diff --git a/packages/eslint-plugin/tests/rules/prefer-readonly-parameter-types.test.ts b/packages/eslint-plugin/tests/rules/prefer-readonly-parameter-types.test.ts
index b6b499b0efd..7cd0527b2cf 100644
--- a/packages/eslint-plugin/tests/rules/prefer-readonly-parameter-types.test.ts
+++ b/packages/eslint-plugin/tests/rules/prefer-readonly-parameter-types.test.ts
@@ -380,6 +380,27 @@ ruleTester.run('prefer-readonly-parameter-types', rule, {
         },
       ],
     },
+    {
+      name: 'circular readonly types (Bug: #5875)',
+      code: `
+        interface Obj1 {
+          readonly [K: string]: Obj2;
+        }
+        
+        interface Obj2 {
+          readonly [K: string]: Obj1;
+        }
+        
+        function foo(event: Obj1): void {}
+      `,
+      options: [
+        {
+          checkParameterProperties: true,
+          ignoreInferredTypes: false,
+          ...readonlynessOptionsDefaults,
+        },
+      ],
+    },
   ],
   invalid: [
     // arrays
diff --git a/packages/type-utils/src/isTypeReadonly.ts b/packages/type-utils/src/isTypeReadonly.ts
index cac7690ea3a..7ba2b300089 100644
--- a/packages/type-utils/src/isTypeReadonly.ts
+++ b/packages/type-utils/src/isTypeReadonly.ts
@@ -113,7 +113,7 @@ function isTypeReadonlyObject(
         return Readonlyness.Mutable;
       }
 
-      if (indexInfo.type === type) {
+      if (indexInfo.type === type || seenTypes.has(indexInfo.type)) {
         return Readonlyness.Readonly;
       }
 
diff --git a/packages/type-utils/tests/isTypeReadonly.test.ts b/packages/type-utils/tests/isTypeReadonly.test.ts
index 77d9f65b2f9..382091a2375 100644
--- a/packages/type-utils/tests/isTypeReadonly.test.ts
+++ b/packages/type-utils/tests/isTypeReadonly.test.ts
@@ -139,6 +139,11 @@ describe('isTypeReadonly', () => {
 
           it('handles circular readonly PropertySignature inside a readonly IndexSignature', () =>
             runTests('interface Test { readonly [key: string]: Test };'));
+
+          it('handles circular readonly PropertySignature inside interdependent objects', () =>
+            runTests(
+              'interface Test1 { readonly [key: string]: Test } interface Test { readonly [key: string]: Test1 }',
+            ));
         });
 
         describe('is not readonly', () => {
@@ -156,8 +161,23 @@ describe('isTypeReadonly', () => {
         describe('is not readonly circular', () => {
           const runTests = runTestIsNotReadonly;
 
-          it('handles circular mutable PropertySignature inside a readonly IndexSignature', () =>
+          it('handles circular mutable PropertySignature', () =>
             runTests('interface Test { [key: string]: Test };'));
+
+          it.each([
+            [
+              'interface Test1 { [key: string]: Test } interface Test { readonly [key: string]: Test1 }',
+            ],
+            [
+              'interface Test1 { readonly [key: string]: Test } interface Test { [key: string]: Test1 }',
+            ],
+            [
+              'interface Test1 { [key: string]: Test } interface Test { [key: string]: Test1 }',
+            ],
+          ])(
+            'handles circular mutable PropertySignature inside interdependent objects',
+            runTests,
+          );
         });
       });