diff --git a/django/template/loader_tags.py b/django/template/loader_tags.py
index d7908acf7f..fafd9204a6 100644
--- a/django/template/loader_tags.py
+++ b/django/template/loader_tags.py
@@ -121,55 +121,34 @@ class ExtendsNode(Node):
         # the same.
         return compiled_parent._render(context)
 
-class BaseIncludeNode(Node):
-    def __init__(self, *args, **kwargs):
+class IncludeNode(Node):
+    def __init__(self, template, *args, **kwargs):
+        self.template = template
         self.extra_context = kwargs.pop('extra_context', {})
         self.isolated_context = kwargs.pop('isolated_context', False)
-        super(BaseIncludeNode, self).__init__(*args, **kwargs)
-
-    def render_template(self, template, context):
-        values = dict([(name, var.resolve(context)) for name, var
-                       in six.iteritems(self.extra_context)])
-        if self.isolated_context:
-            return template.render(context.new(values))
-        with context.push(**values):
-            return template.render(context)
-
-
-class ConstantIncludeNode(BaseIncludeNode):
-    def __init__(self, template_path, *args, **kwargs):
-        super(ConstantIncludeNode, self).__init__(*args, **kwargs)
-        try:
-            t = get_template(template_path)
-            self.template = t
-        except:
-            if settings.TEMPLATE_DEBUG:
-                raise
-            self.template = None
-
-    def render(self, context):
-        if not self.template:
-            return ''
-        return self.render_template(self.template, context)
-
-class IncludeNode(BaseIncludeNode):
-    def __init__(self, template_name, *args, **kwargs):
         super(IncludeNode, self).__init__(*args, **kwargs)
-        self.template_name = template_name
 
     def render(self, context):
         try:
-            template = self.template_name.resolve(context)
+            template = self.template.resolve(context)
             # Does this quack like a Template?
             if not callable(getattr(template, 'render', None)):
                 # If not, we'll try get_template
                 template = get_template(template)
-            return self.render_template(template, context)
+            values = {
+                name: var.resolve(context)
+                for name, var in six.iteritems(self.extra_context)
+            }
+            if self.isolated_context:
+                return template.render(context.new(values))
+            with context.push(**values):
+                return template.render(context)
         except:
             if settings.TEMPLATE_DEBUG:
                 raise
             return ''
 
+
 @register.tag('block')
 def do_block(parser, token):
     """
@@ -258,9 +237,5 @@ def do_include(parser, token):
         options[option] = value
     isolated_context = options.get('only', False)
     namemap = options.get('with', {})
-    path = bits[1]
-    if path[0] in ('"', "'") and path[-1] == path[0]:
-        return ConstantIncludeNode(path[1:-1], extra_context=namemap,
-                                   isolated_context=isolated_context)
     return IncludeNode(parser.compile_filter(bits[1]), extra_context=namemap,
                        isolated_context=isolated_context)
diff --git a/docs/releases/1.7.txt b/docs/releases/1.7.txt
index 67dc263a0f..3c478c249a 100644
--- a/docs/releases/1.7.txt
+++ b/docs/releases/1.7.txt
@@ -263,6 +263,8 @@ Templates
   arguments will be looked up using
   :func:`~django.template.loader.get_template` as always.
 
+* It is now possible to :ttag:`include` templates recursively.
+
 Backwards incompatible changes in 1.7
 =====================================
 
diff --git a/tests/template_tests/templates/recursive_include.html b/tests/template_tests/templates/recursive_include.html
new file mode 100644
index 0000000000..dc848f32af
--- /dev/null
+++ b/tests/template_tests/templates/recursive_include.html
@@ -0,0 +1,7 @@
+Recursion!
+{% for comment in comments %}
+    {{ comment.comment }}
+    {% if comment.children %}
+        {% include "recursive_include.html" with comments=comment.children %}
+    {% endif %}
+{% endfor %}
diff --git a/tests/template_tests/tests.py b/tests/template_tests/tests.py
index e9c0a0f7c4..74aec32394 100644
--- a/tests/template_tests/tests.py
+++ b/tests/template_tests/tests.py
@@ -349,6 +349,40 @@ class TemplateLoaderTests(TestCase):
         output = outer_tmpl.render(ctx)
         self.assertEqual(output, 'This worked!')
 
+    @override_settings(TEMPLATE_DEBUG=True)
+    def test_include_immediate_missing(self):
+        """
+        Regression test for #16417 -- {% include %} tag raises TemplateDoesNotExist at compile time if TEMPLATE_DEBUG is True
+
+        Test that an {% include %} tag with a literal string referencing a
+        template that does not exist does not raise an exception at parse
+        time.
+        """
+        ctx = Context()
+        tmpl = Template('{% include "this_does_not_exist.html" %}')
+        self.assertIsInstance(tmpl, Template)
+
+    @override_settings(TEMPLATE_DEBUG=True)
+    def test_include_recursive(self):
+        comments = [
+            {
+                'comment': 'A1',
+                'children': [
+                    {'comment': 'B1', 'children': []},
+                    {'comment': 'B2', 'children': []},
+                    {'comment': 'B3', 'children': [
+                        {'comment': 'C1', 'children': []}
+                    ]},
+                ]
+            }
+        ]
+
+        t = loader.get_template('recursive_include.html')
+        self.assertEqual(
+            "Recursion!  A1  Recursion!  B1   B2   B3  Recursion!  C1",
+            t.render(Context({'comments': comments})).replace(' ', '').replace('\n', ' ').strip(),
+        )
+
 
 class TemplateRegressionTests(TestCase):