diff --git a/src/sql/parts/connection/common/connectionProfileGroup.ts b/src/sql/parts/connection/common/connectionProfileGroup.ts
index 3e9aa1708b..a7266ca1df 100644
--- a/src/sql/parts/connection/common/connectionProfileGroup.ts
+++ b/src/sql/parts/connection/common/connectionProfileGroup.ts
@@ -153,6 +153,19 @@ export class ConnectionProfileGroup implements IConnectionProfileGroup {
 		return this.parent;
 	}
 
+	public isAncestorOf(node: ConnectionProfileGroup | ConnectionProfile): boolean {
+		let isAncestor = false;
+		let currentNode = node;
+		while (currentNode) {
+			if (currentNode.parent && currentNode.parent.id === this.id) {
+				isAncestor = true;
+				break;
+			}
+			currentNode = currentNode.parent;
+		}
+		return isAncestor;
+	}
+
 	public static getGroupFullNameParts(groupFullName: string): string[] {
 		groupFullName = groupFullName ? groupFullName : '';
 		let groupNames: string[] = groupFullName.split(ConnectionProfileGroup.GroupNameSeparator);
diff --git a/src/sql/parts/objectExplorer/viewlet/dragAndDropController.ts b/src/sql/parts/objectExplorer/viewlet/dragAndDropController.ts
index 2676ef17ed..1c1b2ac978 100644
--- a/src/sql/parts/objectExplorer/viewlet/dragAndDropController.ts
+++ b/src/sql/parts/objectExplorer/viewlet/dragAndDropController.ts
@@ -68,12 +68,16 @@ export class ServerTreeDragAndDrop implements IDragAndDrop {
 		let canDragOver: boolean = true;
 		if (targetElement instanceof ConnectionProfile || targetElement instanceof ConnectionProfileGroup) {
 			let targetConnectionProfileGroup = this.getTargetGroup(targetElement);
-			//Verify if the connection can be moved to the target group
+			// Verify if the connection can be moved to the target group
 			const source = data.getData()[0];
 			if (source instanceof ConnectionProfile) {
 				if (!this._connectionManagementService.canChangeConnectionConfig(source, targetConnectionProfileGroup.id)) {
 					canDragOver = false;
 				}
+			} else if (source instanceof ConnectionProfileGroup) {
+				// Dropping a group to itself or its descendants nodes is not allowed
+				// to avoid creating a circular structure.
+				canDragOver = source.id !== targetElement.id && !source.isAncestorOf(targetElement);
 			}
 
 		} else {
@@ -148,7 +152,7 @@ export class ServerTreeDragAndDrop implements IDragAndDrop {
  */
 export class RecentConnectionsDragAndDrop implements IDragAndDrop {
 
-	constructor( @IConnectionManagementService private connectionManagementService: IConnectionManagementService,
+	constructor(@IConnectionManagementService private connectionManagementService: IConnectionManagementService,
 		@IInstantiationService private instantiationService: IInstantiationService
 	) {
 	}