The circular economy is recognized as a critical strategy for advancing sustainable development and achieving the United Nations’ Sustainable Development Goals. This research addresses the limited application of CE assessments at the municipal level and identifies challenges and opportunities for an improved methodology. In 2024, the first scientifically led survey was conducted across all Latvian municipalities to evaluate the level of circularity or readiness for transitioning from a linear to a circular economy. Through self-assessment, all municipalities provided their perspectives on key dimensions of the new economic paradigm. These insights were integrated with feedback from citizens, collected via a separate nationwide survey, to derive a composite index value. This article aims to review other methods and assessments of circular economy conducted at the municipal level worldwide and to assess their applicability to municipalities. While most of the frameworks, either developed institutionally or by research groups, utilize statistical metrics to assess CE at the municipal level, the objectivity of such an approach is overshadowed by the data availability and complexity of the CE concept. Further research is required to develop state-of-the-art methodologies that combine the aspects of quantity and quality in a good balance. In-depth assessments of specific areas might provide more value than a broad measure for a meaningful transition to a CE.