<p>The transition from linear to circular business model has emerged as a critical strategy for achieving sustainable business performance, however, empirical evidence explaining the mechanisms and drivers of circular business model adoption remains limited. This study is based on the Natural Resource-Based View (NRBV) and explores the most important organizational, technological and institutional factors that determine CBM adoption, and its impact on firms’ sustainable business performance. Partial Least Squares Structural Equation Modeling (PLS-SEM) has been used to analyze data collected from a sample of 200 firms in four major cities. The findings reveal that technology advancement, circular infrastructure, availability of resources, stakeholders pressure, environmental compliance and consumer’s awareness are important antecedents of CBM adoption, of which technological advancement is the most effective factor. The results further validate the mediation of environmental management for circular business model and sustainable business performance relationship. The findings of the study will guide firms to become economically resilient in the long-term by lowering costs, fostering innovation, and building long-term competitive advantage while simultaneously decreasing the environmental footprint through minimized waste, emissions, and resource consumption. This study adds to the body of knowledge by theorizing CBM adoption as a strategic environmental resource and not a separate operational process, but incorporates several antecedents in the Natural Resource-Based View (NRBV) framework.</p>