This paper reorients the focus of circular economy (CE) transitions by introducing the concept of locally embedded circular economy systems (LECES). Rather than treating local economies as passive recipients of global CE strategies, the paper positions them as active arenas for reconfiguring industrial logics, institutional arrangements, and resource flows. It argues that a shift toward LECES is essential for fostering inclusive, resilient, and context-sensitive pathways to circularity. The paper develops a framework to explore how circularity can serve as a catalyst for local economic revitalisation. It highlights the significance of place-based capabilities, traditional practices, local innovation systems, and inter-firm collaboration in shaping circular trajectories grounded in local specificities. The analysis identifies three interrelated pillars for embedding CE within local economies. First, Institutional anchoring refers to how local governance structures and civic engagement shape norms, policies, and regulatory frameworks. Second, Industrial integration highlights how firms collaborate to establish closed-loop systems within and across sectors. Third, Cultural and material embeddedness underscores how local traditions, identities, and resource regimes inform circular practices.