This paper aims to investigate the supply chain and reverse channels of expanded polystyrene packaging connection in Brazil and their roles to discuss the main challenges towards circular economy. In order to achieve this goal, we propose a four-step method, anchored in the literature, technical visits, and interviews with experts in the expanded polystyrene (EPS) industry. First, the EPS supply chain was characterised and mapped, and secondly, the stakeholders and logistics activities in reverse channels were analysed. Third, the Brazilian legislation and chain structure was reviewed to obtain an understanding of how this can influence the activities developed in reverse channels. Fourth, with an analysis of the data collected before, the barriers to implement EPS reverse chain were presented. The main results establish that the EPS can complete one cycle of the circular economy, which is recycling, but products need to be separated and washed. The most significant waste generators are public and private institutions, residences, and retailers. Notable barriers to its recycling are a lack of understanding of the nature of expanded polystyrene recycling by Brazilian people, high transport cost due to material density, and the dispersion of post-consumer expanded polystyrene in several regions of the country linked with the small number of recycling facilities. Finally, this issue could be explored in industries and companies that require their managers to adopt strategies to improve reverse logistics in order to promote the circular economy. The companies’ actions could facilitate a stronger circular supply chain since they could increase recycling efforts, reduce expanded polystyrene waste, and present new business models. The resulting generation of employment would contribute to the quality of life of contemporary society. The findings presented in the paper enable industries to identify and guide the most demanding significant steps and processes, and to shift the reverse chain and expanded polystyrene recycling to ensure that they operate more efficiently.