Research on circular economy (CE) is in great demand since this novel system is intentionally designed to outperform the traditional linear economy with respect to sustainability; however, a wide gap between the intention and applied models persists owing to the incomplete theoretical background and practical guidelines. This paper has two main objectives. The first one is to review the literature on CE, particularly in the context of developing countries. The second one is to explore the possibility of applying circular models to the Mekong Delta of Vietnam (VMD). The study uses a state-of-the-art and conceptual review of the literature on CE and a context-based approach to discuss the probability of applying CE to VMD. The study highlights some unambiguous benefits of CE for sustainable development in the domains of economy, society, and environment. Furthermore, the paper argues that weak institutions and lack of support are considerable barriers to applying the CE models. The regional and inter-provincial development policies and stakeholders’ interaction towards sustainability are restricted although the political intention of greener and smarter economic models from the central government has been disclosed. Using the context-based approach, the study suggests that VMD should focus on developing CE models first in two areas: solid waste management and eco-friendly agricultural production and agritourism. The former one is urgent because the traditional solutions to solid waste are increasingly damaging the environment, whereas the latter one enhances the regional agriculture-based economy. The value of this research is that it is the first to review the literature on developing a circular economy in VMD, thereby supporting further studies in the field.