The adaptive reuse of cultural heritage can contribute to sustainable development and circular economy, preventing waste production and resource depletion by extending the heritage lifespan. This reuse is limited by challenges mostly identified at the case study level. However, further theorising these challenges could enrich the related body of knowledge and contribute to their mitigation. By defining a theoretical framework, this research builds on the cross-sectional analysis of adaptive reuse undertaken in three European cities: Amsterdam, Rijeka, and Salerno. The challenges were identified by representatives of the public, private, knowledge, and non-profit sectors through stakeholder engagement workshops. Examples of challenges common to the three cities are shortcomings in existing approaches; lack of awareness and capacity; cultural heritage interpretation and management; data management; costs; conflicting interests; lack of knowledge; lack of participatory processes; and compliance with regulations and policies. Being identified in diverse European cities, these challenges can be representative within the European region. Arguably, some of these challenges also apply to other regions since they were reported in case studies from Asia, North America, and Oceania. Addressing these challenges could contribute to sustainable development by potentially contributing towards efforts to achieve ten of the Sustainable Development Goals, as some challenges align with some of these goals.