diff --git a/docs/options.md b/docs/options.md
index f2e9492b..4dfc3107 100644
--- a/docs/options.md
+++ b/docs/options.md
@@ -31,6 +31,9 @@ $RefParser.dereference("my-schema.yaml", {
     excludedPathMatcher: (
       path, // Skip dereferencing content under any 'example' key
     ) => path.includes("/example/"),
+    onCircular: (
+      path, // Callback invoked during circular $ref detection
+    ) => console.log(path),
     onDereference: (
       path,
       value, // Callback invoked during dereferencing
@@ -78,4 +81,5 @@ The `dereference` options control how JSON Schema $Ref Parser will dereference `
 | :-------------------- | :--------------------------------------------------------------------- | :---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
 | `circular`            | `boolean` or `"ignore"`                                                | Determines whether [circular `$ref` pointers](README.md#circular-refs) are handled.<br><br>If set to `false`, then a `ReferenceError` will be thrown if the schema contains any circular references.<br><br> If set to `"ignore"`, then circular references will simply be ignored. No error will be thrown, but the [`$Refs.circular`](refs.md#circular) property will still be set to `true`. |
 | `excludedPathMatcher` | `(string) => boolean`                                                  | A function, called for each path, which can return true to stop this path and all subpaths from being dereferenced further. This is useful in schemas where some subpaths contain literal `$ref` keys that should not be dereferenced.                                                                                                                                                          |
+| `onCircular`          | `(string) => void`                                                     | A function, called immediately after detecting a circular `$ref` with the circular `$ref` in question.                                                                                                                                                                                                                                                                                          |
 | `onDereference`       | `(string, JSONSchemaObjectType, JSONSchemaObjectType, string) => void` | A function, called immediately after dereferencing, with: the resolved JSON Schema value, the `$ref` being dereferenced, the object holding the dereferenced prop, the dereferenced prop name.                                                                                                                                                                                                  |
diff --git a/lib/dereference.ts b/lib/dereference.ts
index b56b58bb..886b2cbe 100644
--- a/lib/dereference.ts
+++ b/lib/dereference.ts
@@ -272,7 +272,8 @@ function dereference$Ref<S extends object = JSONSchema, O extends ParserOptions<
 
 /**
  * Called when a circular reference is found.
- * It sets the {@link $Refs#circular} flag, and throws an error if options.dereference.circular is false.
+ * It sets the {@link $Refs#circular} flag, executes the options.dereference.onCircular callback,
+ * and throws an error if options.dereference.circular is false.
  *
  * @param keyPath - The JSON Reference path of the circular reference
  * @param $refs
@@ -281,6 +282,8 @@ function dereference$Ref<S extends object = JSONSchema, O extends ParserOptions<
  */
 function foundCircularReference(keyPath: any, $refs: any, options: any) {
   $refs.circular = true;
+  options?.dereference?.onCircular?.(keyPath);
+
   if (!options.dereference.circular) {
     throw ono.reference(`Circular $ref pointer found at ${keyPath}`);
   }
diff --git a/lib/options.ts b/lib/options.ts
index 3dfbc02c..f7b9af8a 100644
--- a/lib/options.ts
+++ b/lib/options.ts
@@ -29,6 +29,13 @@ export interface DereferenceOptions {
    */
   excludedPathMatcher?(path: string): boolean;
 
+  /**
+   * Callback invoked during circular reference detection.
+   *
+   * @argument {string} path - The path that is circular (ie. the `$ref` string)
+   */
+  onCircular?(path: string): void;
+
   /**
    * Callback invoked during dereferencing.
    *
diff --git a/test/specs/circular-extended/circular-extended.spec.ts b/test/specs/circular-extended/circular-extended.spec.ts
index a8949c66..a92cc62b 100644
--- a/test/specs/circular-extended/circular-extended.spec.ts
+++ b/test/specs/circular-extended/circular-extended.spec.ts
@@ -43,7 +43,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(parser.$refs.circular).to.equal(true);
     });
 
-    it('should not dereference circular $refs if "options.$refs.circular" is "ignore"', async () => {
+    it('should not dereference circular $refs if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(path.rel("test/specs/circular-extended/circular-extended-self.yaml"), {
@@ -55,7 +55,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(parser.$refs.circular).to.equal(true);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
@@ -130,7 +130,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(schema.definitions.person.properties.pet.properties).to.equal(schema.definitions.pet.properties);
     });
 
-    it('should not dereference circular $refs if "options.$refs.circular" is "ignore"', async () => {
+    it('should not dereference circular $refs if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(
@@ -145,7 +145,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(parser.$refs.circular).to.equal(true);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
@@ -232,7 +232,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(schema.definitions.child.properties.pet.properties).to.equal(schema.definitions.pet.properties);
     });
 
-    it('should not dereference circular $refs if "options.$refs.circular" is "ignore"', async () => {
+    it('should not dereference circular $refs if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(
@@ -247,7 +247,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(parser.$refs.circular).to.equal(true);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
@@ -335,7 +335,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(schema.definitions.pet.properties).to.equal(schema.definitions.child.properties.pet.properties);
     });
 
