Bioplastics — typically plastics manufactured from bio-based polymers — stand to contribute to more sustainable commercial plastic life cycles as part of a circular economy, in which virgin polymers are made from renewable or recycled raw materials. Carbon-neutral energy is used for production and products are reused or recycled at their end of life (EOL). In this Review, we assess the advantages and challenges of bioplastics in transitioning towards a circular economy. Compared with fossil-based plastics, bio-based plastics can have a lower carbon footprint and exhibit advantageous materials properties; moreover, they can be compatible with existing recycling streams and some offer biodegradation as an EOL scenario if performed in controlled or predictable environments. However, these benefits can have trade-offs, including negative agricultural impacts, competition with food production, unclear EOL management and higher costs. Emerging chemical and biological methods can enable the ‘upcycling’ of increasing volumes of heterogeneous plastic and bioplastic waste into higher-quality materials. To guide converters and consumers in their purchasing choices, existing (bio)plastic identification standards and life cycle assessment guidelines need revision and homogenization. Furthermore, clear regulation and financial incentives remain essential to scale from niche polymers to large-scale bioplastic market applications with truly sustainable impact.