A circular strategy and architectural design for the Brazilian island Paquetá, located in the heavily polluted bay of Rio de Janeiro. The current take-make-dispose economy, resulting in resource pressure and environmental problems, calls for a circular economy. Islands are perfect living laboratories, because of their clearly defined boundaries and vulnerability to external factors. In this graduation project, Ilha de Paquetá in Rio de Janeiro, Brazil, is taken as a case study. It suffers from the external pollution of the Guanabara Bay in both ecological and economic terms (due to a tourism decline), but the island’s metabolism itself is as linear as the system that causes the bay pollution. For successful implementation of circular interventions, a system-level perspective, based on a Material Flow Analysis for energy, water, and materials, is combined with a hyper-local and pragmatic approach to getting a real ‘sense of place’. The result is, firstly, a long-term strategy for Paquetá to improve the environmental state of the island. And, secondly, an architectural design for a beach pool that forms an alternative for the polluted beaches to enhance tourism. The pool regenerates and utilizes polluted bay water, purified via the wetlands that are integrated part of the design. The impact of the building on the island’s metabolism lies in the integration of a biodigester to reduce the organic waste outflow, and value to the local society and culture is added with adjacent spaces that accommodate room for community events and small-scale, conscious tourism. This way, the project shows how the Circular Economy system-level perspective can be combined with a hyper-local and pragmatic approach to achieve social inclusion.