diff --git a/monai/data/utils.py b/monai/data/utils.py
index 64bd79c712..5f1f8f9388 100644
--- a/monai/data/utils.py
+++ b/monai/data/utils.py
@@ -686,28 +686,40 @@ def worker_init_fn(worker_id: int) -> None:
     set_rnd(worker_info.dataset, seed=worker_info.seed)  # type: ignore[union-attr]
 
 
-def set_rnd(obj, seed: int) -> int:
+def set_rnd(obj, seed: int, _seen: set[int] | None = None) -> int:
     """
     Set seed or random state for all randomizable properties of obj.
 
     Args:
         obj: object to set seed or random state for.
         seed: set the random state with an integer seed.
+        _seen: internal set of already-visited object ids, used to guard against
+            infinite recursion on cyclic object graphs (e.g. OmegaConf/Hydra
+            configs whose child nodes back-reference their parent, see issue #8087).
     """
+    if _seen is None:
+        _seen = set()
     if isinstance(obj, (tuple, list)):  # ZipDataset.data is a list
-        _seed = seed
+        if id(obj) in _seen:
+            return seed
+        _seen.add(id(obj))
+        has_randomizable = False
         for item in obj:
-            _seed = set_rnd(item, seed=seed)
-        return seed if _seed == seed else seed + 1  # return a different seed if there are randomizable items
+            item_seed = set_rnd(item, seed=seed, _seen=_seen)
+            has_randomizable = has_randomizable or item_seed != seed
+        return seed + 1 if has_randomizable else seed
     if not hasattr(obj, "__dict__"):
         return seed  # no attribute
+    if id(obj) in _seen:
+        return seed  # already visited: avoid infinite recursion on cyclic references
+    _seen.add(id(obj))
     if hasattr(obj, "set_random_state"):
         obj.set_random_state(seed=seed % MAX_SEED)
         return seed + 1  # a different seed for the next component
     for key in obj.__dict__:
         if key.startswith("__"):  # skip the private methods
             continue
-        seed = set_rnd(obj.__dict__[key], seed=seed)
+        seed = set_rnd(obj.__dict__[key], seed=seed, _seen=_seen)
     return seed
 
 
diff --git a/tests/data/test_dataloader.py b/tests/data/test_dataloader.py
index 32e624a860..ea1ba43034 100644
--- a/tests/data/test_dataloader.py
+++ b/tests/data/test_dataloader.py
@@ -12,6 +12,7 @@
 from __future__ import annotations
 
 import sys
+import types
 import unittest
 
 import numpy as np
@@ -19,6 +20,7 @@
 from parameterized import parameterized
 
 from monai.data import CacheDataset, DataLoader, Dataset, ZipDataset
+from monai.data.utils import set_rnd
 from monai.transforms import Compose, DataStatsd, Randomizable, SimulateDelayd
 from monai.utils import convert_to_numpy, set_determinism
 from tests.test_utils import assert_allclose
@@ -27,6 +29,11 @@
 
 TEST_CASE_2 = [[{"label": torch.as_tensor([[3], [2]])}, {"label": np.asarray([[1], [2]])}]]
 
+_CYCLIC_DATASET_SIZE = 4
+_CYCLIC_BATCH_SIZE = 1
+_CYCLIC_NUM_WORKERS = 0
+_CYCLIC_TEST_SEED = 42
+
 
 class TestDataLoader(unittest.TestCase):
     def test_values(self):
@@ -99,5 +106,68 @@ def test_zipdataset(self):
         assert_allclose(np.stack(output).flatten()[:7], np.array([594, 170, 594, 170, 594, 170, 524]))
 
 
+class _CyclicConfigDataset(torch.utils.data.Dataset):
+    """
+    Dataset holding an attribute whose object graph contains a reference cycle.
+
+    This mirrors OmegaConf/Hydra configs, whose child nodes hold a back-reference
+    to their parent node. Seeding such a dataset used to recurse forever in
+    ``monai.data.utils.set_rnd`` (see issue #8087).
+    """
+
+    def __init__(self):
+        parent = types.SimpleNamespace()
+        child = types.SimpleNamespace()
+        parent.child = child
+        child.parent = parent  # reference cycle, as in an OmegaConf parent/child graph
+        self.cfg = parent
+
+    def __len__(self):
+        return _CYCLIC_DATASET_SIZE
+
+    def __getitem__(self, index):
+        return torch.tensor([index])
+
+
+class _SeedRecorder:
+    def __init__(self):
+        self.seed = None
+
+    def set_random_state(self, seed):
+        self.seed = seed
+
+
+class TestLoaderRecursion(unittest.TestCase):
+    def test_cyclic_reference_no_recursion(self):
+        # Constructing the loader seeds the dataset (num_workers=0). A reference cycle in the
+        # dataset's attributes must not raise RecursionError while walking the object graph.
+        dataloader = DataLoader(
+            _CyclicConfigDataset(), batch_size=_CYCLIC_BATCH_SIZE, num_workers=_CYCLIC_NUM_WORKERS, shuffle=False
+        )
+        self.assertEqual(len(list(dataloader)), _CYCLIC_DATASET_SIZE)
+
+    def test_cyclic_list_reference_no_recursion(self):
+        """Test seeding a dataset whose configuration list contains itself."""
+        dataset = _CyclicConfigDataset()
+        dataset.cfg = []
+        dataset.cfg.append(dataset.cfg)
+        dataloader = DataLoader(dataset, batch_size=_CYCLIC_BATCH_SIZE, num_workers=_CYCLIC_NUM_WORKERS, shuffle=False)
+        self.assertEqual(len(list(dataloader)), _CYCLIC_DATASET_SIZE)
+
+    def test_cyclic_list_preserves_seed_advancement(self):
+        """Test a cyclic list does not erase seed advancement from an earlier item."""
+        dataset = _CyclicConfigDataset()
+        nested_randomizable = _SeedRecorder()
+        following_randomizable = _SeedRecorder()
+        dataset.cfg = [nested_randomizable]
+        dataset.cfg.append(dataset.cfg)
+        dataset.following_randomizable = following_randomizable
+
+        set_rnd(dataset, seed=_CYCLIC_TEST_SEED)
+
+        self.assertEqual(nested_randomizable.seed, _CYCLIC_TEST_SEED)
+        self.assertEqual(following_randomizable.seed, _CYCLIC_TEST_SEED + 1)
+
+
 if __name__ == "__main__":
     unittest.main()