<p>The construction sector is a significant global contributor to resource consumption, waste generation, and carbon emissions, making the adoption of Circular Economy (CE) principles crucial for sustainable development and decarbonization. This study conducts a comparative analysis of construction and demolition waste (CDW) management strategies in the United Kingdom (UK) and the United Arab Emirates (UAE), two countries that represent distinct regulatory and economic models. The UK’s compliance-driven approach, characterized by Extended Producer Responsibility (EPR), landfill taxation, and mandatory digital tracking, has institutionalized material recovery; however, it continues to rely on downcycling and faces challenges related to market standardization and integration with SMEs. Meanwhile, the UAE’s innovation-led, incentive-driven strategy has stimulated early-stage circular practices through public investment and flagship projects; however, it struggles with enforcement gaps and fragmented secondary markets. The analysis highlights that neither strict regulation nor voluntary incentives alone ensure the adoption of systemic CE. Grounded in a comparative, multi-level institutional perspective, the study develops a hybrid implementation model that integrates regulatory enforcement, innovation facilitation, and market incentives to enhance circularity across the construction value chain. The model is structured around five strategic pillars and supported by enabling conditions such as governance capacity and institutional coordination. It promotes a shift from basic recovery to higher-value circularity through strategies such as design for deconstruction and digital traceability. The study concludes with strategic recommendations for policymakers and industry stakeholders to strengthen regulatory frameworks, enhance technological integration, and foster inclusive market development for sustainable and low-carbon construction.</p>