  We report on work in progress on 'nested term graphs' for formalizing
higher-order terms (e.g. finite or infinite lambda-terms), including those
expressing recursion (e.g. terms in the lambda-calculus with letrec). The idea
is to represent the nested scope structure of a higher-order term by a nested
structure of term graphs.
  Based on a signature that is partitioned into atomic and nested function
symbols, we define nested term graphs both in a functional representation, as
tree-like recursive graph specifications that associate nested symbols with
usual term graphs, and in a structural representation, as enriched term graph
structures. These definitions induce corresponding notions of bisimulation
between nested term graphs. Our main result states that nested term graphs can
be implemented faithfully by first-order term graphs.
  keywords: higher-order term graphs, context-free grammars, cyclic
lambda-terms, higher-order rewrite systems
