Circular Economy (CE) is a promising solution for a wide range of stakeholders, including companies, governments, and society at large to confront serious environmental concerns (Crome et al., 2023) to address resource depletion, environmental degradation, and waste generation. As Cambodia’s economy heavily relies on resource extraction and export-oriented industries (e.g., textile industry and agriculture contributing significantly to GDP), it generates substantial waste (fundamentally, Municipal Solid Waste (MSW), but also industrial, construction and demolition waste (UNDP, 2022a,b)), and pollution. To tackle such issues, the government has recently demonstrated a stronger commitment to sustainable development by integrating CE principles into a national policy. First, this paper explores the current environmental issues of the country. Secondly, it assessed the country’s CE Strategy and Action Plan. Thirdly, as a primary finding, it was discussed the potential barriers, international collaboration prospects, and implementation recommendations to catalyze challenges into opportunities, covering the gaps observed in the country’s CE Strategy and Action Plan, and following prominent CE trends. Lastly, it concludes that despite the hurdles, CE has the potential in the country to provide socio-economic benefits, including job creation, resilience, reduced reliance on imports, and improved public health. This paper consisting of policy analysis combined with a bibliographical review presumably represents the first work on this topic; it will be useful for foreign investors, academia, and policymakers.