The circular economy is an economic system that aims to minimize waste and make the most of resources by keeping products and materials in use for as long as possible. It contrasts with the traditional linear economy, which has a “take-make-dispose” approach. The transition towards a sustainable circular economy requires changes and innovation along the entire industrial value chain, starting with product design, material processing and manufacturing, consumption patterns, and the product use-phase, up to waste management and recycling. The practical implementation of circular value chains and closed-loop supply chains in most cases also requires an adaptation and modification of business models. In contrast to traditional linear business models, the use phase and the end-of-life treatment of products are brought to the fore in circular business models. As an introduction to circular economic principles, this chapter provides a general overview of the circular economy framework from a systemic perspective. After discussing basic strategies for sustainable development and underlining the severe need for the transition towards a circular economy, this chapter delivers a broad overview of the different areas of a circular economy including aspects of the materials-energy nexus. We introduce basic definitions and explain concepts along the entire circular value chain including business models and product-service systems (PSS). The subsequent discussions mainly focus on limits and challenges of the circular economy as a key element of sustainable industrial development.