An essential responsibility in achieving the goals of water resource security strategies is efficient management, water-saving use, and water resource protection. In rural areas, the main issues were the high rate of inefficient water supply systems and water losses, as well as the fact that domestic water waste management is still out of control and water resources are contaminated. One of the causes was the absence of appropriate economic models that might guide the development of the water supply in a sustainable and effective manner. This essay discussed how circular economics could be used to manage rural water supplies. Reviews of the literature on policies, circular economics applications worldwide, and its adaptation in water supply management suggested potential circular economics principles for the water supply sector. They were 3R, which stood for Reduce, Re-use, and Recover. The incentive policy mechanisms for circular economics in water supply in Vietnam were not synchronized, and they were regulated in many relevant law documents. As a result, it was required to put forward a plan for rural water supply management based on the principles of the circular economy, which included developing scientific research, establishing regulations, and defining indicators for reducing, reusing, and recovering water resources.