In today’s complex and rapidly changing world, the cultivation of critical thinking skills is paramount for individuals and organizations seeking to navigate challenges, innovate solutions, and effect positive change. This paper introduces a pioneering initiative—a Circular Economy Living Lab—established within the dynamic ecosystem of a Spanish university. Positioned at the nexus of academia, industry, and society, this living lab embodies a proactive approach to addressing pressing environmental challenges, while nurturing innovation and fostering collaborative learning through inclusion of action research and learning methodologies to foster the development of higher thinking skills in the students and catalyze sustainable innovation.