Circular RNA (circRNA) is a type of single-stranded RNA that binds in a closed loop structure by covalent bond. It is highly expressed and has diverse functions in the eukaryotic transcriptome, and it also has the potential to regulate the process of cell differentiation. Stem cells are important seed cells and common research tools in the field of tissue engineering, which have multi-directional differentiation potential and low immunogenicity. Its clinical application for the treatment of diseases has broad prospects, and the research on their differentiation mechanism has gradually penetrated to the molecular level. A number of studies have shown that circRNA participates in stem cell differentiation and plays a key role through a variety of pathways. This article focuses on the expression changes of circRNA during stem cell differentiation and its research advancement in regulating the differentiation mechanism of various stem cells. The review also prospects its possible role in tissue regeneration and repair, in order to further study the molecular mechanism of circRNA involved in stem cell differentiation and provide ideas for clinical practice of stem cells in biomedical engineering.