diff --git a/lib/natalie/compiler/args.rb b/lib/natalie/compiler/args.rb
index aee4fe002..108b1252a 100644
--- a/lib/natalie/compiler/args.rb
+++ b/lib/natalie/compiler/args.rb
@@ -168,7 +168,7 @@ def transform_optional_arg(arg)
         default_value = arg.value
 
         if default_value&.type == :local_variable_read_node && default_value.name == name
-          raise SyntaxError, "circular argument reference - #{name}"
+          default_value = Prism.nil_node(location: default_value.location)
         end
 
         @instructions << ArrayIsEmptyInstruction.new
diff --git a/spec/language/block_spec.rb b/spec/language/block_spec.rb
index 6248a8933..9585acb94 100644
--- a/spec/language/block_spec.rb
+++ b/spec/language/block_spec.rb
@@ -979,27 +979,39 @@ def obj.to_ary; raise "Exception raised in #to_ary" end
       end.call(2, 3).should == [2, 6, [], 3]
     end
 
-    # NATFIXME: circular argument reference - a
     describe "with a circular argument reference" do
-      xit "raises a SyntaxError if using an existing local with the same name as the argument" do
-        #a = 1
-        #-> {
-          #@proc = eval "proc { |a=a| a }"
-        #}.should raise_error(SyntaxError)
-      end
+      ruby_version_is ""..."3.4" do
+        it "raises a SyntaxError if using the argument in its default value" do
+          NATFIXME 'We implement the Ruby 3.4 behaviour' do
+            a = 1
+            -> {
+              eval "proc { |a=a| a }"
+            }.should raise_error(SyntaxError)
+          end
+
+          NATFIXME "Restore this part of the spec once we've moved to Ruby 3.4 compatibility" do
+            RUBY_VERSION.should.start_with?('3.4.')
+          end
 
-      xit "raises a SyntaxError if there is an existing method with the same name as the argument" do
-        #def a; 1; end
-        #-> {
-          #@proc = eval "proc { |a=a| a }"
-        #}.should raise_error(SyntaxError)
+          -> {
+            eval "proc { |a=a| a }.call"
+          }.call.should == nil
+        end
       end
 
-      it "calls an existing method with the same name as the argument if explicitly using ()" do
-        def a; 1; end
-        proc { |a=a()| a }.call.should == 1
+      ruby_version_is "3.4" do
+        it "is nil if using the argument in its default value" do
+          -> {
+            eval "proc { |a=a| a }.call"
+          }.call.should == nil
+        end
       end
     end
+
+    it "calls an existing method with the same name as the argument if explicitly using ()" do
+      def a; 1; end
+      proc { |a=a()| a }.call.should == 1
+    end
   end
 
   describe "with pattern matching" do
diff --git a/test/natalie/method_test.rb b/test/natalie/method_test.rb
index d90b78e8c..a18a3717a 100644
--- a/test/natalie/method_test.rb
+++ b/test/natalie/method_test.rb
@@ -201,8 +201,8 @@ def yield_to_block(&b)
     default_nils.should == [nil, nil]
     default_nils(1).should == [1, nil]
     default_nils(1, 2).should == [1, 2]
-    out = `bin/natalie -e "def circular_argument_reference(a = a); a; end" 2>&1`
-    out.should =~ /parameter default value references itself|circular argument reference - a/
+    out = `bin/natalie -e "def circular_argument_reference(a = a); p a; end; circular_argument_reference" 2>&1`
+    out.should =~ /^nil$/
   end
 
   def default_first1(x = 1)