The objective of this master thesis is to develop knowledge to explain the possible effects of demonstration projects in circular building and their contribution to the building sector’s transition to a circular economy. Based on this objective, this study asks a question regarding the ways in which demonstration projects in circular building such as the Circle House contribute to increasing circularity within the building sector. In this study, the answer to this question is firstly based on an evolutionary approach of the Danish building sector, in light of the multilevel perspective approach. Secondly, the study focuses on the analysis of local experiments (i.e. explorative experiments and demonstration projects) in circular construction. Finally, the study presents a discussion revolving around the interactions and effects of demonstration projects in the building sector and at a niche level. It is then suggested that demonstration projects perform important roles in circular building niche formation, and under certain conditions constitute important factors for the dissemination of circular building.