diff --git a/src/Compilation.zig b/src/Compilation.zig
index 069cc8a2c7..6cc8502461 100644
--- a/src/Compilation.zig
+++ b/src/Compilation.zig
@@ -2858,51 +2858,52 @@ pub fn addModuleErrorMsg(mod: *Module, eb: *ErrorBundle.Wip, module_err_msg: Mod
     var ref_traces: std.ArrayListUnmanaged(ErrorBundle.ReferenceTrace) = .{};
     defer ref_traces.deinit(gpa);
 
-    for (module_err_msg.reference_trace) |module_reference| {
-        if (module_reference.hidden != 0) {
-            try ref_traces.append(gpa, .{
-                .decl_name = module_reference.hidden,
-                .src_loc = .none,
-            });
-            break;
-        } else if (module_reference.decl == .none) {
-            try ref_traces.append(gpa, .{
-                .decl_name = 0,
-                .src_loc = .none,
-            });
-            break;
+    const remaining_references: ?u32 = remaining: {
+        if (mod.comp.reference_trace) |_| {
+            if (module_err_msg.hidden_references > 0) break :remaining module_err_msg.hidden_references;
+        } else {
+            if (module_err_msg.reference_trace.len > 0) break :remaining 0;
         }
+        break :remaining null;
+    };
+    try ref_traces.ensureTotalCapacityPrecise(gpa, module_err_msg.reference_trace.len +
+        @intFromBool(remaining_references != null));
+
+    for (module_err_msg.reference_trace) |module_reference| {
         const source = try module_reference.src_loc.file_scope.getSource(gpa);
         const span = try module_reference.src_loc.span(gpa);
         const loc = std.zig.findLineColumn(source.bytes, span.main);
         const rt_file_path = try module_reference.src_loc.file_scope.fullPath(gpa);
         defer gpa.free(rt_file_path);
-        try ref_traces.append(gpa, .{
-            .decl_name = try eb.addString(ip.stringToSliceUnwrap(module_reference.decl).?),
+        ref_traces.appendAssumeCapacity(.{
+            .decl_name = try eb.addString(ip.stringToSlice(module_reference.decl)),
             .src_loc = try eb.addSourceLocation(.{
                 .src_path = try eb.addString(rt_file_path),
                 .span_start = span.start,
                 .span_main = span.main,
                 .span_end = span.end,
-                .line = @as(u32, @intCast(loc.line)),
-                .column = @as(u32, @intCast(loc.column)),
+                .line = @intCast(loc.line),
+                .column = @intCast(loc.column),
                 .source_line = 0,
             }),
         });
     }
+    if (remaining_references) |remaining| ref_traces.appendAssumeCapacity(
+        .{ .decl_name = remaining, .src_loc = .none },
+    );
 
     const src_loc = try eb.addSourceLocation(.{
         .src_path = try eb.addString(file_path),
         .span_start = err_span.start,
         .span_main = err_span.main,
         .span_end = err_span.end,
-        .line = @as(u32, @intCast(err_loc.line)),
-        .column = @as(u32, @intCast(err_loc.column)),
+        .line = @intCast(err_loc.line),
+        .column = @intCast(err_loc.column),
         .source_line = if (module_err_msg.src_loc.lazy == .entire_file)
             0
         else
             try eb.addString(err_loc.source_line),
-        .reference_trace_len = @as(u32, @intCast(ref_traces.items.len)),
+        .reference_trace_len = @intCast(ref_traces.items.len),
     });
 
     for (ref_traces.items) |rt| {
@@ -2928,8 +2929,8 @@ pub fn addModuleErrorMsg(mod: *Module, eb: *ErrorBundle.Wip, module_err_msg: Mod
                 .span_start = span.start,
                 .span_main = span.main,
                 .span_end = span.end,
-                .line = @as(u32, @intCast(loc.line)),
-                .column = @as(u32, @intCast(loc.column)),
+                .line = @intCast(loc.line),
+                .column = @intCast(loc.column),
                 .source_line = if (err_loc.eql(loc)) 0 else try eb.addString(loc.source_line),
             }),
         }, .{ .eb = eb });
@@ -2938,7 +2939,7 @@ pub fn addModuleErrorMsg(mod: *Module, eb: *ErrorBundle.Wip, module_err_msg: Mod
         }
     }
 