-    it('should not dereference circular $refs if "options.$refs.circular" is "ignore"', async () => {
+    it('should not dereference circular $refs if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(
@@ -348,7 +348,7 @@ describe("Schema with circular $refs that extend each other", () => {
       expect(parser.$refs.circular).to.equal(true);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
diff --git a/test/specs/circular-external/circular-external.spec.ts b/test/specs/circular-external/circular-external.spec.ts
index 0f1b5379..4cdf62f6 100644
--- a/test/specs/circular-external/circular-external.spec.ts
+++ b/test/specs/circular-external/circular-external.spec.ts
@@ -53,7 +53,7 @@ describe("Schema with circular (recursive) external $refs", () => {
     expect(schema.definitions.child.properties.parents.items).to.equal(schema.definitions.parent);
   });
 
-  it('should throw an error if "options.$refs.circular" is false', async () => {
+  it('should throw an error if "options.dereference.circular" is false', async () => {
     const parser = new $RefParser();
 
     try {
diff --git a/test/specs/circular/circular.spec.ts b/test/specs/circular/circular.spec.ts
index 7c416287..da2e2526 100644
--- a/test/specs/circular/circular.spec.ts
+++ b/test/specs/circular/circular.spec.ts
@@ -54,7 +54,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(schema.definitions.child.properties.pet).to.equal(schema.definitions.pet);
     });
 
-    it('should produce the same results if "options.$refs.circular" is "ignore"', async () => {
+    it('should produce the same results if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(path.rel("test/specs/circular/circular-self.yaml"), {
@@ -66,7 +66,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(parser.$refs.circular).to.equal(true);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
@@ -87,6 +87,24 @@ describe("Schema with circular (recursive) $refs", () => {
       }
     });
 
+    it("should call onCircular if `options.dereference.onCircular` is present", async () => {
+      const parser = new $RefParser();
+
+      const circularRefs: string[] = [];
+      const schema = await parser.dereference(path.rel("test/specs/circular/circular-self.yaml"), {
+        dereference: {
+          onCircular(path: string) {
+            circularRefs.push(path);
+          },
+        },
+      });
+      expect(schema).to.equal(parser.schema);
+      expect(schema).to.deep.equal(dereferencedSchema.self);
+      // The "circular" flag should be set
+      expect(parser.$refs.circular).to.equal(true);
+      expect(circularRefs).to.have.length(1);
+    });
+
     it("should bundle successfully", async () => {
       const parser = new $RefParser();
       const schema = await parser.bundle(path.rel("test/specs/circular/circular-self.yaml"));
@@ -149,7 +167,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(schema.definitions.person.properties.pet).to.equal(schema.definitions.pet);
     });
 
-    it('should not dereference circular $refs if "options.$refs.circular" is "ignore"', async () => {
+    it('should not dereference circular $refs if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(path.rel("test/specs/circular/circular-ancestor.yaml"), {
@@ -164,7 +182,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(schema.definitions.person.properties.pet).to.equal(schema.definitions.pet);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
@@ -247,7 +265,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(schema.definitions.child.properties.parents.items).to.equal(schema.definitions.parent);
     });
 
-    it('should not dereference circular $refs if "options.$refs.circular" is "ignore"', async () => {
+    it('should not dereference circular $refs if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(path.rel("test/specs/circular/circular-indirect.yaml"), {
@@ -262,7 +280,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(schema.definitions.child.properties.pet).to.equal(schema.definitions.pet);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
@@ -347,7 +365,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(schema.definitions.child.properties.children.items).to.equal(schema.definitions.child);
     });
 
-    it('should not dereference circular $refs if "options.$refs.circular" is "ignore"', async () => {
+    it('should not dereference circular $refs if "options.dereference.circular" is "ignore"', async () => {
       const parser = new $RefParser();
 
       const schema = await parser.dereference(path.rel("test/specs/circular/circular-indirect-ancestor.yaml"), {
@@ -362,7 +380,7 @@ describe("Schema with circular (recursive) $refs", () => {
       expect(schema.definitions.child.properties.pet).to.equal(schema.definitions.pet);
     });
 
-    it('should throw an error if "options.$refs.circular" is false', async () => {
+    it('should throw an error if "options.dereference.circular" is false', async () => {
       const parser = new $RefParser();
 
       try {
diff --git a/test/specs/deep-circular/deep-circular.spec.ts b/test/specs/deep-circular/deep-circular.spec.ts
index ec432869..d23e50b8 100644
--- a/test/specs/deep-circular/deep-circular.spec.ts
+++ b/test/specs/deep-circular/deep-circular.spec.ts
@@ -55,7 +55,7 @@ describe("Schema with deeply-nested circular $refs", () => {
       .to.equal(schema.properties.level1.properties.level2.properties.level3.properties.level4.properties.name);
   });
 
-  it('should throw an error if "options.$refs.circular" is false', async () => {
+  it('should throw an error if "options.dereference.circular" is false', async () => {
     const parser = new $RefParser();
 
     try {