diff --git a/src/build_vehicle_gui.cpp b/src/build_vehicle_gui.cpp
index 6c5e5223e3..9c869426e5 100644
--- a/src/build_vehicle_gui.cpp
+++ b/src/build_vehicle_gui.cpp
@@ -1422,7 +1422,7 @@ struct BuildVehicleWindow : Window {
 			list.emplace_back(eid, e->info.variant_id, e->display_flags, 0);
 
 			if (rvi->railveh_type != RAILVEH_WAGON) num_engines++;
-			if (e->info.variant_id != eid && e->info.variant_id != INVALID_ENGINE) variants.push_back(e->info.variant_id);
+			if (e->info.variant_id != INVALID_ENGINE) variants.push_back(e->info.variant_id);
 			if (eid == this->sel_engine) sel_id = eid;
 		}
 
@@ -1654,13 +1654,14 @@ struct BuildVehicleWindow : Window {
 						Command<CMD_BUILD_VEHICLE>::Post(GetCmdBuildVehMsg(this->vehicle_type), CcBuildPrimaryVehicle, this->window_number, sel_eng, true, cargo, INVALID_CLIENT_ID);
 					}
 
-					/* Update last used variant and refresh if necessary. */
+					/* Update last used variant in hierarchy and refresh if necessary. */
 					bool refresh = false;
-					int recursion = 10; /* In case of infinite loop */
-					for (Engine *e = Engine::Get(sel_eng); recursion > 0; e = Engine::Get(e->info.variant_id), --recursion) {
+					EngineID parent = sel_eng;
+					while (parent != INVALID_ENGINE) {
+						Engine *e = Engine::Get(parent);
 						refresh |= (e->display_last_variant != sel_eng);
 						e->display_last_variant = sel_eng;
-						if (e->info.variant_id == INVALID_ENGINE) break;
+						parent = e->info.variant_id;
 					}
 					if (refresh) {
 						InvalidateWindowData(WC_REPLACE_VEHICLE, this->vehicle_type, 0); // Update the autoreplace window
diff --git a/src/engine.cpp b/src/engine.cpp
index 3aa242e375..50ae4606b3 100644
--- a/src/engine.cpp
+++ b/src/engine.cpp
@@ -491,7 +491,7 @@ bool Engine::IsVariantHidden(CompanyID c) const
 	 * the last display variant rather than the actual parent variant. */
 	const Engine *re = this;
 	const Engine *ve = re->GetDisplayVariant();
-	while (!(ve->IsHidden(c)) && re->info.variant_id != INVALID_ENGINE && re->info.variant_id != re->index) {
+	while (!(ve->IsHidden(c)) && re->info.variant_id != INVALID_ENGINE) {
 		re = Engine::Get(re->info.variant_id);
 		ve = re->GetDisplayVariant();
 	}
@@ -607,7 +607,7 @@ void CalcEngineReliability(Engine *e, bool new_month)
 {
 	/* Get source engine for reliability age. This is normally our engine unless variant reliability syncing is requested. */
 	Engine *re = e;
-	while (re->info.variant_id != INVALID_ENGINE && re->info.variant_id != re->index && (re->info.extra_flags & ExtraEngineFlags::SyncReliability) != ExtraEngineFlags::None) {
+	while (re->info.variant_id != INVALID_ENGINE && (re->info.extra_flags & ExtraEngineFlags::SyncReliability) != ExtraEngineFlags::None) {
 		re = Engine::Get(re->info.variant_id);
 	}
 
@@ -706,7 +706,7 @@ void StartupOneEngine(Engine *e, TimerGameCalendar::Date aging_date, uint32_t se
 
 	/* Get parent variant index for syncing reliability via random seed. */
 	const Engine *re = e;
-	while (re->info.variant_id != INVALID_ENGINE && re->info.variant_id != re->index && (re->info.extra_flags & ExtraEngineFlags::SyncReliability) != ExtraEngineFlags::None) {
+	while (re->info.variant_id != INVALID_ENGINE && (re->info.extra_flags & ExtraEngineFlags::SyncReliability) != ExtraEngineFlags::None) {
 		re = Engine::Get(re->info.variant_id);
 	}
 
diff --git a/src/newgrf.cpp b/src/newgrf.cpp
index a89addfcc4..228832dc2d 100644
--- a/src/newgrf.cpp
+++ b/src/newgrf.cpp
@@ -9125,12 +9125,9 @@ static void FinaliseEngineArray()
 			}
 		}
 
-		/* Do final mapping on variant engine ID and set appropriate flags on variant engine */
+		/* Do final mapping on variant engine ID. */
 		if (e->info.variant_id != INVALID_ENGINE) {
 			e->info.variant_id = GetNewEngineID(e->grf_prop.grffile, e->type, e->info.variant_id);
-			if (e->info.variant_id != INVALID_ENGINE) {
-				Engine::Get(e->info.variant_id)->display_flags |= EngineDisplayFlags::HasVariants | EngineDisplayFlags::IsFolded;
-			}
 		}
 
 		if (!HasBit(e->info.climates, _settings_game.game_creation.landscape)) continue;
@@ -9162,6 +9159,26 @@ static void FinaliseEngineArray()
 			}
 		}
 	}
+
+	/* Check engine variants don't point back on themselves (either directly or via a loop) then set appropriate flags
+	 * on variant engine. This is performed separately as all variant engines need to have been resolved. */
+	for (Engine *e : Engine::Iterate()) {
+		EngineID parent = e->info.variant_id;
+		while (parent != INVALID_ENGINE) {
+			parent = Engine::Get(parent)->info.variant_id;
+			if (parent != e->index) continue;
+
+			/* Engine looped back on itself, so clear the variant. */
+			e->info.variant_id = INVALID_ENGINE;
+
+			GrfMsg(1, "FinaliseEngineArray: Variant of engine {:x} in '{}' loops back on itself", _engine_mngr[e->index].internal_id, e->GetGRF()->filename);
+			break;
+		}
+
+		if (e->info.variant_id != INVALID_ENGINE) {
+			Engine::Get(e->info.variant_id)->display_flags |= EngineDisplayFlags::HasVariants | EngineDisplayFlags::IsFolded;
+		}
+	}
 }
 
 /** Check for invalid cargoes */