We investigate critical factors enabling the successful implementation of circular ecosystems in the textile industry, with a focus on the interplay between technology and stakeholder engagement. A qualitative approach, involving 35 interviews with managers across 11 Italian SMEs in both B2B and B2C textile segments, was employed. Thematic analysis revealed three key areas where stakeholder collaboration and technology are essential to facilitating the shift from linear to circular: (1) design for circularity; (2) traceability and transparency; and (3) recycling, upcycling and regeneration. We contribute to the literature by providing a stakeholder-based analysis of technology implementation, leading to conceptualising ‘circularity in relationships’ as a key factor of circular transition. From a practical standpoint, while showing that the transition must be led by entrepreneurial moral engagement, we offer insights into how to leverage technologies for supporting, educating and engaging stakeholders and how engaged stakeholders facilitate technology adoption, lowering the costs of circularity.