diff --git a/src/Solcore/Frontend/TypeInference/TcContract.hs b/src/Solcore/Frontend/TypeInference/TcContract.hs
index 0a5e3972c..6b1431ad0 100644
--- a/src/Solcore/Frontend/TypeInference/TcContract.hs
+++ b/src/Solcore/Frontend/TypeInference/TcContract.hs
@@ -1,5 +1,8 @@
 module Solcore.Frontend.TypeInference.TcContract where
 
+import Algebra.Graph.AdjacencyMap
+import Algebra.Graph.AdjacencyMap.Algorithm
+import Algebra.Graph.NonEmpty.AdjacencyMap qualified as NAG
 import Control.Monad
 import Control.Monad.Except
 import Control.Monad.State
@@ -8,6 +11,7 @@ import Data.List
 import Data.List.NonEmpty qualified as N
 import Data.Map qualified as Map
 import Data.Maybe
+import Data.Set (Set)
 import Data.Set qualified as Set
 import Solcore.Frontend.Pretty.ShortName
 import Solcore.Frontend.Pretty.SolcorePretty
@@ -94,6 +98,8 @@ tcTopDeclChecks topDeclChecks =
     checkSynonymCycles syns
     let st = buildSynTable syns
     csExpanded <- everywhereM (mkM (expandTyM st)) cs
+    checkRecursiveTypes (topLevelDts csExpanded)
+    mapM_ checkRecursiveTypes (perContractDts csExpanded)
     mapM_ checkTopDecl (filter isClass csExpanded)
     mapM_ checkTopDecl (filter (not . isClass) csExpanded)
     trustImportedDecls csExpanded
@@ -120,6 +126,8 @@ tcTopDeclChecks topDeclChecks =
         TrustTopDeclBody ->
           withPartialDataTypesDisabled $
             pure Nothing
+    topLevelDts cs' = [d | TDataDef d <- cs']
+    perContractDts cs' = [[d | CDataDecl d <- cds] | TContr (Contract _ _ cds) <- cs']
     tcTopDecl' d = timeItNamed (shortName d) $ do
       clearSubst
       tcTopDecl d
@@ -168,6 +176,102 @@ recursiveSynonymError cyclePath =
         "  " ++ intercalate " -> " (map pretty cyclePath)
       ]
 
+-- check for recursive data types
+
+allDataTys :: [TopDecl Name] -> [DataTy]
+allDataTys = concatMap collect
+  where
+    collect (TDataDef d) = [d]
+    collect (TContr (Contract _ _ cds)) = [d | CDataDecl d <- cds]
+    collect _ = []
+
+tyVarNames :: Ty -> [Name]
+tyVarNames (TyVar tv) = [tyvarName tv]
+tyVarNames (TyCon _ ts) = concatMap tyVarNames ts
+tyVarNames _ = []
+
+-- Collect type variable names that appear in non-phantom argument positions.
+-- Phantom positions (indices in the map for the head type constructor) are skipped.
+nonPhantomVarNames :: Map.Map Name (Set Int) -> Ty -> [Name]
+nonPhantomVarNames m (TyCon n args) =
+  let phantomIdxs = Map.findWithDefault Set.empty n m
+   in concatMap
+        ( \(i, arg) ->
+            if Set.member i phantomIdxs then [] else nonPhantomVarNames m arg
+        )
+        (zip [0 ..] args)
+nonPhantomVarNames _ (TyVar v) = [tyvarName v]
+nonPhantomVarNames _ _ = []
+
+-- Build the phantom-parameter map using fixpoint iteration so that
+-- transitively-phantom positions are discovered.  A parameter at index i of
+-- type T is phantom when it never appears in a non-phantom position across all
+-- constructor field types (using the current map to decide what counts as
+-- non-phantom).  Starting from the empty map and iterating monotonically to a
+-- fixpoint ensures that every position that can be proved phantom eventually is.
+buildPhantomMap :: [DataTy] -> Map.Map Name (Set Int)
+buildPhantomMap dts = fixpoint initial
+  where
+    initial = Map.fromList [(dataName dt, Set.empty) | dt <- dts]
+
+    fixpoint m =
+      let m' = Map.fromList (map (refineEntry m) dts)
+       in if m == m' then m else fixpoint m'
+
+    refineEntry m (DataTy n params ctors) =
+      let allFieldTys = concatMap constrTy ctors
+          isPhantomParam p =
+            let pName = tyvarName p
+             in all (\ty -> pName `notElem` nonPhantomVarNames m ty) allFieldTys
+          phantomIdxs = Set.fromList [i | (i, p) <- zip [0 ..] params, isPhantomParam p]
+       in (n, phantomIdxs)
+
+nonPhantomTyNames :: Map.Map Name (Set Int) -> Ty -> [Name]
+nonPhantomTyNames phantomMap (TyCon n args) =
+  n : concatMap processArg (zip [0 ..] args)
+  where
+    phantomIdxs = Map.findWithDefault Set.empty n phantomMap
+    processArg (i, arg)
+      | Set.member i phantomIdxs = []
+      | otherwise = nonPhantomTyNames phantomMap arg
+nonPhantomTyNames _ _ = []
+
+buildTypeDepsGraph :: Set Name -> [DataTy] -> AdjacencyMap Name
+buildTypeDepsGraph userTypes dts =
+  overlay isolated edged
+  where
+    phantomMap = buildPhantomMap dts
+    isolated = vertices (Set.toList userTypes)
+    edged = stars [(dataName dt, deps dt) | dt <- dts]
+    deps (DataTy _ _ ctors) =
+      nub
+        . filter (`Set.member` userTypes)
+        . concatMap (\(Constr _ tys) -> concatMap (nonPhantomTyNames phantomMap) tys)
+        $ ctors
+
+checkRecursiveTypes :: [DataTy] -> TcM ()
+checkRecursiveTypes dts =
+  case cyclicSccs of
+    [] -> pure ()
+    (c : _) -> recursiveTypeError (NAG.vertexList1 c)
+  where
+    userTypes = Set.fromList (map dataName dts)
+    graph = buildTypeDepsGraph userTypes dts
+    cyclicSccs = filter (isCyclic graph) (vertexList (scc graph))
+    isCyclic origGraph sccComp =
+      case N.toList (NAG.vertexList1 sccComp) of
+        [v] -> hasEdge v v origGraph -- singleton SCC: cyclic only if self-loop
+        _ -> True -- 2+ vertices: always a mutual cycle
+
+recursiveTypeError :: N.NonEmpty Name -> TcM a
+recursiveTypeError cycleVerts =
+  throwError $
+    unlines
+      [ "Recursive data type detected:",
+        "  " ++ intercalate ", " (map pretty (N.toList cycleVerts)),
+        "  (Data types must be non-recursive)"
+      ]
+
 -- setting up pragmas for type checking
 
