The textile industry is facing increasing criticism because of its intensive use of resources –both natural and fossil derived– and the negative environmental and societal impacts associated with the manufacturing, use and disposal of clothes. This has led to a desire to move towards a circular economy for textiles that will implement recycling concepts and technologies to protect resources, the environment and people. So far, recycling processes have been focused on the chemical and mechanical reuse of textile fibres. In contrast, bio-based processes for textile production and recycling have received little attention, beyond end-of-life composting. However, the selectivity and benign processing conditions associated with bio-based technologies hold great promise for circularising the textile life cycle and reducing the environmental impacts of textile production and processing. Developing circular and sustainable systems for textile production requires a revolutionary system approach that encompasses the choice of material and finishes being designed for recycling at the end of life, and in this context bio-based processes can help provide the means to maintain materials in a closed loop. This paper reviews established methods in mechanical and chemical recycling processes in closed-loop textile recycling of all fibre types, as well as bio-based processes that demonstrate open-loop textile recycling. Fermentation and enzymatic processes have been demonstrated for the production of all types of textiles, which in combination with enzymatic deconstruction of end of life cellulosic textiles could allow them to be recycled indefinitely. Within the context of the circular economy, bio-based processes could extend mechanical and chemical textile recycling mechanisms in the technical cycle, enabling greater circularity of textiles in the biological cycle before composting takes place.