Global society consumes goods and services as if we had 1,75 planets Earth. Continuous heat records being set as the time goes by and more severe climate events are taking place more frequently. Landfills and the world ocean are filled with great amounts of waste continuously. These are just few consequences that are driven by linear ‘take-make-use-dispose’ model of consumption which is very opposite of what the term ‘sustainability’ stands for. However, the concept which might correlate with sustainability and sustainable development is circular economy. Many studies have shown potential benefits deriving from this concept. On the other hand, it requires great systemic transformations and creates a lot of challenges. The aim of the research is to evaluate where does the concept of circular economy stand within the dimensions of sustainable development. Literature review was used to evaluate the links between circular economy and sustainable development. Results show that the greatest emphasis within the concept of circular economy has been put on environmental dimension of sustainable development and such environmental benefits as conservation of resources, climate change mitigation etc. Economical dimension is also addressed by several studies emphasising efficient use of circular business models. However, there is a lack of good practices implementing circular business models and lack of measurable proof that they are profitable. Therefore, the strength of link between economic dimension of sustainable development and circular economy is still an open issue. The weakest link is between circular economy and the social dimension of sustainable development. However, it is stated that transition to circular economy can accelerate job creation contributing to social dimension of sustainable development. To sum up, circular economy is a view on the economy from the environmental protection point of view. Further research should be addressed at researching the measurability of circular economy in order to evaluate implementation progress in specific territory, region or country.