<p>The global economy is threatened by severe issues such as the depletion of natural resources, enhanced environmental degradation, and rising sea levels. Small and medium enterprises (SMEs), more than 90% of the total companies worldwide, are struggling with adopting circular economy (CE) practices. Although CE tools play an indispensable role in promoting sustainability, there is limited knowledge about CE by SMEs, especially regarding what factors hinder CE adoption. This gap points to the necessity of further understanding how SMEs can successfully address these challenges and implement CE practices. The present systematic literature review provides an overview of recent developments in CE practices, with a particular focus on the year 2024. Scopus is the primary tool for literature search because contemporary and relevant studies are accessible. According to PRISMA guidelines, this study systematically searched for and screened eligible articles to exclude irrelevant and/or possibly biased articles in the selection process. Data analysis and visualization are performed with Python and VOSviewer, respectively. This study addresses the research gap by examining the different levels of CE implementation among SMEs and identifying factors that influence CE adoption. Through this, the theory and application of CE practices are extended, and content and processes for corporate adoption are offered. These approaches have been designed to help contribute to organizational resilience and transformability in an increasingly globalized world. The research provides a theoretical consideration for integrating CE practices into SMEs and addresses the limited awareness of CE tools, focusing on identifying barriers and developing tailored solutions for enhanced CE adoption. This approach strengthens understanding of the challenges faced by SMEs and provides a roadmap for effectively adopting CE practices.</p>