The circular economy has gained increasing attention as a strategy to improve resource efficiency and reduce waste in small-scale agricultural systems. Oyster mushroom farming, with intensive substrate use and high spent mushroom substrate (SMS) generation, offers strong potential for circular practice. However, empirical evidence at the farm level remains limited. This study examines the extent and determinants of the adoption of circular practices among 47 small-scale oyster mushroom farmers in Yogyakarta, Indonesia. A Circularity Index (CI) was employed to quantitatively assess SMS reutilization, complemented by a 3R framework analysis and binary logistic regression. The results reveal relatively high but uneven adoption of circular practices, predominantly driven by recycling-oriented activities such as SMS conversion into organic fertilizer. Meanwhile, reduction-oriented strategies remain largely absent. Logistic regression analysis identifies substrate productivity as the most influential determinant of adoption, suggesting that circular behavior tends to emerge once farmers achieve sufficient technical and economic stability. Knowledge of sustainable agriculture plays a supportive but non-decisive role, whereas education level, peer influence, and farming experience do not significantly affect adoption decisions. These findings indicate that circular practices in oyster mushroom farming primarily emerge as reactive, practice-based responses to production pressures rather than as proactive sustainability strategies. The paper emphasizes the need to implement productivity-based interventions, technical assistance in the field, and context-dependent extension strategies to promote the scalability of circular practices within small-scale agricultural systems.