 setupPragmas :: [Pragma] -> TcM ()
@@ -265,7 +369,7 @@ checkTopDecl _ = pure ()
 
 tcContract :: Contract Name -> TcM (Contract Id, [(Name, Scheme)])
 tcContract c@(Contract n vs cdecls) =
-  withLocalEnv $ withContractName n $ do
+  withLocalContractEnv $ withContractName n $ do
     ctx' <- gets ctx
     initializeEnv c
     decls' <- mapM tcDecl' cdecls
diff --git a/src/Solcore/Frontend/TypeInference/TcMonad.hs b/src/Solcore/Frontend/TypeInference/TcMonad.hs
index e44176cbe..0b7bdee83 100644
--- a/src/Solcore/Frontend/TypeInference/TcMonad.hs
+++ b/src/Solcore/Frontend/TypeInference/TcMonad.hs
@@ -417,6 +417,18 @@ withLocalEnv ta =
     putEnv savedCtx
     pure a
 
+-- Like withLocalEnv but also restores the typeTable, for contract scopes
+-- where data type names must not leak between sibling contracts.
+withLocalContractEnv :: TcM a -> TcM a
+withLocalContractEnv ta =
+  do
+    savedCtx <- gets ctx
+    savedTypes <- gets typeTable
+    a <- ta
+    putEnv savedCtx
+    modify (\env -> env {typeTable = savedTypes})
+    pure a
+
 envList :: TcM [(Name, Scheme)]
 envList = gets (Map.toList . ctx)
 
