diff -r 262204877004 Lib/test/test_xml_etree.py
--- a/Lib/test/test_xml_etree.py	Mon Apr 14 11:20:45 2014 -0400
+++ b/Lib/test/test_xml_etree.py	Wed Apr 16 16:04:45 2014 -0400
@@ -1185,6 +1185,27 @@
 </document>
 """.format(html.escape(SIMPLE_XMLFILE, True))
 
+XINCLUDE["Recursive1.xml"] = """\
+<?xml version='1.0'?>
+<document xmlns:xi="http://www.w3.org/2001/XInclude">
+  <p>The following is the source of Recursive2.xml:</p>
+  <xi:include href="Recursive2.xml"/>
+</document>
+"""
+
+XINCLUDE["Recursive2.xml"] = """\
+<?xml version='1.0'?>
+<data xmlns:xi="http://www.w3.org/2001/XInclude">
+  <p>The following is the source of Recursive3.xml:</p>
+  <xi:include href="Recursive3.xml"/>
+</data>
+"""
+
+XINCLUDE["Recursive3.xml"] = """\
+<?xml version='1.0'?>
+<p>This is all there is in Recursive3.xml</p>
+"""
+
 #
 # badly formatted xi:include tags
 
@@ -1306,6 +1327,21 @@
             '  </ns0:include>\n'
             '</div>') # C5
 
+
+        # Textual inclusion of recursive element
+        document = self.xinclude_loader("Recursive1.xml")
+        ElementInclude.include(document, self.xinclude_loader)
+        print('\n',serialize(document))
+        self.assertEqual(serialize(document),
+            '<document>\n'
+            '  <p>The following is the source of Recursive2.xml:</p>\n'
+            '  <data>\n'
+            '  <p>The following is the source of Recursive3.xml:</p>\n'
+            '  <p>This is all there is in Recursive3.xml</p>\n'
+            '</data>\n'
+            '</document>')
+
+
     def test_xinclude_failures(self):
         from xml.etree import ElementInclude
 
diff -r 262204877004 Lib/xml/etree/ElementInclude.py
--- a/Lib/xml/etree/ElementInclude.py	Mon Apr 14 11:20:45 2014 -0400
+++ b/Lib/xml/etree/ElementInclude.py	Wed Apr 16 16:04:45 2014 -0400
@@ -114,6 +114,7 @@
                         "cannot load %r as %r" % (href, parse)
                         )
                 node = copy.copy(node)
+                include(node,loader)
                 if e.tail:
                     node.tail = (node.tail or "") + e.tail
                 elem[i] = node