diff --git a/Lib/distutils/sysconfig.py b/Lib/distutils/sysconfig.py
--- a/Lib/distutils/sysconfig.py
+++ b/Lib/distutils/sysconfig.py
@@ -281,6 +281,8 @@ def parse_makefile(fn, g=None):
 
     # do variable interpolation here
     while notdone:
+        last_notdone = notdone.copy()
+
         for name in notdone.keys():
             value = notdone[name]
             m = _findvar1_rx.search(value) or _findvar2_rx.search(value)
@@ -312,6 +314,11 @@ def parse_makefile(fn, g=None):
             else:
                 # bogus variable reference; just drop it since we can't deal
                 del notdone[name]
+
+        # if we did not change a thing in notdone, we won't do it in the next round
+        if last_notdone==notdone:
+            print "sysconfig.py: warning: could not resolve names from makefile (recursive definition?):", notdone
+            break
 
     fp.close()