-    const notes_len = @as(u32, @intCast(notes.entries.len));
+    const notes_len: u32 = @intCast(notes.entries.len);
 
     try eb.addRootErrorMessage(.{
         .msg = try eb.addString(module_err_msg.msg),
diff --git a/src/Module.zig b/src/Module.zig
index d1b1e9b357..ba76c16faf 100644
--- a/src/Module.zig
+++ b/src/Module.zig
@@ -1519,11 +1519,11 @@ pub const ErrorMsg = struct {
     msg: []const u8,
     notes: []ErrorMsg = &.{},
     reference_trace: []Trace = &.{},
+    hidden_references: u32 = 0,
 
     pub const Trace = struct {
-        decl: InternPool.OptionalNullTerminatedString,
+        decl: InternPool.NullTerminatedString,
         src_loc: SrcLoc,
-        hidden: u32 = 0,
     };
 
     pub fn create(
diff --git a/src/Sema.zig b/src/Sema.zig
index dc60238423..b843081a6a 100644
--- a/src/Sema.zig
+++ b/src/Sema.zig
@@ -2396,80 +2396,69 @@ fn failWithOwnedErrorMsg(sema: *Sema, block: ?*Block, err_msg: *Module.ErrorMsg)
     const gpa = sema.gpa;
     const mod = sema.mod;
 
-    if (crash_report.is_enabled and mod.comp.debug_compile_errors) {
-        if (err_msg.src_loc.lazy == .unneeded) return error.NeededSourceLocation;
-        var wip_errors: std.zig.ErrorBundle.Wip = undefined;
-        wip_errors.init(gpa) catch unreachable;
-        Compilation.addModuleErrorMsg(mod, &wip_errors, err_msg.*) catch unreachable;
-        std.debug.print("compile error during Sema:\n", .{});
-        var error_bundle = wip_errors.toOwnedBundle("") catch unreachable;
-        error_bundle.renderToStdErr(.{ .ttyconf = .no_color });
-        crash_report.compilerPanic("unexpected compile error occurred", null, null);
-    }
-
     ref: {
         errdefer err_msg.destroy(gpa);
-        if (err_msg.src_loc.lazy == .unneeded) {
-            return error.NeededSourceLocation;
+        if (err_msg.src_loc.lazy == .unneeded) return error.NeededSourceLocation;
+
+        if (crash_report.is_enabled and mod.comp.debug_compile_errors) {
+            var wip_errors: std.zig.ErrorBundle.Wip = undefined;
+            wip_errors.init(gpa) catch unreachable;
+            Compilation.addModuleErrorMsg(mod, &wip_errors, err_msg.*) catch unreachable;
+            std.debug.print("compile error during Sema:\n", .{});
+            var error_bundle = wip_errors.toOwnedBundle("") catch unreachable;
+            error_bundle.renderToStdErr(.{ .ttyconf = .no_color });
+            crash_report.compilerPanic("unexpected compile error occurred", null, null);
         }
+
         try mod.failed_decls.ensureUnusedCapacity(gpa, 1);
         try mod.failed_files.ensureUnusedCapacity(gpa, 1);
 
-        var func_index: InternPool.Index = .none;
         if (block) |start_block| {
             var block_it = start_block;
             while (block_it.inlining) |inlining| {
-                func_index = inlining.func;
+                try sema.errNote(
+                    inlining.call_block,
+                    inlining.call_src,
+                    err_msg,
+                    "called from here",
+                    .{},
+                );
                 block_it = inlining.call_block;
-                try sema.errNote(block_it, inlining.call_src, err_msg, "called from here", .{});
             }
-        }
 
-        const max_references = blk: {
-            if (mod.comp.reference_trace) |num| break :blk num;
-            // Do not add multiple traces without explicit request.
-            if (mod.failed_decls.count() != 0) break :ref;
-            break :blk default_reference_trace_len;
-        };
+            const max_references = refs: {
+                if (mod.comp.reference_trace) |num| break :refs num;
+                // Do not add multiple traces without explicit request.
+                if (mod.failed_decls.count() > 0) break :ref;
+                break :refs default_reference_trace_len;
+            };
 
