diff --git a/pkg/engine/engine.go b/pkg/engine/engine.go
index b4b6475c9..6063fdff0 100644
--- a/pkg/engine/engine.go
+++ b/pkg/engine/engine.go
@@ -26,6 +26,7 @@ import (
 	"text/template"
 
 	"github.com/Masterminds/sprig"
+	"github.com/pkg/errors"
 
 	"k8s.io/helm/pkg/chartutil"
 	"k8s.io/helm/pkg/proto/hapi/chart"
@@ -144,12 +145,21 @@ func (e *Engine) alterFuncMap(t *template.Template, referenceTpls map[string]ren
 		funcMap[k] = v
 	}
 
+	includedNames := make([]string, 0)
+
 	// Add the 'include' function here so we can close over t.
 	funcMap["include"] = func(name string, data interface{}) (string, error) {
 		buf := bytes.NewBuffer(nil)
+		for _, n := range includedNames {
+			if n == name {
+				return "", errors.Wrapf(fmt.Errorf("unable to excute template"), "rendering template has a nested reference name: %s", name)
+			}
+		}
+		includedNames = append(includedNames, name)
 		if err := t.ExecuteTemplate(buf, name, data); err != nil {
 			return "", err
 		}
+		includedNames = includedNames[:len(includedNames)-1]
 		return buf.String(), nil
 	}
 
diff --git a/pkg/engine/engine_test.go b/pkg/engine/engine_test.go
index 712b3b3df..c130540aa 100644
--- a/pkg/engine/engine_test.go
+++ b/pkg/engine/engine_test.go
@@ -423,6 +423,15 @@ func TestAlterFuncMap(t *testing.T) {
 		Dependencies: []*chart.Chart{},
 	}
 
+	// Check nested reference in include FuncMap
+	d := &chart.Chart{
+		Metadata: &chart.Metadata{Name: "nested"},
+		Templates: []*chart.Template{
+			{Name: "templates/quote", Data: []byte(`{{include "nested/templates/quote" . | indent 2}} dead.`)},
+			{Name: "templates/_partial", Data: []byte(`{{.Release.Name}} - he`)},
+		},
+	}
+
 	v := chartutil.Values{
 		"Values": &chart.Config{Raw: ""},
 		"Chart":  c.Metadata,
@@ -441,6 +450,12 @@ func TestAlterFuncMap(t *testing.T) {
 		t.Errorf("Expected %q, got %q (%v)", expect, got, out)
 	}
 
+	_, err = New().Render(d, v)
+	expectErrName := "nested/templates/quote"
+	if err == nil {
+		t.Errorf("Expected err of nested reference name: %v", expectErrName)
+	}
+
 	reqChart := &chart.Chart{
 		Metadata: &chart.Metadata{Name: "conan"},
 		Templates: []*chart.Template{