Intermediate labor markets (ILMs) have emerged as a significant mechanism in the transition towards circular economy (CE), facilitating the integration of marginalized groups into the workforce while promoting sustainable practices. ILMs serve as a bridge between traditional labor markets and those seeking to engage in circular economy activities. These markets often focus on providing employment opportunities for disadvantaged groups, including the long-term unemployed and those with intellectual or physical disabilities. A case study in Finland examined how municipalities, CE organizations, Work Integration Social Enterprises (WISEs), and educational institutions can collaborate to promote ILMs and social entrepreneurship. The study used a workshop format to explore practical strategies, guided by the question: “What can be done in practice to promote the intermediate labor market and social entrepreneurship in the circular economy?” Several innovative practices emerged. Instead of relying on national salary subsidies, companies could directly hire through ILMs. Training programs and apprenticeships focused on end-of-life textile sorting and reuse were highlighted, along with ideas for repurposing marketing materials and using surplus materials more efficiently. In conclusion, ILMs can support the transition to a circular economy by providing pathways for marginalized groups into sustainable employment. They facilitate the development of skills necessary for circular economic practices while also addressing social inequalities. As such, a comprehensive approach that integrates ILMs into the broader framework of the circular economy is needed for achieving sustainable development goals.