Textile industry is one of the most polluting industries due to the large quantities of dyeing wastewater it generates and discharges. Herein, we report an eco-friendly and sustainable circular coloration technology based on cationic polyelectrolyte complex to realise salt-free, zero-effluent-discharge circular dyeing for cotton fabrics with a recyclable dyebath by using a typical cationic polyelectrolyte polyhexamethylene biguanide (PHMB) bonded with anionic dyes. The cotton fabrics were first treated with PHMB and then dyed with three commercial acid dyes. Colour measurements show that the colour strength is controllable by adjustment of concentrations of both PHMB and the dyebath. The dyed fabric samples were found to have good/excellent colour levelness (<0.49), and the colour fastness (Grade 3–5) was basically satisfactory and acceptable. The dyebath was proved to be recyclable for circular dyeing occurring at room temperature, which greatly reduces consumption of both water and heat energy for textile dyeing. Meanwhile, the dyed fabrics showed antimicrobial activity, particularly for the gram-positive S. aureus, which may help reduce the healthcare-associated infections that transmit through textiles. These results suggest that cationic polyelectrolyte-based circular dyeing could provide a promising and practicable strategy to address the pollution issue caused by wastewater generated in dyeing process in the textile industry.