This study aims to examines the relationship between the circular economy entrepreneurship (CEE) and the circular economy performance (CEP) of manufacturing small and medium-sized enterprises (SMEs) as well as the moderating effect of top management environmental awareness. Considering that the current research highlights the impact of CEE on sustainable performance and the need for sustainable development especially in economically marginal regions like Iraq, expedites the importance of identifying the factors encourage the CEE effectiveness on sustainable performance. Through a quantitative research methodology, data were obtained from 325 respondents of Iraqi manufacturing SMEs from different industrial sectors. SmartPLS.4 by Structural equation modeling (SEM) was used to analyze relationships between CEE, CEP, and the environmental consciousness of top management. The results reveal a significant positive impact of CEE on CEP, demonstrating that entrepreneurial initiatives within circular frameworks enhance sustainable performance. Additionally, top management environmental awareness was found to directly improve CEP and significantly strengthen the CEE-CEP relationship, underscoring the importance of leadership commitment to environmental sustainability. This is helpful information for policymakers and practitioners in the developing world, which suggests resources for effective circular economy entrepreneurship and the importance of environmentally conscious leaders in maximizing the positive effects. We also discuss the limitations and identify some directions for future research, including longitudinal studies and research that accounts for possible other moderating variables (e.g., big data analytics capabilities) that can shed more light on these relationships.