diff --git a/.changeset/young-insects-grab.md b/.changeset/young-insects-grab.md
new file mode 100644
index 0000000000..faa017cb42
--- /dev/null
+++ b/.changeset/young-insects-grab.md
@@ -0,0 +1,6 @@
+---
+"@pnpm/resolve-dependencies": patch
+"pnpm": patch
+---
+
+Fix peer dependency resolution dead lock [#8570](https://github.com/pnpm/pnpm/issues/8570).
diff --git a/pkg-manager/core/test/install/misc.ts b/pkg-manager/core/test/install/misc.ts
index 62b9bc9280..a63d6c0cda 100644
--- a/pkg-manager/core/test/install/misc.ts
+++ b/pkg-manager/core/test/install/misc.ts
@@ -1243,3 +1243,11 @@ test('a package should be able to be a dependency of itself', async () => {
     expect(pkg.version).toBe('1.0.0')
   }
 })
+
+// Covers https://github.com/pnpm/pnpm/issues/8570
+test('install should not hang on circular peer dependencies', async () => {
+  prepareEmpty()
+
+  // cspell:disable-next-line
+  await addDependenciesToPackage({}, ['@medusajs/medusa-js@6.1.7'], testDefaults())
+})
diff --git a/pkg-manager/core/test/install/peerDependencies.ts b/pkg-manager/core/test/install/peerDependencies.ts
index 628360b55a..b6839bff52 100644
--- a/pkg-manager/core/test/install/peerDependencies.ts
+++ b/pkg-manager/core/test/install/peerDependencies.ts
@@ -987,7 +987,7 @@ test('peer dependency is resolved from parent package via its alias', async () =
 
   const lockfile = readYamlFile<Lockfile>(WANTED_LOCKFILE)
   expect(Object.keys(lockfile.snapshots ?? {}).sort()).toStrictEqual([
-    '@pnpm.e2e/has-tango-as-peer-dep@1.0.0(@pnpm.e2e/tango-tango@1.0.0(@pnpm.e2e/tango-tango@1.0.0))',
+    '@pnpm.e2e/has-tango-as-peer-dep@1.0.0(@pnpm.e2e/tango-tango@1.0.0)',
     '@pnpm.e2e/tango-tango@1.0.0(@pnpm.e2e/tango-tango@1.0.0)',
   ].sort())
 })
diff --git a/pkg-manager/resolve-dependencies/src/resolvePeers.ts b/pkg-manager/resolve-dependencies/src/resolvePeers.ts
index 58d1117dcd..0c287fff7c 100644
--- a/pkg-manager/resolve-dependencies/src/resolvePeers.ts
+++ b/pkg-manager/resolve-dependencies/src/resolvePeers.ts
@@ -567,7 +567,9 @@ async function resolvePeersOfNode<T extends PartialResolvedPackage> (
         .map(async (peerNodeId) => {
           if (cyclicPeerNodeIds.has(peerNodeId)) {
             const { name, version } = (ctx.dependenciesTree.get(peerNodeId)!.resolvedPackage as T)
-            return `${name}@${version}`
+            const id = `${name}@${version}`
+            ctx.pathsByNodeIdPromises.get(peerNodeId)?.resolve(id as DepPath)
+            return id
           }
           return ctx.pathsByNodeIdPromises.get(peerNodeId)!.promise
         })