Vertical farms are an emerging industry that can enhance urban food self-sufficiency but must align with environmental goals. This study assesses whether circular economy strategies improve the environmental performance of two European VFs—VF1 in Spain and VF2 in Sweden—with differing technological maturity and geographical contexts. Life cycle assessment shows that energy use is the main contributor to environmental impacts, accounting for up to 88% in both cases. Circular strategies such as closed-loop irrigation, waste heat reuse, and material recycling reduce impacts by 7–77%. To compare their maturity level, scenario analyses (Current, Linear, Improvement) reveal that VF1 offers higher potential for future gains (e.g., 29% reduction in global warming impacts), compared to VF2 (34% reduction potential). These findings underscore the relevance of broader changes in upstream production systems, technology maturity and site-specific conditions in shaping the sustainability of VFs, and emphasize the need for further research into context-dependent factors influencing their environmental performance.