With the acceleration of global urbanization, most of us will live in cities in the future. As the urban population grows, the shortage of residential buildings has become a more and more severe problem. In response to the rising demand for housing, more and more builders in Europe, East Asia, Australia and other places have begun to adopt a method called modular construction to build houses. By pre-constructing building components off-site, then combining them into a complete modular unit and transporting them to the building site for assembly, this approach can cut construction time in half and significantly reduce on-site labour costs (Hong, 2020). Modular construction is well suited for tall buildings due to its inherent topological modular form and increased number of repeatable modules (Thai, Ngo and Uy, 2020). However, most builders currently do not consider the concept of circularity when producing modules, let alone how they will be dismantled and reused in the future. It is conceivable that in the end a large number of discarded modular units will be sent to landfills, creating a large amount of solid waste and consuming many resources to dispose of them, while the functionality of the module still can work to fit the demand. Suppose we can consider the concept of circular economy at the beginning of the project and design the modular units to be easily disassembled and reused, in that case, we will benefit not only economically, but also significantly reduce the carbon footprint of the project. Based on the problem, it can be found that there is currently a research gap between circular economy and modular buildings. And there is still no tool for evaluating the circularity of modular buildings based on their characteristics. Therefore, this study aims to propose a method for circularity measurement based on the characteristics of modular buildings and modular construction. A review of design strategies for circular construction reveals a number of recognised strategies. Depending on the characteristics of modular construction, design for durability, adaptability, disassembling and reusability can be selected as suitable circular strategies for modular construction. From a structural point of view, an evaluation method called Module Circularity Indicator (MCI) was developed. The method takes into account the structure, the connection method and the loading capacity of modules and assigns a weight to each structural factor based on the results of a questionnaire in order to evaluate the circularity of the modular unit on a numerical basis. Project owners and designers, especially structural engineers, can use this method to evaluate the circularity of modular projects in terms of four dimensions. A study using student accommodation as a case was carried out to explore the economic and environmental impact of MCI. Through the case study, it was found that a higher MCI score does not lead to better economic returns and that investors need additional incentives to invest in more sustainable modular buildings. Furthermore, a higher MCI can reduce the environmental impact of a project to some extent, but the materials used in the modules are also important. In order to achieve a circular economy in the construction industry, MCI could be used as an indicator to subsidise highly circular modular buildings in order to encourage owners to invest in highly sustainable projects. This will allow the modular building industry to move towards more circular projects and reduce the environmental impact of the construction industry.