diff --git a/benchmark/parse_doctype.yaml b/benchmark/parse_doctype.yaml
new file mode 100644
index 00000000..41a5cc98
--- /dev/null
+++ b/benchmark/parse_doctype.yaml
@@ -0,0 +1,77 @@
+loop_count: 100
+contexts:
+  - gems:
+      rexml: 3.2.6
+    require: false
+    prelude: require 'rexml'
+  - name: master
+    prelude: |
+      $LOAD_PATH.unshift(File.expand_path("lib"))
+      require 'rexml'
+  - name: 3.2.6(YJIT)
+    gems:
+      rexml: 3.2.6
+    require: false
+    prelude: |
+      require 'rexml'
+      RubyVM::YJIT.enable
+  - name: master(YJIT)
+    prelude: |
+      $LOAD_PATH.unshift(File.expand_path("lib"))
+      require 'rexml'
+      RubyVM::YJIT.enable
+
+prelude: |
+  require 'rexml/document'
+  require 'rexml/parsers/sax2parser'
+  require 'rexml/parsers/streamparser'
+  require 'rexml/streamlistener'
+
+  # Single entity reference: <!ENTITY foo "bar">  ->  &foo;
+  single_entity_xml = <<~XML
+    <!DOCTYPE root [
+      <!ENTITY word "hello">
+    ]>
+    <root>&word;</root>
+  XML
+
+  # Chained entity references: a -> b -> c -> ... -> value (n_depth levels deep)
+  n_depth = 100
+  chained_entities_xml = <<~XML
+    <!DOCTYPE root [
+      #{(1..n_depth).map {|i| i == n_depth ? "<!ENTITY e#{i} \"value\">" : "<!ENTITY e#{i} \"&e#{i+1};\">" }.join("\n")}
+    ]>
+    <root>&e1;</root>
+  XML
+
+  # Many distinct entities referenced in document content
+  n_entities = 100
+  many_entities_xml = <<~XML
+    <!DOCTYPE root [
+      #{(1..n_entities).map {|i| "<!ENTITY ent#{i} \"value#{i}\">" }.join("\n")}
+    ]>
+    <root>#{(1..n_entities).map {|i| "&ent#{i};" }.join}</root>
+  XML
+
+  # Same entity referenced repeatedly in attribute values
+  n_items = 100
+  repeated_entity_xml = <<~XML
+    <!DOCTYPE root [
+      <!ENTITY word "hello">
+    ]>
+    <root>#{'<item val="&word;">&word;</item>' * n_items}</root>
+  XML
+
+  class Listener
+    include REXML::StreamListener
+  end
+
+benchmark:
+  'single_entity(dom)'      : REXML::Document.new(single_entity_xml).root.text
+  'single_entity(stream)'   : REXML::Parsers::StreamParser.new(single_entity_xml, Listener.new).parse
+  'chained_entities(dom)'   : REXML::Document.new(chained_entities_xml).root.text
+  'chained_entities(stream)': REXML::Parsers::StreamParser.new(chained_entities_xml, Listener.new).parse
+  'many_entities(dom)'      : REXML::Document.new(many_entities_xml).root.text
+  'many_entities(stream)'   : REXML::Parsers::StreamParser.new(many_entities_xml, Listener.new).parse
+  'repeated_entity(dom)'    : REXML::Document.new(repeated_entity_xml).root.text
+  'repeated_entity(stream)' : REXML::Parsers::StreamParser.new(repeated_entity_xml, Listener.new).parse
diff --git a/lib/rexml/doctype.rb b/lib/rexml/doctype.rb
index a9cf9f7e..d4f0bbe4 100644
--- a/lib/rexml/doctype.rb
+++ b/lib/rexml/doctype.rb
@@ -174,8 +174,8 @@ def context
       @parent&.context
     end
 
-    def entity( name )
-      @entities[name]&.unnormalized
+    def entity( name, expanding: nil )
+      @entities[name]&.unnormalized(expanding: expanding)
     end
 
     def add child
diff --git a/lib/rexml/entity.rb b/lib/rexml/entity.rb
index 1ba5a7bb..f55088fc 100644
--- a/lib/rexml/entity.rb
+++ b/lib/rexml/entity.rb
@@ -1,5 +1,7 @@
 # frozen_string_literal: false
+require 'set'
 require_relative 'child'
+require_relative 'parseexception'
 require_relative 'source'
 require_relative 'xmltokens'
 
@@ -70,13 +72,20 @@ def Entity::matches? string
 
     # Evaluates to the unnormalized value of this entity; that is, replacing
     # &ent; entities.
-    def unnormalized
+    def unnormalized(expanding: nil)
       document&.record_entity_expansion
 
       return nil if @value.nil?
 
