diff --git a/CHANGELOG.md b/CHANGELOG.md
index 6f859325..e7ba66d9 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,7 @@
 - fix in Pull API for reverse non-component attributes (#91, thx [Matt Senior](https://github.com/mattsenior))
 - Node.js and Browser repls for dev profile (#93)
 - Preconditions to validate db/conn arguments (#101)
+- Id allocation bug (#66)
 
 # 0.11.5
 
diff --git a/src/datascript/core.cljc b/src/datascript/core.cljc
index e4cc2c33..aaceea4f 100644
--- a/src/datascript/core.cljc
+++ b/src/datascript/core.cljc
@@ -908,8 +908,10 @@
               new-eid      (or (:db/id upserted) (next-eid db))
               new-entity   (assoc upserted :db/id new-eid)
               new-report   (cond
-                             (nil? old-eid) (allocate-eid report new-eid)
-                             (shim/neg-number? old-eid) (allocate-eid report old-eid new-eid)
+                             (nil? old-eid)                  (allocate-eid report new-eid)
+                             (shim/neg-number? old-eid)      (allocate-eid report old-eid new-eid)
+                             (and (number? old-eid)
+                                  (> old-eid (:max-eid db))) (allocate-eid report old-eid)
                              :else report)]
           (recur new-report (concat (explode db new-entity) entities)))
 
diff --git a/test/datascript/test/explode.cljc b/test/datascript/test/explode.cljc
index fb88da7e..7558fe03 100644
--- a/test/datascript/test/explode.cljc
+++ b/test/datascript/test/explode.cljc
@@ -100,3 +100,37 @@
         [ {:email "@2" :_profile [{:name "Ivan"} {:name "Petr"} ]} ]
         #{ [1 :email "@2"] [2 :name "Ivan"] [2 :profile 1] [3 :name "Petr"] [3 :profile 1] }
       ))))
+
+(deftest test-circular-refs
+  (let [schema {:comp {:db/valueType   :db.type/ref
+                       :db/cardinality :db.cardinality/many
+                       :db/isComponent true}}
+        db     (d/db-with (d/empty-db schema)
+                 [{:db/id 1, :comp [{:name "C"}]}])]
+    (is (= (mapv (juxt :e :a :v) (d/datoms db :eavt))
+           [ [ 1 :comp 2  ]
+             [ 2 :name "C"] ])))
+  
+  (let [schema {:comp {:db/valueType   :db.type/ref
+                       :db/cardinality :db.cardinality/many}}
+        db     (d/db-with (d/empty-db schema)
+                 [{:db/id 1, :comp [{:name "C"}]}])]
+    (is (= (mapv (juxt :e :a :v) (d/datoms db :eavt))
+           [ [ 1 :comp 2  ]
+             [ 2 :name "C"] ])))
+  
+  (let [schema {:comp {:db/valueType   :db.type/ref
+                       :db/isComponent true}}
+        db     (d/db-with (d/empty-db schema)
+                 [{:db/id 1, :comp {:name "C"}}])]
+    (is (= (mapv (juxt :e :a :v) (d/datoms db :eavt))
+           [ [ 1 :comp 2  ]
+             [ 2 :name "C"] ])))
+  
+  (let [schema {:comp {:db/valueType   :db.type/ref}}
+        db     (d/db-with (d/empty-db schema)
+                 [{:db/id 1, :comp {:name "C"}}])]
+    (is (= (mapv (juxt :e :a :v) (d/datoms db :eavt))
+           [ [ 1 :comp 2  ]
+             [ 2 :name "C"] ]))))
+