diff --git a/test/Cases.hs b/test/Cases.hs
index 0198a73a1..58a46359b 100644
--- a/test/Cases.hs
+++ b/test/Cases.hs
@@ -243,6 +243,7 @@ cases =
       runTestForFile "const.solc" caseFolder,
       runTestExpectingFailure "const-array.solc" caseFolder,
       runTestForFile "constructor-weak-args.solc" caseFolder,
+      runTestForFile "constructors-contract.solc" caseFolder,
       runTestExpectingFailure "complexproxy.solc" caseFolder,
       runTestForFile "cyclical-defs.solc" caseFolder,
       runTestForFile "cyclical-defs-inferred.solc" caseFolder,
@@ -263,12 +264,12 @@ cases =
       runTestExpectingFailure "duplicated-type-name.solc" caseFolder,
       runTestForFile "DuplicateFun.solc" caseFolder,
       runTestExpectingFailure "DupFun.solc" caseFolder,
-      runTestForFile "EitherModule.solc" caseFolder,
+      runTestExpectingFailure "EitherModule.solc" caseFolder,
       runTestForFile "empty-asm.solc" caseFolder,
       runTestExpectingFailure "Enum.solc" caseFolder,
       runTestExpectingFailure "Eq.solc" caseFolder,
       runTestForFile "EqQual.solc" caseFolder,
-      runTestForFile "EvenOdd.solc" caseFolder,
+      runTestExpectingFailure "EvenOdd.solc" caseFolder,
       runTestExpectingFailure "Filter.solc" caseFolder,
       runTestForFile "foo-class.solc" caseFolder,
       runTestForFile "Foo.solc" caseFolder,
@@ -293,8 +294,8 @@ cases =
       runTestExpectingFailure "joinErr.solc" caseFolder,
       runTestExpectingFailure "KindTest.solc" caseFolder,
       runTestExpectingFailure "listeq.solc" caseFolder,
-      runTestForFile "ListModule.solc" caseFolder,
-      runTestForFile "listid.solc" caseFolder,
+      runTestExpectingFailure "ListModule.solc" caseFolder,
+      runTestExpectingFailure "listid.solc" caseFolder,
       runTestForFile "Logic.solc" caseFolder,
       runTestExpectingFailure "mainproxy.solc" caseFolder,
       runTestForFile "MatchCall.solc" caseFolder,
@@ -309,6 +310,7 @@ cases =
       runTestForFile "monomorphic-require.solc" caseFolder,
       runTestForFile "morefun.solc" caseFolder,
       runTestForFile "Mutuals.solc" caseFolder,
+      runTestForFile "rec-memory.solc" caseFolder,
       runTestExpectingFailure "nano-desugared.solc" caseFolder,
       runTestForFile "NegPair.solc" caseFolder,
       runTestForFile "nid.solc" caseFolder,
@@ -323,8 +325,8 @@ cases =
       runTestExpectingFailure "PairMatch2.solc" caseFolder,
       -- failing due to missing assign constraint
       runTestExpectingFailure "patterson-bug.solc" caseFolder,
-      runTestForFile "Peano.solc" caseFolder,
-      runTestForFile "PeanoMatch.solc" caseFolder,
+      runTestExpectingFailure "Peano.solc" caseFolder,
+      runTestExpectingFailure "PeanoMatch.solc" caseFolder,
       runTestForFile "polymatch-error.solc" caseFolder,
       runTestForFile "polymorphic-require.solc" caseFolder,
       runTestExpectingFailure "pragma_merge_fail_coverage.solc" caseFolder,
@@ -336,6 +338,8 @@ cases =
       runTestForFile "proxy.solc" caseFolder,
       runTestExpectingFailure "proxy1.solc" caseFolder,
       runTestForFile "rec.solc" caseFolder,
+      runTestExpectingFailure "recursive-type-direct.solc" caseFolder,
+      runTestExpectingFailure "recursive-type-mutual.solc" caseFolder,
       runTestExpectingFailure "require-annotation-missing-param.solc" caseFolder,
       runTestExpectingFailure "require-annotation-missing-return.solc" caseFolder,
       runTestExpectingFailure "require-annotation-missing-both.solc" caseFolder,
@@ -375,7 +379,7 @@ cases =
       runTestExpectingFailure "subject-index.solc" caseFolder,
       runTestExpectingFailure "subject-reduction.solc" caseFolder,
       runTestExpectingFailure "subsumption-test.solc" caseFolder,
-      runTestForFile "super-class.solc" caseFolder,
+      runTestExpectingFailure "super-class.solc" caseFolder,
       runTestForFile "super-class-num.solc" caseFolder,
       runTestForFile "tiamat.solc" caseFolder,
       runTestForFile "tuple-trick.solc" caseFolder,
@@ -423,6 +427,7 @@ cases =
       runTestForFile "redundant-match.solc" caseFolder,
       runTestForFile "false-redundant-warning.solc" caseFolder,
       runTestForFile "proxy-desugar.solc" caseFolder,
+      runTestForFile "box.solc" caseFolder,
       runTestForFile "invokable-issue.solc" caseFolder,
       runTestForFile "td.solc" caseFolder,
       runTestForFile "bar.solc" caseFolder,
@@ -450,7 +455,8 @@ cases =
       runTestForFile "ltimp.solc" caseFolder,
       runTestExpectingFailure "class-return-type-miss.solc" caseFolder,
       runTestExpectingFailure "catenable-err.solc" caseFolder,
-      runTestForFile "pars.solc" caseFolder
+      runTestForFile "pars.solc" caseFolder,
+      runTestExpectingFailure "synonym-example.solc" caseFolder
     ]
   where
     caseFolder = "./test/examples/cases"
diff --git a/test/examples/cases/Ackermann.solc b/test/examples/cases/Ackermann.solc
index c2181cc01..de305844a 100644
--- a/test/examples/cases/Ackermann.solc
+++ b/test/examples/cases/Ackermann.solc
@@ -1,4 +1,6 @@
-data Nat = Zero | Succ(Nat) ;
+data memory(a) = memory(word);
+
+data Nat = Zero | Succ(memory(Nat)) ;
 
