Product Service Systems (PSS) and Smart Services are powerful means for deploying Circular Economy (CE) goals in industrial practices, through dematerialization, extension of product lifetime and efficiency increase by digitization. Within this article, approaches from PSS design, Smart Service design and Model-based Systems Engineering (MBSE) are combined to form a Methodology for Smart Service Architecture Definition (MESSIAH). First, analyses of present system modelling procedures and systems modelling notations in terms of their suitability for Smart Service development are presented. The results indicate that current notations and tools do not entirely fit the requirements of Smart Service development, but that they can be adapted in order to do so. The developed methodology includes a modelling language system, the MESSIAH Blueprinting framework, a systematic procedure and MESSIAH CE, which is specifically designed for addressing CE strategies and practices. The methodology was validated on the example of a Smart Sustainable Street Light System for Cycling Security (SHEILA). MESSIAH proved useful to help Smart Service design teams develop service-driven and robust Smart Services. By applying MESSIAH CE, a sustainable Smart Service, which addresses CE goals, has been developed.