diff --git a/compiler/rustc_middle/src/query/mod.rs b/compiler/rustc_middle/src/query/mod.rs
index 895c8c0295a04..e6ddd66f56dfa 100644
--- a/compiler/rustc_middle/src/query/mod.rs
+++ b/compiler/rustc_middle/src/query/mod.rs
@@ -1294,7 +1294,7 @@ rustc_queries! {
     }
 
     /// Return the set of (transitive) callees that may result in a recursive call to `key`.
-    query mir_callgraph_cyclic(key: LocalDefId) -> &'tcx UnordSet<LocalDefId> {
+    query mir_callgraph_cyclic(key: LocalDefId) -> &'tcx Option<UnordSet<LocalDefId>> {
         fatal_cycle
         arena_cache
         desc { |tcx|
diff --git a/compiler/rustc_mir_transform/src/inline.rs b/compiler/rustc_mir_transform/src/inline.rs
index 8593e25d6aa5e..734c92ac22634 100644
--- a/compiler/rustc_mir_transform/src/inline.rs
+++ b/compiler/rustc_mir_transform/src/inline.rs
@@ -777,8 +777,11 @@ fn check_mir_is_available<'tcx, I: Inliner<'tcx>>(
     {
         // If we know for sure that the function we're calling will itself try to
         // call us, then we avoid inlining that function.
-        if inliner.tcx().mir_callgraph_cyclic(caller_def_id.expect_local()).contains(&callee_def_id)
-        {
+        let Some(cyclic_callees) = inliner.tcx().mir_callgraph_cyclic(caller_def_id.expect_local())
+        else {
+            return Err("call graph cycle detection bailed due to recursion limit");
+        };
+        if cyclic_callees.contains(&callee_def_id) {
             debug!("query cycle avoidance");
             return Err("caller might be reachable from callee");
         }
diff --git a/compiler/rustc_mir_transform/src/inline/cycle.rs b/compiler/rustc_mir_transform/src/inline/cycle.rs
index 25a9baffe582d..9d031b6548021 100644
--- a/compiler/rustc_mir_transform/src/inline/cycle.rs
+++ b/compiler/rustc_mir_transform/src/inline/cycle.rs
@@ -68,7 +68,7 @@ fn process<'tcx>(
     involved: &mut FxHashSet<LocalDefId>,
     recursion_limiter: &mut FxHashMap<DefId, usize>,
     recursion_limit: Limit,
-) -> bool {
+) -> Option<bool> {
     trace!(%caller);
     let mut reaches_root = false;
 
@@ -127,10 +127,9 @@ fn process<'tcx>(
                         recursion_limiter,
                         recursion_limit,
                     )
-                })
+                })?
             } else {
-                // Pessimistically assume that there could be recursion.
-                true
+                return None;
             };
             seen.insert(callee, callee_reaches_root);
             callee_reaches_root
@@ -144,14 +143,14 @@ fn process<'tcx>(
         }
     }
 
-    reaches_root
+    Some(reaches_root)
 }
 
 #[instrument(level = "debug", skip(tcx), ret)]
 pub(crate) fn mir_callgraph_cyclic<'tcx>(
     tcx: TyCtxt<'tcx>,
     root: LocalDefId,
-) -> UnordSet<LocalDefId> {
+) -> Option<UnordSet<LocalDefId>> {
     assert!(
         !tcx.is_constructor(root.to_def_id()),
         "you should not call `mir_callgraph_reachable` on enum/struct constructor functions"
@@ -164,16 +163,16 @@ pub(crate) fn mir_callgraph_cyclic<'tcx>(
     // limit, we will hit the limit first and give up on looking for inlining. And in any case,
     // the default recursion limits are quite generous for us. If we need to recurse 64 times
     // into the call graph, we're probably not going to find any useful MIR inlining.
-    let recursion_limit = tcx.recursion_limit() / 2;
+    let recursion_limit = tcx.recursion_limit() / 8;
     let mut involved = FxHashSet::default();
     let typing_env = ty::TypingEnv::post_analysis(tcx, root);
     let root_instance =
         ty::Instance::new_raw(root.to_def_id(), ty::GenericArgs::identity_for_item(tcx, root));
     if !should_recurse(tcx, root_instance) {
         trace!("cannot walk, skipping");
-        return involved.into();
+        return Some(involved.into());
     }
-    process(
+    match process(
         tcx,
         typing_env,
         root_instance,
@@ -182,8 +181,10 @@ pub(crate) fn mir_callgraph_cyclic<'tcx>(
         &mut involved,
         &mut FxHashMap::default(),
         recursion_limit,
-    );
-    involved.into()
+    ) {
+        Some(_) => Some(involved.into()),
+        _ => None,
+    }
 }
 
 pub(crate) fn mir_inliner_callees<'tcx>(
diff --git a/tests/crashes/131342.rs b/tests/crashes/131342.rs
index f4404092917a4..17194fa38ff17 100644
--- a/tests/crashes/131342.rs
+++ b/tests/crashes/131342.rs
@@ -1,4 +1,5 @@
 //@ known-bug: #131342
+//@ compile-flags: -Copt-level=0
 
 fn main() {
     let mut items = vec![1, 2, 3, 4, 5].into_iter();