-      @unnormalized = Text::unnormalize(@value, parent,
-                                        entity_expansion_text_limit: document&.entity_expansion_text_limit)
+      expanding ||= Set.new
+      raise REXML::ParseException.new("Detected an entity reference loop: #{@name}") if expanding.include?(@name)
+
+      expanding.add(@name)
+      result = Text::unnormalize(@value, parent,
+                                 entity_expansion_text_limit: document&.entity_expansion_text_limit,
+                                 expanding: expanding)
+      expanding.delete(@name)
+      result
     end
 
     #once :unnormalized
diff --git a/lib/rexml/parsers/baseparser.rb b/lib/rexml/parsers/baseparser.rb
index 0b48ec14..af8887e2 100644
--- a/lib/rexml/parsers/baseparser.rb
+++ b/lib/rexml/parsers/baseparser.rb
@@ -535,14 +535,20 @@ def pull_event
       end
       private :pull_event
 
-      def entity( reference, entities )
+      def entity( reference, entities, expanding: nil )
         return unless entities
 
         value = entities[ reference ]
         return if value.nil?
 
+        expanding ||= Set.new
+        raise REXML::ParseException.new("Detected an entity reference loop: #{reference}", @source) if expanding.include?(reference)
+
         record_entity_expansion
-        unnormalize( value, entities )
+        expanding.add(reference)
+        result = unnormalize( value, entities, nil, expanding: expanding )
+        expanding.delete(reference)
+        result
       end
 
       # Escapes all possible entities
@@ -562,7 +568,7 @@ def normalize( input, entities=nil, entity_filter=nil )
       end
 
       # Unescapes all possible entities
-      def unnormalize( string, entities=nil, filter=nil )
+      def unnormalize( string, entities=nil, filter=nil, expanding: nil )
         if string.include?("\r")
           rv = string.gsub( Private::CARRIAGE_RETURN_NEWLINE_PATTERN, "\n" )
         else
@@ -588,7 +594,7 @@ def unnormalize( string, entities=nil, filter=nil )
         if matches.size > 0
           matches.tally.each do |entity_reference, n|
             entity_expansion_count_before = @entity_expansion_count
-            entity_value = entity( entity_reference, entities )
+            entity_value = entity( entity_reference, entities, expanding: expanding )
             if entity_value
               if n > 1
                 entity_expansion_count_delta =
diff --git a/lib/rexml/text.rb b/lib/rexml/text.rb
index 8d5281cd..2319cef8 100644
--- a/lib/rexml/text.rb
+++ b/lib/rexml/text.rb
@@ -384,11 +384,11 @@ def Text::normalize( input, doctype=nil, entity_filter=nil )
     end
 
     # Unescapes all possible entities
-    def Text::unnormalize( string, doctype=nil, filter=nil, illegal=nil, entity_expansion_text_limit: nil )
+    def Text::unnormalize( string, doctype=nil, filter=nil, illegal=nil, entity_expansion_text_limit: nil, expanding: nil )
       entity_expansion_text_limit ||= Security.entity_expansion_text_limit
       sum = 0
       string.gsub( /\r\n?/, "\n" ).gsub( REFERENCE ) {
-        s = Text.expand($&, doctype, filter)
+        s = Text.expand($&, doctype, filter, expanding: expanding)
         if sum + s.bytesize > entity_expansion_text_limit
           raise "entity expansion has grown too large"
         else
@@ -398,7 +398,7 @@ def Text::unnormalize( string, doctype=nil, filter=nil, illegal=nil, entity_expa
       }
     end
 
-    def Text.expand(ref, doctype, filter)
+    def Text.expand(ref, doctype, filter, expanding: nil)
       if ref[1] == ?#
         if ref[2] == ?x
           [ref[3...-1].to_i(16)].pack('U*')
@@ -410,7 +410,7 @@ def Text.expand(ref, doctype, filter)
       elsif filter and filter.include?( ref[1...-1] )
         ref
       elsif doctype
-        doctype.entity( ref[1...-1] ) or ref
+        doctype.entity( ref[1...-1], expanding: expanding ) or ref
       else
         entity_value = DocType::DEFAULT_ENTITIES[ ref[1...-1] ]
         entity_value ? entity_value.value : ref
diff --git a/test/test_entity.rb b/test/test_entity.rb
index 03f268dd..a96dc504 100644
--- a/test/test_entity.rb
+++ b/test/test_entity.rb
@@ -1,7 +1,10 @@
 # frozen_string_literal: false
 
