The growing impact of the healthcare sector and its environmental consequences (energy-intensive processes, material consumption and waste generation) require rapid actions to be implemented widely. To meet the environmental and climate change challenges faced by the healthcare sector, this review paper discusses how circularity frameworks can be applied to medical textile waste. This review paper explores existing circularity frameworks to address the challenges resulting from textile waste in the healthcare sector. Textile waste, primarily originating from medical garments (scrubs, isolation gowns), patient apparel and bedding, surgical textiles, wound care textiles, personal protective equipment (masks, gowns and aprons), textiles for diagnostic purposes (medical imaging), and textiles for hygiene and sanitation, present an environmental impact due to their non-biodegradability and energy-intensive production processes. This paper conducts a thorough mini review of those circularity frameworks applied to healthcare textile waste along the product’s life cycle within hospitals. The review focuses on the current waste management practices of the hospitals and evaluates innovative circular economy interventions. Case studies and pilot projects that have successfully operated circularity frameworks for managing healthcare textiles waste are included in the review to provide practical insight.