With a growing population and increased use of resources, there is an urgent need to transform towards sustainable production in order to stay competitive. Prior studies suggest that circular thinking positively impacts the environmental impact of products. However, few studies have investigated the implications of applying circular thinking to the design of production equipment. We address this research gap by looking at what circularity is and how it can be perceived in the context of production equipment. Our research reveals that different circularity requirements need to be implemented in different phases of the life cycle of the production equipment. However, to succeed the requirements need to be considered already early in the design phase of the production equipment. Further, since the development of production equipment is a co-creation between the equipment with the manufacturing company, i.e. users of the production equipment. The circularity thinking between the two partners needs to be aligned and coordinated. Our findings emphasise the need for a holistic approach with system thinking implemented early in the life cycle of production equipment.