diff --git a/awx/main/models/inventory.py b/awx/main/models/inventory.py
index dc43cf8b31..392c011a16 100644
--- a/awx/main/models/inventory.py
+++ b/awx/main/models/inventory.py
@@ -222,6 +222,9 @@ class Inventory(CommonModel):
 
         def update_group_depths(group_pk, current_depth=0):
             max_depth = group_depths.get(group_pk, -1)
+            # Arbitrarily limit depth to avoid hitting Python recursion limit (which defaults to 1000).
+            if current_depth > 100:
+                return
             if current_depth > max_depth:
                 group_depths[group_pk] = current_depth
             for child_pk in group_children_map.get(group_pk, set()):
diff --git a/awx/main/tests/commands/commands_monolithic.py b/awx/main/tests/commands/commands_monolithic.py
index 7e591d65d2..f6055d27cf 100644
--- a/awx/main/tests/commands/commands_monolithic.py
+++ b/awx/main/tests/commands/commands_monolithic.py
@@ -96,6 +96,19 @@ lb[01:09:2].example.us even_odd=odd
 media[0:9][0:9].example.cc
 '''
 
+TEST_INVENTORY_INI_WITH_RECURSIVE_GROUPS = '''\
+[family:children]
+parent
+
+[parent:children]
+child
+
+[child:children]
+grandchild
+
+[grandchild:children]
+parent
+'''
 
 class BaseCommandMixin(object):
     '''
@@ -971,6 +984,16 @@ class InventoryImportTest(BaseCommandMixin, BaseLiveServerTest):
                                                   source=self.ini_path)
         self.assertTrue(isinstance(result, ValueError), result)
 
+    def test_ini_file_with_recursive_groups(self):
+        self.create_test_ini(ini_content=TEST_INVENTORY_INI_WITH_RECURSIVE_GROUPS)
+        new_inv = self.organizations[0].inventories.create(name='new')
+        self.assertEqual(new_inv.hosts.count(), 0)
+        self.assertEqual(new_inv.groups.count(), 0)
+        result, stdout, stderr = self.run_command('inventory_import',
+                                                  inventory_id=new_inv.pk,
+                                                  source=self.ini_path)
+        self.assertEqual(result, None, stdout + stderr)
+
     def test_executable_file(self):
         # Use existing inventory as source.
         old_inv = self.inventories[1]
diff --git a/awx/plugins/inventory/ec2.py b/awx/plugins/inventory/ec2.py
index 112f5c29e8..53c699227d 100755
--- a/awx/plugins/inventory/ec2.py
+++ b/awx/plugins/inventory/ec2.py
@@ -527,7 +527,8 @@ class Ec2Inventory(object):
                 self.push(self.inventory, key, dest)
                 if self.nested_groups:
                     self.push_group(self.inventory, 'tags', self.to_safe("tag_" + k))
-                    self.push_group(self.inventory, self.to_safe("tag_" + k), key)
+                    if v:
+                        self.push_group(self.inventory, self.to_safe("tag_" + k), key)
 
         # Inventory: Group by Route53 domain names if enabled
         if self.route53_enabled and self.group_by_route53_names: