diff --git a/v2/engine/make1.c b/v2/engine/make1.c
index 67c01fdb3..7b5354870 100644
--- a/v2/engine/make1.c
+++ b/v2/engine/make1.c
@@ -281,20 +281,24 @@ static void make1a( state * pState )
     if ( pState->parent )
     {
         TARGET * dependency = make1scc( t );
+        TARGET * cycle_root;
         switch ( dependency->progress )
         {
             case T_MAKE_ONSTACK:
                 make1breakcycle( pState->parent, dependency ); break;
             case T_MAKE_ACTIVE:
-                if ( handling_rescan && make1findcycle( dependency ) )
+                if ( handling_rescan && ( cycle_root = make1findcycle( dependency ) ) )
                 {
-                    make1breakcycle( pState->parent, dependency ); break;
+                    make1breakcycle( pState->parent, cycle_root ); break;
                 }
             case T_MAKE_INIT:
             case T_MAKE_RUNNING:
-                dependency->parents = targetentry( dependency->parents,
-                    pState->parent );
-                ++pState->parent->asynccnt;
+                if( dependency != pState->parent )
+                {
+                    dependency->parents = targetentry( dependency->parents,
+                        pState->parent );
+                    ++pState->parent->asynccnt;
+                }
         }
     }
 
diff --git a/v2/test/rescan_header.py b/v2/test/rescan_header.py
index 87d6cc947..16fd8b104 100755
--- a/v2/test/rescan_header.py
+++ b/v2/test/rescan_header.py
@@ -220,5 +220,83 @@ t.expect_addition("bin/$toolset/debug/test2.obj")
 t.expect_addition("bin/$toolset/debug/test.exe")
 t.expect_nothing_more()
 
+t.rm(".")
+
+# Test a loop that includes a generated header
+t.write("test1.cpp", """
+#include "header1.h"
+""")
+
+t.write("test2.cpp", """
+#include "header2.h"
+
+int main() {}
+""")
+
+t.write("header1.h", """
+#ifndef HEADER1_H
+#define HEADER1_H
+#include "header2.h"
+#endif
+""")
+
+t.write("header2.in", """
+#ifndef HEADER2_H
+#define HEADER2_H
+#include "header3.h"
+#endif
+""")
+
+t.write("header3.h", """
+#ifndef HEADER3_H
+#define HEADER3_H
+#include "header1.h"
+#endif
+""")
+
+t.write("sleep.bat","""@setlocal
+@echo off
+@REM timeout /T %1 /NOBREAK >nul
+ping 127.0.0.1 -n 2 -w 1000 >nul
+ping 127.0.0.1 -n %1 -w 1000 >nul
+@endlocal
+@exit /B 0
+""")
+
+t.write("Jamroot.jam", """
+import common ;
+import os ;
+
+if [ os.name ] = NT
+{
+    SLEEP = call sleep.bat ;
+}
+else
+{
+    SLEEP = sleep ;
+}
+
+rule copy {
+    common.copy $(<) : $(>) ;
+}
+
+actions copy {
+    $(SLEEP) 1
+}
+
+make header2.h : header2.in : @copy ;
+exe test : test2.cpp test1.cpp :
+  <implicit-dependency>header2.h
+  <include>.
+  ;
+""")
+
+t.run_build_system("-j2 test")
+t.expect_addition("bin/$toolset/debug/header2.h")
+t.expect_addition("bin/$toolset/debug/test1.obj")
+t.expect_addition("bin/$toolset/debug/test2.obj")
+t.expect_addition("bin/$toolset/debug/test.exe")
+t.expect_nothing_more()
+
 
 t.cleanup()