diff --git a/libs/dyn/yamlloader/loader.go b/libs/dyn/yamlloader/loader.go
index 7ff4303d8ee..0f69f0c638b 100644
--- a/libs/dyn/yamlloader/loader.go
+++ b/libs/dyn/yamlloader/loader.go
@@ -23,6 +23,11 @@ func (e *LocationError) Error() string {
 
 type loader struct {
 	path string
+
+	// Aliases currently being expanded. A self-referential anchor (e.g.
+	// "a: &x {b: *x}") makes the yaml.v3 node graph cyclic; without this
+	// bookkeeping, expansion would recurse until stack overflow.
+	activeAliases map[*yaml.Node]bool
 }
 
 func errorf(loc dyn.Location, format string, args ...any) error {
@@ -31,7 +36,8 @@ func errorf(loc dyn.Location, format string, args ...any) error {
 
 func newLoader(path string) *loader {
 	return &loader{
-		path: path,
+		path:          path,
+		activeAliases: make(map[*yaml.Node]bool),
 	}
 }
 
@@ -271,5 +277,14 @@ func (d *loader) loadScalar(node *yaml.Node, loc dyn.Location) (dyn.Value, error
 }
 
 func (d *loader) loadAlias(node *yaml.Node, loc dyn.Location) (dyn.Value, error) {
+	if d.activeAliases[node] {
+		return dyn.InvalidValue, errorf(loc, "cyclic reference to anchor %q", node.Value)
+	}
+
+	// The same alias node may be reached again through another alias to an
+	// enclosing anchor, which is not a cycle.
+	d.activeAliases[node] = true
+	defer delete(d.activeAliases, node)
+
 	return d.load(node.Alias)
 }
diff --git a/libs/dyn/yamlloader/testdata/anchor_09.yml b/libs/dyn/yamlloader/testdata/anchor_09.yml
new file mode 100644
index 00000000000..8005bf445ef
--- /dev/null
+++ b/libs/dyn/yamlloader/testdata/anchor_09.yml
@@ -0,0 +1,2 @@
+anchortest: &x
+  child: *x
diff --git a/libs/dyn/yamlloader/testdata/anchor_10.yml b/libs/dyn/yamlloader/testdata/anchor_10.yml
new file mode 100644
index 00000000000..013832ab3ac
--- /dev/null
+++ b/libs/dyn/yamlloader/testdata/anchor_10.yml
@@ -0,0 +1,5 @@
+leaf: &leaf 1
+shared: &shared
+  value: *leaf
+use1: *shared
+use2: *shared
diff --git a/libs/dyn/yamlloader/yaml_anchor_test.go b/libs/dyn/yamlloader/yaml_anchor_test.go
index 05beb5401d8..53cd6945f93 100644
--- a/libs/dyn/yamlloader/yaml_anchor_test.go
+++ b/libs/dyn/yamlloader/yaml_anchor_test.go
@@ -1,10 +1,14 @@
 package yamlloader_test
 
 import (
+	"bytes"
+	"os"
 	"testing"
 
 	"github.com/databricks/cli/libs/dyn"
+	"github.com/databricks/cli/libs/dyn/yamlloader"
 	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
 )
 
 func TestYAMLAnchor01(t *testing.T) {
@@ -115,3 +119,21 @@ func TestYAMLAnchor08(t *testing.T) {
 	assert.Equal(t, true, active.AsAny())
 	assert.Equal(t, dyn.Location{File: file, Line: 2, Column: 11}, active.Location())
 }
+
+func TestYAMLAnchor09(t *testing.T) {
+	file := "testdata/anchor_09.yml"
+	input, err := os.ReadFile(file)
+	require.NoError(t, err)
+
+	_, err = yamlloader.LoadYAML(file, bytes.NewBuffer(input))
+	assert.ErrorContains(t, err, `cyclic reference to anchor "x"`)
+}
+
+func TestYAMLAnchor10(t *testing.T) {
+	file := "testdata/anchor_10.yml"
+	self := loadYAML(t, file)
+	assert.NotEqual(t, dyn.NilValue, self)
+
+	assert.Equal(t, 1, self.Get("use1").Get("value").AsAny())
+	assert.Equal(t, 1, self.Get("use2").Get("value").AsAny())
+}