diff --git a/sdv/metadata/multi_table.py b/sdv/metadata/multi_table.py
index 7c6e2a17e..61be08db8 100644
--- a/sdv/metadata/multi_table.py
+++ b/sdv/metadata/multi_table.py
@@ -126,10 +126,10 @@ def _validate_relationship_sdtypes(
                 )
 
     def _validate_circular_relationships(
-        self, parent, children=None, parents=None, child_map=None, errors=None
+        self, parent, children=None, visited=None, child_map=None, errors=None
     ):
         """Validate that there is no circular relationship in the metadata."""
-        parents = set() if parents is None else parents
+        visited = set() if visited is None else visited
         if children is None:
             children = child_map[parent]
 
@@ -137,15 +137,15 @@ def _validate_circular_relationships(
             errors.append(parent)
 
         for child in children:
-            if child in parents:
-                break
+            if child in visited:
+                continue
 
-            parents.add(child)
+            visited.add(child)
             self._validate_circular_relationships(
                 parent,
                 children=child_map.get(child, set()),
                 child_map=child_map,
-                parents=parents,
+                visited=visited,
                 errors=errors,
             )
 
diff --git a/tests/unit/metadata/test_multi_table.py b/tests/unit/metadata/test_multi_table.py
index a43816100..43c9941a6 100644
--- a/tests/unit/metadata/test_multi_table.py
+++ b/tests/unit/metadata/test_multi_table.py
@@ -1418,6 +1418,102 @@ def test_validate_data_datetime_warning(self):
         with pytest.warns(UserWarning, match=warning_msg):
             metadata.validate_data(data)
 
+    def test_add_relationship_circular_graph(self):
+        """Test that an error is raised when a circular relationship is detected.
+
+        The graph has the cycle B->C->D->B.
+        Besides the cycle, the other relationships are: B->A, C->A, D->A.
+        """
+        # Setup
+        metadata = MultiTableMetadata()
+        metadata.add_table('A')
+        metadata.add_column('A', 'id', sdtype='id')
+        metadata.add_column('A', 'fk', sdtype='id')
+        metadata.set_primary_key('A', 'id')
+
+        metadata.add_table('B')
+        metadata.add_column('B', 'id', sdtype='id')
+        metadata.add_column('B', 'fk', sdtype='id')
+        metadata.set_primary_key('B', 'id')
+
+        metadata.add_table('C')
+        metadata.add_column('C', 'id', sdtype='id')
+        metadata.add_column('C', 'fk', sdtype='id')
+        metadata.set_primary_key('C', 'id')
+
+        metadata.add_table('D')
+        metadata.add_column('D', 'id', sdtype='id')
+        metadata.add_column('D', 'fk', sdtype='id')
+        metadata.set_primary_key('D', 'id')
+
+        metadata.add_relationship('B', 'C', 'id', 'fk')
+        metadata.add_relationship('B', 'A', 'id', 'fk')
+
+        metadata.add_relationship('C', 'D', 'id', 'fk')
+        metadata.add_relationship('C', 'A', 'id', 'fk')
+
+        metadata.add_relationship('D', 'A', 'id', 'fk')
+
+        # Run and Assert
+        error_msg = re.escape(
+            'The relationships in the dataset describe a '
+            "circular dependency between tables ['B', 'C', 'D']."
+        )
+        with pytest.raises(InvalidMetadataError, match=error_msg):
+            metadata.add_relationship('D', 'B', 'id', 'fk')
+
+    def test_add_relationship_circular_graph_complex(self):
+        """Test that an error is raised when a circular relationship is detected.
+
+        The graph has the cycle C->E->D->C.
+        Besides the cycle, the other relationships are: C->B, D->B, E->B, E->A, A->B.
+        """
+        # Setup
+        metadata = MultiTableMetadata()
+        metadata.add_table('A')
+        metadata.add_column('A', 'id', sdtype='id')
+        metadata.add_column('A', 'fk', sdtype='id')
+        metadata.set_primary_key('A', 'id')
+
+        metadata.add_table('B')
+        metadata.add_column('B', 'id', sdtype='id')
+        metadata.add_column('B', 'fk', sdtype='id')
+        metadata.set_primary_key('B', 'id')
+
+        metadata.add_table('C')
+        metadata.add_column('C', 'id', sdtype='id')
+        metadata.add_column('C', 'fk', sdtype='id')
+        metadata.set_primary_key('C', 'id')
+
+        metadata.add_table('D')
+        metadata.add_column('D', 'id', sdtype='id')
+        metadata.add_column('D', 'fk', sdtype='id')
+        metadata.set_primary_key('D', 'id')
+
+        metadata.add_table('E')
+        metadata.add_column('E', 'id', sdtype='id')
+        metadata.add_column('E', 'fk', sdtype='id')
+        metadata.set_primary_key('E', 'id')
+
+        metadata.add_relationship('C', 'B', 'id', 'fk')
+        metadata.add_relationship('C', 'E', 'id', 'fk')
+
+        metadata.add_relationship('D', 'B', 'id', 'fk')
+        metadata.add_relationship('D', 'C', 'id', 'fk')
+
+        metadata.add_relationship('A', 'B', 'id', 'fk')
+
+        metadata.add_relationship('E', 'A', 'id', 'fk')
+        metadata.add_relationship('E', 'B', 'id', 'fk')
+
+        # Run and Assert
+        error_msg = re.escape(
+            'The relationships in the dataset describe a '
+            "circular dependency between tables ['C', 'D', 'E']."
+        )
+        with pytest.raises(InvalidMetadataError, match=error_msg):
+            metadata.add_relationship('E', 'D', 'id', 'fk')
+
     @patch('sdv.metadata.multi_table.SingleTableMetadata')
     def test_add_table(self, table_metadata_mock):
         """Test that the method adds the table name to ``instance.tables``."""