diff --git a/heat/engine/service.py b/heat/engine/service.py
index a7c8b9c03..cb8896135 100644
--- a/heat/engine/service.py
+++ b/heat/engine/service.py
@@ -1245,7 +1245,6 @@ class EngineService(service.ServiceBase):
                              service_check_defer=service_check_defer)
         try:
             stack.validate(ignorable_errors=ignorable_errors,
-                           validate_by_deps=False,
                            validate_res_tmpl_only=True)
         except exception.StackValidationFailed as ex:
             return {'Error': six.text_type(ex)}
diff --git a/heat/engine/stack.py b/heat/engine/stack.py
index 4c5bfd53e..afc12316f 100644
--- a/heat/engine/stack.py
+++ b/heat/engine/stack.py
@@ -163,6 +163,7 @@ class Stack(collections.Mapping):
         self._outputs = None
         self._resources = None
         self._dependencies = None
+        self._implicit_deps_loaded = False
         self._access_allowed_handlers = {}
         self._db_resources = None
         self._tags = tags
@@ -409,12 +410,15 @@ class Stack(collections.Mapping):
 
     @property
     def dependencies(self):
-        if self._dependencies is None:
-            self._dependencies = self._get_dependencies(
-                ignore_errors=self.id is not None)
+        if not self._implicit_deps_loaded:
+            self._explicit_dependencies()
+            self._add_implicit_dependencies(self._dependencies,
+                                            ignore_errors=self.id is not None)
+            self._implicit_deps_loaded = True
         return self._dependencies
 
     def reset_dependencies(self):
+        self._implicit_deps_loaded = False
         self._dependencies = None
 
     def root_stack_id(self):
@@ -486,12 +490,23 @@ class Stack(collections.Mapping):
         return set(itertools.chain.from_iterable(
             res.dep_attrs(resource_name) for res in resources))
 
-    def _get_dependencies(self, ignore_errors=True):
-        """Return the dependency graph for a list of resources."""
-        deps = dependencies.Dependencies()
-        for res in six.itervalues(self.resources):
-            res.add_explicit_dependencies(deps)
+    def _explicit_dependencies(self):
+        """Return dependencies without making any resource plugin calls.
 
+        This includes at least all of the dependencies that are explicitly
+        expressed in the template (via depends_on or an intrinsic function). It
+        may include implicit dependencies defined by resource plugins, but only
+        if they have already been calculated.
+        """
+        if self._dependencies is None:
+            deps = dependencies.Dependencies()
+            for res in six.itervalues(self.resources):
+                res.add_explicit_dependencies(deps)
+            self._dependencies = deps
+        return self._dependencies
+
+    def _add_implicit_dependencies(self, deps, ignore_errors=True):
+        """Augment the given dependencies with implicit ones from plugins."""
         for res in six.itervalues(self.resources):
             try:
                 res.add_dependencies(deps)
@@ -504,8 +519,6 @@ class Stack(collections.Mapping):
                                 {'res': six.text_type(res),
                                  'err': six.text_type(exc)})
 
-        return deps
-
     @classmethod
     def load(cls, context, stack_id=None, stack=None, show_deleted=True,
              use_stored_context=False, force_reload=False, cache_data=None,
@@ -801,8 +814,7 @@ class Stack(collections.Mapping):
         return handler and handler(resource_name)
 
     @profiler.trace('Stack.validate', hide_args=False)
-    def validate(self, ignorable_errors=None, validate_by_deps=True,
-                 validate_res_tmpl_only=False):
+    def validate(self, ignorable_errors=None, validate_res_tmpl_only=False):
         """Validates the stack."""
         # TODO(sdake) Should return line number of invalid reference
 
@@ -844,10 +856,10 @@ class Stack(collections.Mapping):
             raise exception.StackValidationFailed(
                 message=_("Duplicate names %s") % dup_names)
 
-        if validate_by_deps:
+        if self.strict_validate:
             iter_rsc = self.dependencies
         else:
-            iter_rsc = six.itervalues(resources)
+            iter_rsc = self._explicit_dependencies()
 
         unique_defns = set(res.t for res in six.itervalues(resources))
         unique_defn_names = set(defn.name for defn in unique_defns)
diff --git a/heat/tests/test_validate.py b/heat/tests/test_validate.py
index ba3af9f5d..128e093f3 100644
--- a/heat/tests/test_validate.py
+++ b/heat/tests/test_validate.py
@@ -21,6 +21,7 @@ from heat.common.i18n import _
 from heat.common import template_format
 from heat.common import urlfetch
 from heat.engine.clients.os import glance
+from heat.engine import dependencies
 from heat.engine import environment
 from heat.engine.hot import template as hot_tmpl
 from heat.engine import resources
@@ -898,6 +899,21 @@ outputs:
     value: {get_attr: [[random_str, value]]}
 '''
 
+test_template_circular_reference = '''
+heat_template_version: 2013-05-23
+
+resources:
+  res1:
+    type: OS::Heat::None
+    depends_on: res3
+  res2:
+    type: OS::Heat::None
+    depends_on: res1
+  res3:
+    type: OS::Heat::None
+    depends_on: res2
+'''
+
 
 test_template_external_rsrc = '''
 heat_template_version: pike
@@ -1834,3 +1850,12 @@ parameter_groups:
             return_value={'id': 'foobar'}
         ):
             self.assertIsNone(stack.validate(validate_res_tmpl_only=False))
+
+    def test_validate_circular_reference(self):
+        t = template_format.parse(test_template_circular_reference)
+
+        exc = self.assertRaises(dispatcher.ExpectedException,
+                                self.engine.validate_template,
+                                self.ctx, t, {})
+        self.assertEqual(dependencies.CircularDependencyException,
+                         exc.exc_info[0])