Japanese mountainous communities with terraced rice fields—once sustained through resource circulation and self-sufficient local systems have undergone substantial transformations since the postwar period. Depopulation, aging, and structural changes in rural economies have undermined their traditional sustainability, leading to weakened agricultural capacity and reduced community resilience. This paper aimed to understand how those mountainous communities can regain their sustainability through rural revitalization and activation of a resource-oriented farming based on circulation of resources. An analytical framework called fiver drivers of circularity was utilized for this research to clarify specific and contextual these circularity divers in Kamanuma community as a case study. Data were collected through semi-structured interviews with local farmers, and the analysis followed a thematic approach. Findings show that the natural resource driver forms the foundation of Kamanuma’s circular system. Traditional Tensui (rain-fed) rice farming, the repurposing of rice straw for tools, fertilizer, and handicrafts, as well as charcoal making as part of the Satoyama lifestyle, were identified as key components of resource-oriented farming in the village. These practices support a localized food system in which rice and processed food goods circulate within the community, contributing to multifunctionality, self-sufficiency, and enhanced value for residents and visitors. The knowledge and skills driver highlights the existence of a local network that facilitates agricultural cooperation, knowledge exchange, and the continuation of traditional practices within and beyond the community. However, the study also reveals that the long-term sustainability of Kamanuma depends heavily on securing human resources to maintain terraced farming. Given that farming alone is not financially viable, continuous urban–rural exchange programs—where volunteers from urban areas provide labor and support—play a crucial role in sustaining agricultural activities and enabling resource circulation. Accordingly, balancing urban–rural exchanges with other drivers is fundamental to functioning of Kamanuma’s as a whole and to the sustained human–landscape interactions that can contribute to landscape preservation.