In the discourse about the development of farmed animal production (terrestrial livestock production and aquaculture) in the tropics, two important food system outcomes emerge: (1) to supply animal-sourced food (ASF) at a level that suffices healthy future diets, including for poor people, and (2) to contribute to climate change mitigation and minimize pollution with nitrogen and phosphorus. Livestock production and aquaculture contribute to food security directly by increasing producers’ food diversity and availability, but also that of urban consumers, and indirectly through income generation and increased farm resilience. Recently, circularity has come to the fore as an integrated approach to food system development. Circularity has four cornerstones: (1) food crops have highest priority (which implies no food-feed competition), (2) avoid losses, (3) recycle waste and (4) use animals to unlock biomass that humans cannot eat. In this review, the role of farmed animals in circular food systems in the tropics is presented in four case studies and the impacts of circularity on food security and environmental impact mitigation are discussed. The cases are ruminants in grazing systems in West Africa and in Colombia, fish in pond aquaculture in general, and land-limited dairy production in Indonesia. Additionally, options for novel protein sources for use in livestock and fish feeding are presented. It is concluded that farmed animals are important in circular food systems because of their use of land unsuited for crop production, their upgrading of crop residues, and their supply of manure to crop production. Nevertheless, the increasing demand for ASF puts pressure on important characteristics of circularity, such as minimizing food-feed competition, maximization of use of waste streams in feed, and the value of manure for fertilization. Hence, in line with conclusions for Western countries, maximum circularity and sustainability of food systems can only be achieved by optimizing the population size of animals. Thus, a sustainable contribution of ASF production to global food security is complex and in not only a technical matter or outcome of an economic process balancing supply and demand. It requires governance for which public, private, and social actors need to partner.