A novel circle fitting algorithm is proposed in this paper. The key points of this paper are given as follows: (i) it formulates the circle fitting problem into the special source localization one in wireless sensor networks (WSN); (ii) the multidimensional scaling (MDS) analysis is applied to the data points, and thus the propagator-like method is proposed to represent the circle center parameters as the functions of the circle radius; (iii) the virtual source localization model can be rerepresented as special nonlinear equations of a unique variable (the circle radius) rather than the original three ones (the circle center and radius), and thus the classical fixed-point iteration algorithm is applied to determine the radius and the circle center parameters. The effectiveness of the proposed circle fitting approach is demonstrated using the simulation and experimental results.