How does TypeScript handle circular references in types?

TypeScript handles circular (self-referential) types through lazy evaluation — types are resolved on demand rather than eagerly. This prevents infinite loops in the type checker. Directly recursive interfaces: always valid — interface Node { children: Node[]; }. Directly recursive type aliases (TS 3.7+): valid when used in object types — type Node = { children: Node[] };. Previously, type aliases had to use interfaces for recursion. Mutually recursive types: two types that reference each other — type Even = { next: Odd } type Odd = { next: Even }; — valid. Limitations: TypeScript may produce simplified error messages for deeply recursive types and may limit recursion depth for complex generic recursive types (you sometimes see "Type instantiation is excessively deep" errors). Workarounds: use interface instead of type alias (interfaces are always lazily evaluated), reduce recursion depth, or use conditional type tricks to provide a base case.