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Abstract Background The aim of this paper is to reconsider the necessity for the green transition and the key preconditions for the implementation of a circular economy in Western Balkan countries. With the objective of the research in mind, the method of analysis and synthesis was applied to determine (1) regulatory and institutional prerequisites for the green transition; (2) the need for the Western Balkan countries to redefine the model of sustainable economic growth towards the green transition; (3) the development opportunities for recovery defined in the Green Agenda for the Western Balkans; and (4) the possibility of implementing the circular economy in the Western Balkans. Main text The main findings of the research indicate that: (1) the countries of the Western Balkan region, following the example of the EU, should define a national strategic approach to the green transition with an accompanying action plan and regulatory framework; (2) the biggest challenge of the green transition is the reform of the energy sector and the restructuring of the energy-intensive economy; (3) the countries have untapped potential in renewable energy sources and report the improvement of energy efficiency; (4) the circular economy can boost the green transition, because the countries of the region have a five-time lower value of resource productivity than the average of the EU, while the generation of waste (excluding major mineral wastes) per GDP unit is lower compared to the EU; (5) cross-sectoral governance should be more coordinated. Conclusions The green transition might be a development opportunity for the Western Balkans, which should enable sustainable economic growth as well as energy security and environmental protection. However, the implementation of the Green Agenda is not easy, because the region faces the problem of underdeveloped regulatory and institutional capacities that might provide not only the base for long-term planning but also financial resources for the efficient implementation of projects. In addition, it is essential to understand the principles of the Green Agenda and the interaction of all activities that should enable the achievement of defined goals.