‘Sustainable business practice’ is an aspiration for an increasing proportion of small and medium-sized enterprises (SMEs) around the world, promising profitability, resilience and positive social and environmental impacts. ‘Lean thinking’ has evolved as a popular business strategy for SMEs to achieve sustainable business practice, addressing the need for efficiency in production and waste reduction. In this study we explore the co-evolution of ‘lean and green thinking’ and the potential for lean and green practices to enable successful transitions to sustainable business practice. Focusing on investigations into manufacturing SMEs in Queensland, Australia, we first establish four key enablers and six key barriers to sustainable business practice, derived from a series of in-depth interviews with Chief Executive Officers and senior managers involved in sustainability and lean manufacturing. We offer an institutional theory perspective on these findings, concluding the potential for normative, coercive and mimetic drivers to influence SMEs to shape environmental, social and economic decision making and legitimize the transition to sustainable business practice. We then present a novel ‘Model of strategic enablers of sustainable business practice’ to guide SMEs to intentionally use their lean and green strategies to successfully adopt sustainable business outcomes. We propose that through adopting lean and green thinking to transition to sustainable business practice, SMEs can more rapidly contribute to the circular economy at the level of firm. Agencies and professional bodies can support SMEs in this transition through targeted interventions that address the enablers and barriers presented.