diff --git a/crates/ty_python_semantic/resources/corpus/cyclic_comprehensions.py b/crates/ty_python_semantic/resources/corpus/cyclic_comprehensions.py
new file mode 100644
index 0000000000..28ba9d9091
--- /dev/null
+++ b/crates/ty_python_semantic/resources/corpus/cyclic_comprehensions.py
@@ -0,0 +1,10 @@
+# Regression test for https://github.com/astral-sh/ruff/pull/20962
+# error message:
+# `infer_definition_types(Id(1804)): execute: too many cycle iterations`
+
+for name_1 in {
+    {{0: name_4 for unique_name_0 in unique_name_1}: 0 for unique_name_2 in unique_name_3 if name_4}: 0
+    for unique_name_4 in name_1
+    for name_4 in name_1
+}:
+    pass
diff --git a/crates/ty_python_semantic/resources/mdtest/regression/pr_20962_comprehension_panics.md b/crates/ty_python_semantic/resources/mdtest/regression/pr_20962_comprehension_panics.md
index b011d95e8c..97bbf21049 100644
--- a/crates/ty_python_semantic/resources/mdtest/regression/pr_20962_comprehension_panics.md
+++ b/crates/ty_python_semantic/resources/mdtest/regression/pr_20962_comprehension_panics.md
@@ -35,16 +35,3 @@ else:
 async def name_5():
     pass
 ```
-
-## Too many cycle iterations in `infer_definition_types`
-
-<!-- expect-panic: too many cycle iterations -->
-
-```py
-for name_1 in {
-    {{0: name_4 for unique_name_0 in unique_name_1}: 0 for unique_name_2 in unique_name_3 if name_4}: 0
-    for unique_name_4 in name_1
-    for name_4 in name_1
-}:
-    pass
-```
diff --git a/crates/ty_python_semantic/src/types.rs b/crates/ty_python_semantic/src/types.rs
index ffe0f3066b..e79282a35d 100644
--- a/crates/ty_python_semantic/src/types.rs
+++ b/crates/ty_python_semantic/src/types.rs
@@ -873,6 +873,10 @@ impl<'db> Type<'db> {
         matches!(self, Type::Dynamic(_))
     }
 
+    const fn is_non_divergent_dynamic(&self) -> bool {
+        self.is_dynamic() && !self.is_divergent()
+    }
+
     /// Is a value of this type only usable in typing contexts?
     pub(crate) fn is_type_check_only(&self, db: &'db dyn Db) -> bool {
         match self {
@@ -1695,22 +1699,33 @@ impl<'db> Type<'db> {
             // holds true if `T` is also a dynamic type or a union that contains a dynamic type.
             // Similarly, `T <: Any` only holds true if `T` is a dynamic type or an intersection
             // that contains a dynamic type.
-            (Type::Dynamic(_), _) => ConstraintSet::from(match relation {
-                TypeRelation::Subtyping => false,
-                TypeRelation::Assignability => true,
-                TypeRelation::Redundancy => match target {
-                    Type::Dynamic(_) => true,
-                    Type::Union(union) => union.elements(db).iter().any(Type::is_dynamic),
-                    _ => false,
-                },
-            }),
+            (Type::Dynamic(dynamic), _) => {
+                // If a `Divergent` type is involved, it must not be eliminated.
+                debug_assert!(
+                    !matches!(dynamic, DynamicType::Divergent(_)),
+                    "DynamicType::Divergent should have been handled in an earlier branch"
+                );
+                ConstraintSet::from(match relation {
+                    TypeRelation::Subtyping => false,
+                    TypeRelation::Assignability => true,
+                    TypeRelation::Redundancy => match target {
+                        Type::Dynamic(_) => true,
+                        Type::Union(union) => union.elements(db).iter().any(Type::is_dynamic),
+                        _ => false,
+                    },
+                })
+            }
             (_, Type::Dynamic(_)) => ConstraintSet::from(match relation {
                 TypeRelation::Subtyping => false,
                 TypeRelation::Assignability => true,
                 TypeRelation::Redundancy => match self {
                     Type::Dynamic(_) => true,
                     Type::Intersection(intersection) => {
-                        intersection.positive(db).iter().any(Type::is_dynamic)
+                        // If a `Divergent` type is involved, it must not be eliminated.
+                        intersection
+                            .positive(db)
+                            .iter()
+                            .any(Type::is_non_divergent_dynamic)
                     }
                     _ => false,
                 },
@@ -9991,6 +10006,10 @@ pub(crate) enum TypeRelation {
     /// materialization of `Any` and `int | Any` may be the same type (`object`), but the
     /// two differ in their bottom materializations (`Never` and `int`, respectively).
     ///
+    /// Despite the above principles, there is one exceptional type that should never be union-simplified: the `Divergent` type.
+    /// This is a kind of dynamic type, but it acts as a marker to track recursive type structures.
+    /// If this type is accidentally eliminated by simplification, the fixed-point iteration will not converge.
+    ///
     /// [fully static]: https://typing.python.org/en/latest/spec/glossary.html#term-fully-static-type
     /// [materializations]: https://typing.python.org/en/latest/spec/glossary.html#term-materialize
     Redundancy,
@@ -12103,6 +12122,27 @@ pub(crate) mod tests {
         assert!(div.is_equivalent_to(&db, div));
         assert!(!div.is_equivalent_to(&db, Type::unknown()));
         assert!(!Type::unknown().is_equivalent_to(&db, div));
+        assert!(!div.is_redundant_with(&db, Type::unknown()));
+        assert!(!Type::unknown().is_redundant_with(&db, div));
+
+        let truthy_div = IntersectionBuilder::new(&db)
+            .add_positive(div)
+            .add_negative(Type::AlwaysFalsy)
+            .build();
+
+        let union = UnionType::from_elements(&db, [Type::unknown(), truthy_div]);
+        assert!(!truthy_div.is_redundant_with(&db, Type::unknown()));
+        assert_eq!(
+            union.display(&db).to_string(),
+            "Unknown | (Divergent & ~AlwaysFalsy)"
+        );
+
+        let union = UnionType::from_elements(&db, [truthy_div, Type::unknown()]);
+        assert!(!Type::unknown().is_redundant_with(&db, truthy_div));
+        assert_eq!(
+            union.display(&db).to_string(),
+            "(Divergent & ~AlwaysFalsy) | Unknown"
+        );
 
         // The `object` type has a good convergence property, that is, its union with all other types is `object`.
         // (e.g. `object | tuple[Divergent] == object`, `object | tuple[object] == object`)