-        var referenced_by = if (sema.owner_func_index != .none)
-            mod.funcOwnerDeclIndex(sema.owner_func_index)
-        else
-            sema.owner_decl_index;
-        var reference_stack = std.ArrayList(Module.ErrorMsg.Trace).init(gpa);
-        defer reference_stack.deinit();
+            var referenced_by = if (sema.owner_func_index != .none)
+                mod.funcOwnerDeclIndex(sema.owner_func_index)
+            else
+                sema.owner_decl_index;
+            var reference_stack = std.ArrayList(Module.ErrorMsg.Trace).init(gpa);
+            defer reference_stack.deinit();
 
-        // Avoid infinite loops.
-        var seen = std.AutoHashMap(Decl.Index, void).init(gpa);
-        defer seen.deinit();
+            // Avoid infinite loops.
+            var seen = std.AutoHashMap(Decl.Index, void).init(gpa);
+            defer seen.deinit();
 
-        var cur_reference_trace: u32 = 0;
-        while (sema.mod.reference_table.get(referenced_by)) |ref| : (cur_reference_trace += 1) {
-            const gop = try seen.getOrPut(ref.referencer);
-            if (gop.found_existing) break;
-            if (cur_reference_trace < max_references) {
-                const decl = sema.mod.declPtr(ref.referencer);
-                try reference_stack.append(.{
-                    .decl = decl.name.toOptional(),
-                    .src_loc = ref.src.toSrcLoc(decl, mod),
-                });
+            while (mod.reference_table.get(referenced_by)) |ref| {
+                const gop = try seen.getOrPut(ref.referencer);
+                if (gop.found_existing) break;
+                if (reference_stack.items.len < max_references) {
+                    const decl = mod.declPtr(ref.referencer);
+                    try reference_stack.append(.{
+                        .decl = decl.name,
+                        .src_loc = ref.src.toSrcLoc(decl, mod),
+                    });
+                }
+                referenced_by = ref.referencer;
             }
-            referenced_by = ref.referencer;
+            err_msg.reference_trace = try reference_stack.toOwnedSlice();
+            err_msg.hidden_references = @intCast(seen.count() -| max_references);
         }
-        if (sema.mod.comp.reference_trace == null and cur_reference_trace > 0) {
-            try reference_stack.append(.{
-                .decl = .none,
-                .src_loc = undefined,
-                .hidden = 0,
-            });
-        } else if (cur_reference_trace > max_references) {
-            try reference_stack.append(.{
-                .decl = undefined,
-                .src_loc = undefined,
-                .hidden = cur_reference_trace - max_references,
-            });
-        }
-        err_msg.reference_trace = try reference_stack.toOwnedSlice();
     }
     const ip = &mod.intern_pool;
     if (sema.owner_func_index != .none) {
@@ -7399,7 +7388,8 @@ fn analyzeCall(
             var block_it = block;
             while (block_it.inlining) |parent_inlining| {
                 if (!parent_inlining.has_comptime_args and parent_inlining.func == module_fn_index) {
-                    return sema.fail(block, call_src, "inline call is recursive", .{});
+                    const err_msg = try sema.errMsg(block, call_src, "inline call is recursive", .{});
+                    return sema.failWithOwnedErrorMsg(null, err_msg);
                 }
                 block_it = parent_inlining.call_block;
             }
diff --git a/test/cases/compile_errors/recursive_inline_fn.zig b/test/cases/compile_errors/recursive_inline_fn.zig
index 2308bbdbc7..67184271eb 100644
--- a/test/cases/compile_errors/recursive_inline_fn.zig
+++ b/test/cases/compile_errors/recursive_inline_fn.zig
@@ -11,8 +11,25 @@ pub export fn entry() void {
     _ = foo(x) == 20;
 }
 
+inline fn first() void {
+    second();
+}
+
+inline fn second() void {
+    third();
+}
+
+inline fn third() void {
+    first();
+}
+
+pub export fn entry2() void {
+    first();
+}
+
 // error
 // backend=stage2
 // target=native
 //
 // :5:27: error: inline call is recursive
+// :23:10: error: inline call is recursive