The circular economy can be understood as one of the sustainability narratives (along with, e.g., the bioeconomy, the green economy and the sharing economy), currently relevant in academia, business and policymaking. Sustainability narratives are characterized by a distinctive set of transferable and scalable solutions, addressing resource/services use and distribution in social-ecological-technical systems. Core solutions in the circular economy are technologically-driven improvements towards reductions of inputs/outputs in production and consumption systems. However, the conceptual diversity of the circular economy is such that it can, like other sustainability narratives, serve multiple sustainability discourses (e.g., ecological modernization, sustainable development and degrowth). In order to cater to societal needs within the planet’s biophysical boundaries, the contribution of the circular economy needs to be strengthened in regard to the protection of biodiversity and ecosystems and to the just distribution of resources, opportunities and prosperity. Socio-cultural change should be understood as complementary to technology- and private sector-driven solutions. While circular economy principles are meant to be translated into tailored micro- and macro- level strategies based on context-specific characteristics and needs, the causal connections between units or geographical regions are a crucial issue for sustainability. The overall co-evolution and harmonization of multiple narratives towards coherent sustainability pathways should strive towards decreasing dependence on fossil resources, reversing biodiversity loss and ecosystems degradation and enabling a quality life for all people. The conclusions of this article provide key points that can further guide analyses and implementation of the circular economy in the context of sustainability transformations.