diff --git a/src/__tests__/mergeAllOf.spec.ts b/src/__tests__/mergeAllOf.spec.ts
new file mode 100644
index 0000000..1aae0fe
--- /dev/null
+++ b/src/__tests__/mergeAllOf.spec.ts
@@ -0,0 +1,23 @@
+import { ResolvingError } from '../errors';
+import { mergeAllOf } from '../mergers/mergeAllOf';
+import type { SchemaFragment } from '../types';
+import type { WalkingOptions } from '../walker/types';
+
+describe('mergeAllOf', () => {
+  // Regression: mutually recursive allOf (A -> B -> A) caused _mergeAllOf to
+  // call itself with the same resolved fragment before seen-cache was populated,
+  // producing a RangeError (call stack overflow) in the caller.
+  it('throws ResolvingError (not a stack overflow) for mutually recursive allOf schemas', () => {
+    const schemaA: SchemaFragment = { allOf: [{ $ref: '#/B' }] };
+    const schemaB: SchemaFragment = { allOf: [{ $ref: '#/A' }] };
+    const refs: Record<string, SchemaFragment> = { '#/A': schemaA, '#/B': schemaB };
+
+    const walkingOptions: WalkingOptions = {
+      mergeAllOf: true,
+      resolveRef: (_path, $ref) => refs[$ref] ?? {},
+      maxRefDepth: null,
+    };
+
+    expect(() => mergeAllOf({ allOf: [{ $ref: '#/A' }] }, [], walkingOptions, new WeakMap())).toThrow(ResolvingError);
+  });
+});
diff --git a/src/mergers/mergeAllOf.ts b/src/mergers/mergeAllOf.ts
index 24d89dd..89ac061 100644
--- a/src/mergers/mergeAllOf.ts
+++ b/src/mergers/mergeAllOf.ts
@@ -6,19 +6,22 @@ import type { WalkerRefResolver, WalkingOptions } from '../walker/types';
 
 const resolveAllOf = require('@stoplight/json-schema-merge-allof');
 
-const store = new WeakMap<WalkerRefResolver, WeakMap<SchemaFragment, string[]>>();
-
 function _mergeAllOf(
   fragment: SchemaFragment,
   path: string[],
   resolveRef: WalkerRefResolver | null,
   seen: WeakMap<SchemaFragment, SchemaFragment>,
+  resolvedInPriorIterations: Set<string> | null,
 ): SchemaFragment {
   const cached = seen.get(fragment);
   if (cached !== void 0) {
     return cached;
   }
 
+  // Track $refs resolved in THIS iteration so we can add them to
+  // resolvedInPriorIterations after the call completes.
+  const refsThisIteration = resolvedInPriorIterations !== null ? new Set<string>() : null;
+
   const merged = resolveAllOf(fragment, {
     deep: false,
     resolvers: resolveAllOf.stoplightResolvers,
@@ -33,36 +36,26 @@ function _mergeAllOf(
               throw new ResolvingError('Circular reference detected');
             }
 
-            const allRefs = store.get(resolveRef)!;
-            let schemaRefs = allRefs.get(fragment);
-
-            if (schemaRefs === void 0) {
-              schemaRefs = [$ref];
-              allRefs.set(fragment, schemaRefs);
-            } else if (schemaRefs.includes($ref)) {
-              const resolved = resolveRef(null, $ref);
-              return 'allOf' in resolved ? _mergeAllOf(resolved, path, resolveRef, seen) : resolved;
-            } else {
-              schemaRefs.push($ref);
-            }
-
-            const resolved = resolveRef(null, $ref);
-
-            if (Array.isArray(resolved.allOf)) {
-              for (const member of resolved.allOf) {
-                const index = schemaRefs.indexOf(member.$ref);
-                if (typeof member.$ref === 'string' && index !== -1 && index !== schemaRefs.lastIndexOf(member.$ref)) {
-                  throw new ResolvingError('Circular reference detected');
-                }
-              }
+            // A $ref seen in a prior do-while iteration means the chain is
+            // circular (e.g. A→B→A). Throw instead of looping forever.
+            if (resolvedInPriorIterations?.has($ref) === true) {
+              throw new ResolvingError('Circular reference detected');
             }
 
-            return resolved;
+            refsThisIteration?.add($ref);
+            return resolveRef(null, $ref);
           },
         }
       : null),
   });
 
+  // Promote this iteration's refs so the next iteration can detect cycles.
+  if (resolvedInPriorIterations !== null && refsThisIteration !== null) {
+    for (const ref of refsThisIteration) {
+      resolvedInPriorIterations.add(ref);
+    }
+  }
+
   seen.set(fragment, merged);
   return merged;
 }
@@ -73,13 +66,13 @@ export function mergeAllOf(
   walkingOptions: WalkingOptions,
   seen: WeakMap<SchemaFragment, SchemaFragment>,
 ) {
-  if (walkingOptions.resolveRef !== null && !store.has(walkingOptions.resolveRef)) {
-    store.set(walkingOptions.resolveRef, new WeakMap());
-  }
+  // One set shared across all do-while iterations; grows monotonically so any
+  // $ref seen in iteration N will be detected as circular in iteration N+1.
+  const resolvedInPriorIterations = walkingOptions.resolveRef !== null ? new Set<string>() : null;
 
   let merged = fragment;
   do {
-    merged = _mergeAllOf(merged, path, walkingOptions.resolveRef, seen);
+    merged = _mergeAllOf(merged, path, walkingOptions.resolveRef, seen, resolvedInPriorIterations);
   } while ('allOf' in merged);
 
   return merged;