The main purpose of this chapter is to generate a comprehensive understanding of the transition to sustainability and the circular economy (CE) in the Bulgarian textile and clothing (T&C) industry, and the role that digital technologies play in this transition. The methods used in this research centre on a descriptive-analytical method, an examination of pertinent literature, comparative analysis, field observation and questionnaire/survey. Empirical material is garnered from thematically selected scientific reports and articles, statistical data and the websites of Bulgarian companies. The 35 companies included in this research were randomly selected from online listings of companies in the field of the T&C industry in Bulgaria, and the websites of the mentioned companies were thoroughly studied. The study found that only twelve out of 35 surveyed companies develop sustainability-related actions and activities, with five of these companies pursuing all the eight listed sustainability-related activities. Eight out of 35 companies actively participate in one or more of the CE-related activities, and three companies perform all seven activities. The majority of companies are aware of the benefits of using digital technologies and appreciate the importance of digital technologies in the processes related to sustainability and CE. The findings indicate that a significant part of the studied Bulgarian companies lag behind in adopting policies, strategies and activities related to sustainability, the CE and digital technology deployment. Sustainability activities are better developed in a greater percentage of Bulgarian companies compared to activities related to the CE.