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Abstract ReSpool is a transdisciplinary partnership among academia, government, industry, and nonprofit entities created in 2022 to develop and demonstrate a transferable model for the recycling of postconsumer textile and apparel waste into new textile products. ReSpool's engineering and creative teams have innovated proprietary technologies including the Fiber Shredder, which enables textile‐to‐fiber shredding for high‐value applications, and a set of processes for the manufacture of yarns and nonwoven textiles from recycled fibers. ReSpool's circular supply chains begin with discarded clothing collected by Goodwill organizations in the two test regions and involves partnerships with Goodwill to recruit and train workers and install in‐house recycling operations. ReSpool then works with textile manufacturers and home goods and apparel retailers on high‐value applications through waste‐led materials and product development. ReSpool takes a systems‐based approach to sustainability research and problem‐solving. This article briefly overviews the “systems thinking” framework and demonstrates how core principles of this framework structure the team's objectives, activities, and innovations. Finally, the article contributes to current debates regarding systems thinking and circularity by presenting a rationale for systems‐based sustainability research and practice ratcheted to regional systems. By focusing on regional factors, connections, and opportunities, ReSpool aims to maximize its flexibility, relevance, and impact while enabling tailored replication of the model across diverse communities. In this way, ReSpool offers an innovative, circular materials model for the textile and apparel industries, turning textile waste into a source of business innovation, sustainable economic development, and skills training for communities across the country.