diff --git a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts
index 1b09007306f41..88fc8cf6ae013 100644
--- a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts
+++ b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts
@@ -463,6 +463,56 @@ describe('Enforce Module Boundaries', () => {
       'Circular dependency between "anotherlib" and "mylib" detected'
     );
   });
+
+  it('should error when circular dependency detected (indirect)', () => {
+    const failures = runRule(
+      {},
+      `${process.cwd()}/proj/libs/mylib/src/main.ts`,
+      'import "@mycompany/badcirclelib"',
+      [
+        {
+          name: 'mylib',
+          root: 'libs/mylib/src',
+          type: ProjectType.lib,
+          tags: [],
+          files: [`libs/mylib/src/main.ts`]
+        },
+        {
+          name: 'anotherlib',
+          root: 'libs/anotherlib/src',
+          type: ProjectType.lib,
+          tags: [],
+          files: [`libs/anotherlib/src/main.ts`]
+        },
+        {
+          name: 'badcirclelib',
+          root: 'libs/badcirclelib/src',
+          type: ProjectType.lib,
+          tags: [],
+          files: [`libs/badcirclelib/src/main.ts`]
+        },
+        {
+          name: 'myapp',
+          root: 'apps/myapp/src',
+          type: ProjectType.app,
+          tags: [],
+          files: [`apps/myapp/index.ts`]
+        }
+      ],
+      {
+        mylib: [
+          { projectName: 'badcirclelib', type: DependencyType.es6Import }
+        ],
+        badcirclelib: [
+          { projectName: 'anotherlib', type: DependencyType.es6Import }
+        ],
+        anotherlib: [{ projectName: 'mylib', type: DependencyType.es6Import }]
+      }
+    );
+    expect(failures[0].getFailure()).toEqual(
+      'Circular dependency between "mylib" and "badcirclelib" detected'
+    );
+  });
 });
 
 function runRule(
diff --git a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts
index aed61482d7d86..f347e6c81776f 100644
--- a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts
+++ b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts
@@ -214,9 +214,27 @@ class EnforceModuleBoundariesWalker extends Lint.RuleWalker {
     targetProject: ProjectNode
   ): boolean {
     if (!this.deps[targetProject.name]) return false;
-    return this.deps[targetProject.name].some(
-      dep => dep.projectName == sourceProject.name
-    );
+    return this.isDependingOn(targetProject.name, sourceProject.name);
+  }
+
+  private isDependingOn(
+    sourceProjectName: string,
+    targetProjectName: string,
+    done: { [projectName: string]: boolean } = {}
+  ): boolean {
+    if (done[sourceProjectName]) return false;
+    if (!this.deps[sourceProjectName]) return false;
+    return this.deps[sourceProjectName]
+      .map(
+        dep =>
+          dep.projectName === targetProjectName
+            ? true
+            : this.isDependingOn(dep.projectName, targetProjectName, {
+                ...done,
+                [`${sourceProjectName}`]: true
+              })
+      )
+      .some(result => result);
   }
 
   private onlyLoadChildren(