Volumetric modular construction (VMC) has considerable benefits in providing better cost, time, quality, productivity, and sustainability performance. However, the adoption is low, owing to various associated risks. This study aims to identify VMC critical risk factors (CRFs) in project stages and project attributes by conducting a systematic literature review of 91 articles. In the project stages, 31 CRFs were identified based on frequency analyses, and divided into four stages: design and planning, offsite manufacturing, transportation and logistics, and onsite assembly. The project attribute risks were divided into the following categories: implementation and schedule, supply chain and financial, safety and ergonomic, and civil and structural. Overall, design and planning risks were critical, as they are crucial in maintaining the project’s upstream and downstream flow. Finally, the study proposed a mitigation framework for using digital technology-based circular strategies to overcome VMC risks. The framework includes disruptive and emergent digital technologies aiming to mitigate risks in VMC, keeping circularity in action. In terms of theoretical contributions, this research delivers a CRF register and categorical division for professionals to better understand the landscape of VMC risks. In terms of practical contributions, the study guides the practitioners towards strategies to overcome the pertinent risks.