The ongoing fourth industrial revolution, Industry 4.0 (I4.0), is transforming various industries across the globe. At the same time, resource scarcity with high consumption rates has led to the development of the circular economy. Both concepts advocate for sustainable growth and waste minimization. In developing countries, the integrated solid waste management framework is undergoing modification under I4.0 and the circular economy. Urban local bodies are often unable to measure the readiness of their waste management systems to transform under I4.0 and the circular economy. Here the novel concept of Waste 4.0 is developed. ‘Waste 4.0’ is a readiness assessment tool to promote the comprehensive transformation of municipal solid waste management under I4.0 and circular economy. This tool has eight determinants for assessing the municipal solid waste management of urban local bodies. To validate Waste 4.0 the urban local bodies of Indore and Sagar, India were used as case studies. The readiness index for I4.0 in the municipal solid waste management system in Indore and Sagar was 0.72 and 0.14, respectively. The readiness index for circular economy focus in Indore and Sagar was 0.65 and 0.13, respectively. The Indore urban local body was classified as an ‘Experienced’ player for I4.0 Intervention and a ‘circular economy fast adopter’ for circular economy focus under I4.0 readiness. The Sagar urban local body was classified as a ‘Hesitator’ player for I4.0 Intervention and achieved the ‘Business as usual’ tag for circular economy focus under I4.0 readiness. With the Waste 4.0 assessment results urban local bodies can better plan and thus transform their municipal solid waste management systems under I4.0 and the circular economy.