Textiles and clothing are an integral part of the global economy. We cannot persevere without the existence of textiles in their various forms, namely clothing, home textiles, personal protective equipment, transportation, construction and more. In Portugal, in 2022, exports from the textile and clothing industry amounted to €6.1 billion, a value never reached before, representing a 13% increase compared to 2021. The national textile and clothing sector generated over €8.6 billion in revenue in 2022, reflecting an 8% growth compared to 2021 and involved around 129,000 workers across more than 11,000 companies. Research into the textile and clothing (T&C) industry, as found in various studies, is of growing significance to accelerate the implementation of sustainability and circularity in the industry—from products and processes, to human resources—and by optimising the use of new technologies in the digital era. Such initiatives will play a key role in meeting the United Nation’s Sustainable Development Goals and those set by the European Union (EU) for 2030 and 2050. The objective of this chapter is to analyse sustainability strategies and circularity practices, and their relationship with the use of digital technologies in the Portuguese T&C sector. The findings identified a significant adoption of sustainability and circular practices which are currently evolving and often linked to Portuguese R&D projects. However, companies still face difficulties in establishing productive upstream and downstream partnerships to advance sustainability objectives. Digital technologies are seen as a means of increasing efficiencies and saving resources during the transition to sustainability and a circular economy. The T&C industry in Portugal is developing significant efforts in sustainable practices and in digitalisation for the transition to a circular economy, and to support alignment with the United Nations Sustainable Development Goals.