<p>This study investigates the interactions between regime and niche companies in the Finnish textile industry in the context of circular economy (CE) practices. By examining how and why these companies engage in CE activities, the research sheds light on the significance of these interactions in shaping the industry’s transition towards sustainability. The study categorizes interactions as collaborative, competitive or coopetitive, exploring how these dynamics manifest across various CE practices, including second-hand sales, renting, repair services, textile recycling, and circular fiber production. At the regime-niche level, interactions range from partnerships and market competition to coopetition, which is critical for scaling CE innovations. Niche-to-niche interactions foster innovation and a strong sustainability culture, while regime-regime interactions are focused on joint research, information exchange, and responses to emerging regulations. The findings reveal that collaboration is most prominent in areas such as second-hand sales and circular fiber production, with regime companies seeking to adopt CE concepts without taking on significant risks. However, the study also highlights the challenges these companies face, such as logistical costs, consumer interest, and the risks of collaborating on new business models. Despite these obstacles, expectations for future collaboration remain positive. The study contributes to the literature on sustainability transitions and highlights the need for further research on how niche-regime interactions can be better supported by policy. It also raises important questions about the unintended consequences of certain CE practices, suggesting the need for ongoing evaluation to ensure that these practices truly contribute to sustainability goals.</p>