<p>With its high production volume and export potential, the apparel sector is globally competitive but environmentally problematic. Packaging and by-products generated during the production process, in particular, become an environmental burden when not appropriately managed in line with circular economy principles, and become components that generate economic and ecological value when structured correctly. Regulations such as the European Union’s Circular Economy Action Plan, the Green Deal, and the SKDM require apparel companies to restructure their packaging and by-product management, encouraging practices such as the use of recyclable and biodegradable materials, eco-labeling, and digital traceability. This study aims to evaluate sustainability strategies for packaging and by-products in the apparel sector within the circular economy framework and to propose a holistic decision-making model for decision-makers. In the study, criteria were defined specifically for the packaging and by-product management of the Denpro denim factory located in the Şanlıurfa Organized Industrial Zone in order to determine the sector’s internal strengths and weaknesses, as well as external opportunities and threats, through a SWOT analysis. Sustainability criteria were then weighted using the Analytical Network Process method. In the final stage, the proposed strategic alternatives were comparatively evaluated and prioritized using the TOPSIS method. The findings reveal that while circular economy awareness is gradually strengthening in the apparel industry, sustainable packaging and by-product management are constrained by factors such as high costs, inadequate infrastructure, and regulatory pressure.</p>