diff --git a/lib/config/contracts.js b/lib/config/contracts.js
index d1861962..e21549b3 100644
--- a/lib/config/contracts.js
+++ b/lib/config/contracts.js
@@ -1,12 +1,15 @@
+indexOf = [].indexOf || function(item) { for (var i = 0, l = this.length; i < l; i++) { if (i in this && this[i] === item) return i; } return -1; };
 var readYaml = require('read-yaml');
 var fs = require('fs');
 var Blockchain = require('./blockchain.js');
+var toposort = require('toposort');
 
 ContractsConfig = function(files, blockchainConfig, web3) {
   this.all_contracts = [];
   this.contractDB = {};
   this.contractFiles = files;
   this.web3 = web3;
+  this.contractDependencies = {};
 
   try {
     this.web3.setProvider(new this.web3.providers.HttpProvider("http://" + blockchainConfig.rpcHost + ":" + blockchainConfig.rpcPort));
@@ -38,8 +41,27 @@ ContractsConfig.prototype.config = function(env) {
   return this.contractConfig[env];
 }
 
-ContractsConfig.prototype.compileContracts = function() {
+ContractsConfig.prototype.compileContracts = function(env) {
   var contractFile, source, j;
+  var contractsConfig = this.config(env);
+
+  if (contractsConfig != null) {
+    for (className in contractsConfig) {
+      options = contractsConfig[className];
+      if (options.args == null) continue;
+
+      ref = options.args;
+      for (j = 0; j < ref.length; j++) {
+        arg = ref[j];
+        if (arg[0] === "$") {
+          if (this.contractDependencies[className] === void 0) {
+            this.contractDependencies[className] = [];
+          }
+          this.contractDependencies[className].push(arg.substr(1));
+        }
+      }
+    }
+  }
 
   for (j = 0; j < this.contractFiles.length; j++) {
     contractFile = this.contractFiles[j];
@@ -53,6 +75,27 @@ ContractsConfig.prototype.compileContracts = function() {
       this.contractDB[className] = contract;
     }
   }
+
+  this.sortContracts();
+}
+
+ContractsConfig.prototype.sortContracts = function() {
+  var converted_dependencies = [], i;
+
+  for(contract in this.contractDependencies) {
+    var dependencies = this.contractDependencies[contract];
+    for(i=0; i < dependencies.length; i++) {
+      converted_dependencies.push([contract, dependencies[i]]);
+    }
+  }
+
+  var orderedDependencies = toposort(converted_dependencies).reverse();
+
+  this.all_contracts = this.all_contracts.sort(function(a,b) {
+    var order_a = orderedDependencies.indexOf(a);
+    var order_b = orderedDependencies.indexOf(b);
+    return order_a - order_b;
+  });;
 }
 
 module.exports = ContractsConfig
diff --git a/lib/deploy.js b/lib/deploy.js
index 764fcfc9..4bd679dd 100644
--- a/lib/deploy.js
+++ b/lib/deploy.js
@@ -27,48 +27,10 @@ deployContracts = function(env, contractFiles, destFile) {
   result = "web3.setProvider(new web3.providers.HttpProvider('http://" + blockchainConfig.rpcHost + ":" + blockchainConfig.rpcPort + "'));";
   result += "web3.eth.defaultAccount = web3.eth.accounts[0];";
 
-  contractDependencies = {};
-
-  if (contractsConfig != null) {
-    for (className in contractsConfig) {
-      options = contractsConfig[className];
-      if (options.args == null) {
-        continue;
-      }
-      ref = options.args;
-      for (i = 0, len = ref.length; i < len; i++) {
-        arg = ref[i];
-        if (arg[0] === "$") {
-          if (contractDependencies[className] === void 0) {
-            contractDependencies[className] = [];
-          }
-          contractDependencies[className].push(arg.substr(1));
-        }
-      }
-    }
-  }
-
-  contractsManager.compileContracts();
+  contractsManager.compileContracts(env);
   all_contracts = contractsManager.all_contracts;
   contractDB = contractsManager.contractDB;
-
-  all_contracts.sort((function(_this) {
-    return function(a, b) {
-      var contract_1, contract_2;
-      contract_1 = contractDependencies[a];
-      contract_2 = contractDependencies[b];
-      if (indexOf.call(contract_1, a) >= 0 && indexOf.call(contract_2, b) >= 0) {
-        console.log("looks like you have a circular dependency between " + a + " and " + b);
-        return exit;
-      } else if (indexOf.call(contract_1, b) >= 0) {
-        return 1;
-      } else if (indexOf.call(contract_2, a) >= 0) {
-        return -1;
-      } else {
-        return 0;
-      }
-    };
-  })(this));
+  contractDependencies = contractsManager.contractDependencies;
 
   deployedContracts = {};
 
diff --git a/package.json b/package.json
index 256051ff..aae94e0d 100644
--- a/package.json
+++ b/package.json
@@ -34,7 +34,8 @@
     "sync-me": "^0.1.1",
     "python": "^0.0.4",
     "methodmissing": "^0.0.3",
-    "jasmine": "^2.3.1"
+    "jasmine": "^2.3.1",
+    "toposort": "^0.2.10"
   },
   "author": "Iuri Matias <iuri.matias@gmail.com>",
   "contributors": [],
diff --git a/test/config.contracts.js b/test/config.contracts.js
index a8c6fa52..33795e99 100644
--- a/test/config.contracts.js
+++ b/test/config.contracts.js
@@ -56,6 +56,25 @@ describe('embark.config.contracts', function() {
         assert.deepEqual(contractsConfig.all_contracts, [ "SimpleStorage", "AnotherStorage" ]);
       });
     });
+
+    context("contracts as arguments to other contracts", function() {
+      before(function() {
+        files = [
+          'test/support/contracts/wallet.sol',
+          'test/support/contracts/simple_storage.sol',
+          'test/support/contracts/another_storage.sol',
+          'test/support/contracts/wallets.sol'
+        ]
+        contractsConfig = new Config.Contracts(files, blockchainConfig, web3);
+        contractsConfig.loadConfigFile('test/support/arguments.yml');
+        contractsConfig.compileContracts('development');
+      });
+
+      it('add contracts to a list', function() {
+        assert.deepEqual(contractsConfig.all_contracts, [ "SimpleStorage", "AnotherStorage", "Wallet", "Wallets" ]);
+      });
+    });
   });
+
 });
 
diff --git a/test/support/arguments.yml b/test/support/arguments.yml
new file mode 100644
index 00000000..fc0fe03b
--- /dev/null
+++ b/test/support/arguments.yml
@@ -0,0 +1,14 @@
+development:
+  Wallet:
+    args:
+      - $AnotherStorage
+  SimpleStorage:
+    args:
+      - 100
+  AnotherStorage:
+    args:
+      - 100
+  Wallets:
+    args:
+      - $Wallet
+staging:
diff --git a/test/support/contracts/wallet.sol b/test/support/contracts/wallet.sol
new file mode 100644
index 00000000..576e8648
--- /dev/null
+++ b/test/support/contracts/wallet.sol
@@ -0,0 +1,8 @@
+contract Wallet {
+  address currency;
+
+  function Wallet(address c) {
+    currency = c;
+  }
+
+}
diff --git a/test/support/contracts/wallets.sol b/test/support/contracts/wallets.sol
new file mode 100644
index 00000000..38e3f0eb
--- /dev/null
+++ b/test/support/contracts/wallets.sol
@@ -0,0 +1,9 @@
+contract Wallets {
+  address wallet;
+
+  function Wallet(address w) {
+    wallet = w;
+  }
+
+}
+