Purpose – This study explains how circular economy–oriented intangible resources are converted into sustained innovation outcomes by examining how circular intellectual capital (human, structural and relational) translates into generative performance through knowledge orchestration and circular transformation practices. Design/methodology/approach – We used a three-wave, time-lagged survey of managerial key informants from circular-initiative firms in Mainland China (final matched sample n = 122), spanning manufacturing and product-centric logistics/service SMEs. Hypotheses were tested using variance-based structural equation modeling (SEM) with bootstrapping. Findings – Circular human, structural and relational capital each positively predict both circular knowledge orchestration potential and circular knowledge orchestration realized. However, orchestration potential does not significantly translate into orchestration realized. Both orchestration states independently stimulate circular transformation practice, which in turn increases generative performance. Indirect effects are supported through two paths: (a) via orchestration potential and transformation practice and (b) via orchestration realized and transformation practice. Originality/value – The study advances resource orchestration logic in circular settings by showing that orchestration potential and realized are distinct capability states rather than a necessary sequence and by identifying circular transformation practice as the behavioral conduit through which circular intellectual capital yields generative performance.