diff --git a/compiler/luci/service/src/Nodes/CircleReshape.cpp b/compiler/luci/service/src/Nodes/CircleReshape.cpp
index 0cad3c8db8e..403c2623650 100644
--- a/compiler/luci/service/src/Nodes/CircleReshape.cpp
+++ b/compiler/luci/service/src/Nodes/CircleReshape.cpp
@@ -72,8 +72,7 @@ namespace sinf
  *        - If the `shape` is CircleOutputDummy, the shape is inferred from:
  *          - the attribute if it exists.
  *          - the node itself if the attribute does not exist.
- *        - Else, the shape is inferred from the node iteself.
- *        - TODO support CircleNode
+ *        - If the `shape` is CircleNode, the dynamic shape is propagated.
  */
 loco::TensorShape Algorithm::visit(const luci::CircleReshape *node)
 {
@@ -81,6 +80,7 @@ loco::TensorShape Algorithm::visit(const luci::CircleReshape *node)
 
   const loco::DataType S32 = loco::DataType::S32;
 
+  bool should_infer = true;
   loco::TensorShape shape_by_input;
   {
     LUCI_ASSERT(node->shape(), "2nd input shape() should not be nullptr");
@@ -127,21 +127,16 @@ loco::TensorShape Algorithm::visit(const luci::CircleReshape *node)
     }
     else
     {
-      // We use shape from the node itself
-      loco::TensorShape shape;
-      shape.rank(node->rank());
-      for (uint32_t r = 0; r < node->rank(); ++r)
+      auto node_shape = loco::must_cast<luci::CircleNode *>(node->shape());
+
+      shape_by_input.rank(node_shape->dim(0).value());
+
+      for (uint32_t axis = 0; axis < shape_by_input.rank(); ++axis)
       {
-        // TODO remove this copy from `use_own(node);`
-        // Shape inference rules in this file did not consider unknown dimension.
-        // If some node has unknown dimension, 0 is inserted and wrong shape
-        // inference was done as a result.
-        // To fix this, new shape inference algorithm is being implemented.
-        // Until new inference algorithm is fully implemented, unknown dimension
-        // would be represented as 1 along with TFLite expression.
-        shape.dim(r) = node->dim(r).known() ? node->dim(r).value() : 1;
+        shape_by_input.dim(axis).unset();
       }
-      shape_by_input = shape;
+
+      should_infer = false;
     }
   }
 
@@ -170,7 +165,6 @@ loco::TensorShape Algorithm::visit(const luci::CircleReshape *node)
   uint32_t input_element_count = 1;
   uint32_t output_element_count = 1;
   uint32_t unknown_dim_index = UINT32_MAX;
-  bool should_infer = true;
   for (uint32_t i = 0; i < input_shape.rank(); ++i)
   {
     if (input_shape.dim(i).known())
@@ -178,24 +172,28 @@ loco::TensorShape Algorithm::visit(const luci::CircleReshape *node)
     else
       should_infer = false;
   }
-  for (uint32_t dim_index = 0; dim_index < output_shape.rank(); ++dim_index)
+
+  if (should_infer)
   {
-    const uint32_t dim_value = output_shape.dim(dim_index).value();
-    if (output_shape.dim(dim_index).known() == false)
+    for (uint32_t dim_index = 0; dim_index < output_shape.rank(); ++dim_index)
     {
-      LUCI_ASSERT(unknown_dim_index == UINT32_MAX, "More than one unknown dimension");
-      unknown_dim_index = dim_index;
+      const uint32_t dim_value = output_shape.dim(dim_index).value();
+      if (output_shape.dim(dim_index).known() == false)
+      {
+        LUCI_ASSERT(unknown_dim_index == UINT32_MAX, "More than one unknown dimension");
+        unknown_dim_index = dim_index;
+      }
+      else
+      {
+        output_element_count *= dim_value;
+      }
     }
-    else
+    if (unknown_dim_index != UINT32_MAX)
     {
-      output_element_count *= dim_value;
+      output_shape.dim(unknown_dim_index) = input_element_count / output_element_count;
     }
   }
-  if (unknown_dim_index != UINT32_MAX && should_infer)
-  {
-    output_shape.dim(unknown_dim_index) = input_element_count / output_element_count;
-  }
-
+  
   return output_shape;
 }
 
diff --git a/compiler/luci/service/src/Nodes/CircleReshape.test.cpp b/compiler/luci/service/src/Nodes/CircleReshape.test.cpp
index 8f6175cfb9e..4393d4bfbe0 100644
--- a/compiler/luci/service/src/Nodes/CircleReshape.test.cpp
+++ b/compiler/luci/service/src/Nodes/CircleReshape.test.cpp
@@ -198,3 +198,31 @@ TEST(ShapeRuleTest, reshape_by_dummy_dynamic)
   ASSERT_EQ(6, output_shape.dim(0).value());
   ASSERT_EQ(4, output_shape.dim(1).value());
 }
+
+TEST(ShapeRuleTest, reshape_by_node)
+{
+  auto g = loco::make_graph();
+  auto node_reshape = g->nodes()->create<luci::CircleReshape>();
+  auto tensor_input = g->nodes()->create<luci::CircleInput>();
+  auto shape_node = g->nodes()->create<luci::CircleInput>();
+
+  tensor_input->dtype(loco::DataType::S32);
+  tensor_input->shape({2, 3, 4});
+  tensor_input->shape_status(luci::ShapeStatus::VALID);
+
+  shape_node->dtype(loco::DataType::S32);
+  shape_node->shape({2});
+  shape_node->shape_status(luci::ShapeStatus::VALID);
+
+  node_reshape->tensor(tensor_input);
+  node_reshape->shape(shape_node);
+
+  loco::TensorShape output_shape;
+  luci::sinf::Rule shape_inf_rule;
+
+  ASSERT_TRUE(shape_inf_rule.infer(node_reshape, output_shape));
+
+  ASSERT_EQ(2, output_shape.rank());
+  ASSERT_FALSE(output_shape.dim(0).known());
+  ASSERT_FALSE(output_shape.dim(1).known());
+}