+require 'rexml/document'
 require 'rexml/entity'
 require 'rexml/source'
+require 'rexml/parsers/streamparser'
+require 'rexml/streamlistener'
 
 module REXMLTests
   class EntityTester < Test::Unit::TestCase
@@ -241,6 +244,114 @@ def test_single_pass_unnormalization # ticket 123
       assert_equal '&amp;&', REXML::Text::unnormalize('&#38;amp;&amp;')
     end
 
+    def test_entity_direct_circular_reference
+      source = <<~XML
+        <!DOCTYPE root [
+          <!ENTITY x "&x;">
+        ]>
+        <root>&x;</root>
+      XML
+      listener = Class.new { include REXML::StreamListener }.new
+      parser = REXML::Parsers::StreamParser.new(source, listener)
+      exception = assert_raise(REXML::ParseException) do
+        parser.parse
+      end
+      assert_equal(<<-DETAIL.chomp, exception.to_s)
+Detected an entity reference loop: x
+Line: 4
+Position: 57
+Last 80 unconsumed characters:
+</root>\x20
+      DETAIL
+    end
+
+    def test_entity_indirect_circular_reference
+      source = <<~XML
+        <!DOCTYPE root [
+          <!ENTITY a "&b;">
+          <!ENTITY b "&a;">
+        ]>
+        <root>&a;</root>
+      XML
+      listener = Class.new { include REXML::StreamListener }.new
+      parser = REXML::Parsers::StreamParser.new(source, listener)
+      exception = assert_raise(REXML::ParseException) do
+        parser.parse
+      end
+      assert_equal(<<-DETAIL.chomp, exception.to_s)
+Detected an entity reference loop: a
+Line: 5
+Position: 77
+Last 80 unconsumed characters:
+</root>\x20
+      DETAIL
+    end
+
+    def test_entity_circular_reference_with_long_value
+      source = <<~XML
+        <!DOCTYPE root [
+          <!ENTITY x "#{"&amp;" * 100}&x;">
+        ]>
+        <root>&x;</root>
+      XML
+      listener = Class.new { include REXML::StreamListener }.new
+      parser = REXML::Parsers::StreamParser.new(source, listener)
+      exception = assert_raise(REXML::ParseException) do
+        parser.parse
+      end
+      assert_equal(<<-DETAIL.chomp, exception.to_s)
+Detected an entity reference loop: x
+Line: 4
+Position: 557
+Last 80 unconsumed characters:
+</root>\x20
+      DETAIL
+    end
+
+    def test_entity_direct_circular_reference_via_dom
+      source = <<~XML
+        <!DOCTYPE root [
+          <!ENTITY x "&x;">
+        ]>
+        <root>&x;</root>
+      XML
+      doc = REXML::Document.new(source)
+      exception = assert_raise(REXML::ParseException) do
+        doc.root.text
+      end
+      assert_equal("Detected an entity reference loop: x", exception.to_s)
+    end
+
+    def test_entity_indirect_circular_reference_via_dom
+      source = <<~XML
+        <!DOCTYPE root [
+          <!ENTITY a "&b;">
+          <!ENTITY b "&a;">
+        ]>
+        <root>&a;</root>
+      XML
+      doc = REXML::Document.new(source)
+      exception = assert_raise(REXML::ParseException) do
+        doc.root.text
+      end
+      assert_equal("Detected an entity reference loop: a", exception.to_s)
+    end
+
+    def test_entity_unnormalized_direct_circular_reference
+      source = <<~XML
+        <!DOCTYPE root [
+          <!ENTITY x "&x;">
+        ]>
+        <root/>
+      XML
+      doc = REXML::Document.new(source)
+      entity = doc.doctype.entities["x"]
+      exception = assert_raise(REXML::ParseException) do
+        entity.unnormalized
+      end
+      assert_equal("Detected an entity reference loop: x", exception.to_s)
+    end
+
     def test_entity_filter
       document = REXML::Document.new(<<-XML)
 <!DOCTYPE root [