;
+    ~
+!!! error TS2322: Type 'Class' is not assignable to type 'Property'.
+!!! error TS2322:   Types of property 'parent' are incompatible.
+!!! error TS2322:     Type 'Namespace' is not assignable to type 'Module | Class'.
+!!! error TS2322:       Type 'Namespace' is not assignable to type 'Class'.
+!!! error TS2322:         Property 'parent' is missing in type 'Namespace'.
\ No newline at end of file
diff --git a/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction2.js b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction2.js
new file mode 100644
index 00000000000..6b3c61dbeed
--- /dev/null
+++ b/tests/baselines/reference/unionTypeWithRecursiveSubtypeReduction2.js
@@ -0,0 +1,47 @@
+//// [unionTypeWithRecursiveSubtypeReduction2.ts]
+class Module {
+    public members: Class[];
+}
+
+class Namespace {
+    public members: (Class | Property)[];
+}
+
+class Class {
+    public parent: Namespace;
+}
+
+class Property {
+    public parent: Module | Class;
+}
+
+var c: Class;
+var p: Property;
+c = p;
+p = c;
+
+//// [unionTypeWithRecursiveSubtypeReduction2.js]
+var Module = (function () {
+    function Module() {
+    }
+    return Module;
+})();
+var Namespace = (function () {
+    function Namespace() {
+    }
+    return Namespace;
+})();
+var Class = (function () {
+    function Class() {
+    }
+    return Class;
+})();
+var Property = (function () {
+    function Property() {
+    }
+    return Property;
+})();
+var c;
+var p;
+c = p;
+p = c;
diff --git a/tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction.ts b/tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction.ts
new file mode 100644
index 00000000000..651adf44895
--- /dev/null
+++ b/tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction.ts
@@ -0,0 +1,18 @@
+class Module {
+    public members: Class[];
+}
+
+class Namespace {
+    public members: (Class | Property)[];
+}
+
+class Class {
+    public parent: Namespace;
+}
+
+class Property {
+    public parent: Module | Class;
+}
+
+var t: Class | Property;
+t.parent;
\ No newline at end of file
diff --git a/tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction2.ts b/tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction2.ts
new file mode 100644
index 00000000000..31a8bbe0b67
--- /dev/null
+++ b/tests/cases/compiler/unionTypeWithRecursiveSubtypeReduction2.ts
@@ -0,0 +1,20 @@
+class Module {
+    public members: Class[];
+}
+
+class Namespace {
+    public members: (Class | Property)[];
+}
+
+class Class {
+    public parent: Namespace;
+}
+
+class Property {
+    public parent: Module | Class;
+}
+
+var c: Class;
+var p: Property;
+c = p;
+p = c;
\ No newline at end of file