 function foo (x : Nat, y : Nat) -> word {
   match y, x {
diff --git a/test/examples/cases/EitherModule.solc b/test/examples/cases/EitherModule.solc
index 347af8baa..49a604e23 100644
--- a/test/examples/cases/EitherModule.solc
+++ b/test/examples/cases/EitherModule.solc
@@ -1,6 +1,7 @@
 contract EitherModule {
+  data memory(a) = memory(word);
   data Either(a,b) = Left(a) | Right(b);
-  data List(a) = Nil | Cons(a,List(a));
+  data List(a) = Nil | Cons(a, memory(List(a)));
 
   function lefts(xs : List(Either(word,word))) -> List(word) {
     match xs {
diff --git a/test/examples/cases/box.solc b/test/examples/cases/box.solc
new file mode 100644
index 000000000..060928a85
--- /dev/null
+++ b/test/examples/cases/box.solc
@@ -0,0 +1,3 @@
+data memory(a) = memory(word);
+data Box(a) = Box(memory(a));
+data Rec = Rec(Box(Rec));
diff --git a/test/examples/cases/constructors-contract.solc b/test/examples/cases/constructors-contract.solc
new file mode 100644
index 000000000..6ea5bd923
--- /dev/null
+++ b/test/examples/cases/constructors-contract.solc
@@ -0,0 +1,9 @@
+contract A {
+  data T = MkT(U);
+  data U = MkU(word);
+}
+
+contract B {
+  data T = MkT2(word);
+  data U = MkU2(T);
+}
diff --git a/test/examples/cases/rec-memory.solc b/test/examples/cases/rec-memory.solc
new file mode 100644
index 000000000..f3807c4f6
--- /dev/null
+++ b/test/examples/cases/rec-memory.solc
@@ -0,0 +1,3 @@
+data memory(a) = memory(word);
+
+data List(a) = Nil | Cons(a, memory(List(a)));
diff --git a/test/examples/cases/recursive-type-direct.solc b/test/examples/cases/recursive-type-direct.solc
new file mode 100644
index 000000000..ff180526c
--- /dev/null
+++ b/test/examples/cases/recursive-type-direct.solc
@@ -0,0 +1,9 @@
+-- Direct recursion: Nat refers to itself in the Succ constructor.
+-- Expected: type checker rejects with "Recursive data type detected".
+data Nat = Zero | Succ(Nat);
+
+contract RecursiveTypeDirect {
+  function main() -> Nat {
+    Zero
+  }
+}
diff --git a/test/examples/cases/recursive-type-mutual.solc b/test/examples/cases/recursive-type-mutual.solc
new file mode 100644
index 000000000..8b4452438
--- /dev/null
+++ b/test/examples/cases/recursive-type-mutual.solc
@@ -0,0 +1,10 @@
+-- Mutual recursion: Even refers to Odd and Odd refers to Even.
+-- Expected: type checker rejects with "Recursive data type detected".
+data Even = Zero | SuccE(Odd);
+data Odd  = SuccO(Even);
+
+contract RecursiveTypeMutual {
+  function main() -> Even {
+    Zero
+  }
+}
diff --git a/test/examples/cases/synonym-example.solc b/test/examples/cases/synonym-example.solc
new file mode 100644
index 000000000..bae9ff259
--- /dev/null
+++ b/test/examples/cases/synonym-example.solc
@@ -0,0 +1,3 @@
+
+type Ref = T;
+data T = Mk(Ref);
diff --git a/test/examples/pragmas/coverage.solc b/test/examples/pragmas/coverage.solc
index c412dc914..62f2ba545 100644
--- a/test/examples/pragmas/coverage.solc
+++ b/test/examples/pragmas/coverage.solc
@@ -1,6 +1,8 @@
 pragma no-coverage-condition ;
 
-data List(a) = Nil | Cons(a,List(a));
+data memory(a) = memory(word);
+
+data List(a) = Nil | Cons(a,memory(List(a)));
 data Bool = True | False ;
 
 forall a b c . class a : C(b,c) {}