diff --git a/framework/CHANGELOG.md b/framework/CHANGELOG.md
index 0bea5c0a23..b1c46ca214 100644
--- a/framework/CHANGELOG.md
+++ b/framework/CHANGELOG.md
@@ -21,6 +21,7 @@ Yii Framework 2 Change Log
 - Enh #6975: Pressing arrows while focused in inputs of Active Form with `validateOnType` enabled no longer triggers validation (slinstj)
 - Enh #7488: Added `StringHelper::explode` to perform explode with trimming and skipping of empty elements (SilverFire, nineinchnick, creocoder, samdark)
 - Enh #7530: Improved default values for `yii\data\Sort` link labels in a `ListView` when used with an `ActiveDataProvider` (cebe)
+- Enh #7539: `yii\console\controllers\AssetController` provides dependency trace in case bundle circular dependency detected (klimov-paul)
 - Enh #7562: `yii help` now lists all sub-commands by default (callmez)
 - Enh #7571: HTTP status 500 and "An internal server error occurred." are now returned in case there was an exception in layout and `YII_DEBUG` is false (samdark)
 - Enh #7636: `yii\web\Session::getHasSessionId()` uses a more lenient way to check if session ID is provided in URL (robsch)
diff --git a/framework/console/controllers/AssetController.php b/framework/console/controllers/AssetController.php
index fb50c2b402..f63c297e10 100644
--- a/framework/console/controllers/AssetController.php
+++ b/framework/console/controllers/AssetController.php
@@ -248,7 +248,7 @@ class AssetController extends Controller
                 $this->loadDependency($dependencyBundle, $result);
                 $result[$name] = $dependencyBundle;
             } elseif ($result[$name] === false) {
-                throw new Exception("A circular dependency is detected for bundle '$name'.");
+                throw new Exception("A circular dependency is detected for bundle '{$name}': " . $this->composeCircularDependencyTrace($name, $result) . ".");
             }
         }
     }
@@ -423,9 +423,9 @@ class AssetController extends Controller
                 $this->registerBundle($bundles, $depend, $registered);
             }
             unset($registered[$name]);
-            $registered[$name] = true;
+            $registered[$name] = $bundle;
         } elseif ($registered[$name] === false) {
-            throw new Exception("A circular dependency is detected for target '$name'.");
+            throw new Exception("A circular dependency is detected for target '{$name}': " . $this->composeCircularDependencyTrace($name, $registered) . ".");
         }
     }
 
@@ -756,4 +756,26 @@ EOD;
         $config['class'] = get_class($bundle);
         return $config;
     }
+
+    /**
+     * Composes trace info for bundle circular dependency.
+     * @param string $circularDependencyName name of the bundle, which have circular dependency
+     * @param array $registered list of bundles registered while detecting circular dependency.
+     * @return string bundle circular dependency trace string.
+     */
+    private function composeCircularDependencyTrace($circularDependencyName, array $registered)
+    {
+        $dependencyTrace = [];
+        $startFound = false;
+        foreach ($registered as $name => $value) {
+            if ($name === $circularDependencyName) {
+                $startFound = true;
+            }
+            if ($startFound && $value === false) {
+                $dependencyTrace[] = $name;
+            }
+        }
+        $dependencyTrace[] = $circularDependencyName;
+        return implode(' -> ', $dependencyTrace);
+    }
 }
diff --git a/tests/unit/framework/console/controllers/AssetControllerTest.php b/tests/unit/framework/console/controllers/AssetControllerTest.php
index ae031b045e..8ef7532a6f 100644
--- a/tests/unit/framework/console/controllers/AssetControllerTest.php
+++ b/tests/unit/framework/console/controllers/AssetControllerTest.php
@@ -377,6 +377,61 @@ EOL;
         $this->assertContains($externalAssetBundleClassName, $compressedRegularAssetConfig['depends'], 'Dependency on external bundle is lost!');
     }
 
+    /**
+     * @depends testActionCompress
+     *
+     * @see https://github.com/yiisoft/yii2/issues/7539
+     */
+    public function testDetectCircularDependency()
+    {
+        // Given :
+        $namespace = __NAMESPACE__;
+
+        $this->declareAssetBundleClass([
+            'namespace' => $namespace,
+            'class' => 'AssetStart',
+            'depends' => [
+                $namespace . '\AssetA'
+            ],
+        ]);
+        $this->declareAssetBundleClass([
+            'namespace' => $namespace,
+            'class' => 'AssetA',
+            'depends' => [
+                $namespace . '\AssetB'
+            ],
+        ]);
+        $this->declareAssetBundleClass([
+            'namespace' => $namespace,
+            'class' => 'AssetB',
+            'depends' => [
+                $namespace . '\AssetC'
+            ],
+        ]);
+        $this->declareAssetBundleClass([
+            'namespace' => $namespace,
+            'class' => 'AssetC',
+            'depends' => [
+                $namespace . '\AssetA'
+            ],
+        ]);
+
+        $bundles = [
+            $namespace . '\AssetStart'
+        ];
+        $bundleFile = $this->testFilePath . DIRECTORY_SEPARATOR . 'bundle.php';
+
+        $configFile = $this->testFilePath . DIRECTORY_SEPARATOR . 'config.php';
+        $this->createCompressConfigFile($configFile, $bundles);
+
+        // Assert :
+        $expectedExceptionMessage = ": {$namespace}\AssetA -> {$namespace}\AssetB -> {$namespace}\AssetC -> {$namespace}\AssetA";
+        $this->setExpectedException('yii\console\Exception', $expectedExceptionMessage);
+
+        // When :
+        $this->runAssetControllerAction('compress', [$configFile, $bundleFile]);
+    }
+
     /**
      * Data provider for [[testAdjustCssUrl()]].
      * @return array test data.