This study examines the potential of circular economy practices to enhance the environmental sustainability of aquaculture, focusing on rainbow trout farming. Utilising life cycle assessment (LCA), the research evaluates the environmental and energy performance of the production system of an aquaculture company situated in Italy and identifies its main hotspots. A functional unit of 1 ton of rainbow trout live weight is used, with data collected directly from the farm throughout the production cycle, from hatchery to on-growing phases, within a cradle-to-gate framework. Secondary data supplement missing information and background processes. The environmental impacts are calculated by applying the CML-IA baseline and Cumulative Energy Demand methods. The results indicate that environmental impacts are distributed between the pre-fattening and on-growing phases, with a lesser contribution from the hatchery phase. Key hotspots include feed and energy usage, prominently affecting global warming, eutrophication and acidification. Then, the effects of three circular actions are evaluated: recycling slurry as fertiliser, reducing pressure on wild fish stocks, shifting to insect-based feed and transitioning from non-renewable energy sources to photovoltaic energy to enhance sustainability further. The transition to insect-based feed could generate the highest benefits, reducing global warming potential by 14% and freshwater aquatic ecotoxicity by 15%, despite minor trade-offs in marine ecotoxicity. The findings underscore the transformative potential of CE in aligning aquaculture with sustainability goals and underline LCA as a crucial tool for identifying environmental challenges and validating strategies.