A fan favourite, Perfect Circle could be considered the only ‘ballad-like’ song on an otherwise generally uptempo record like Murmur, featuring a dreamy honky-tonk piano and a melancholic chorus. As for many other R.E.M. songs from their earlier period, the lyrics remain obscure, and interpretations by band members vary: guitarist Peter Buck says it was inspired by seeing some kids playing football at sunset before playing a concert in New Jersey, while Michael Stipe says the song is about a girlfriend he had at the time.

Along with other R.E.M. songs like Hairshirt and Everybody Hurts, the 6th track from Murmur has been said by band members to be primarily written by drummer Bill Berry. In fact, after his departure in 1997, the band would re-introduce the song in their live setlists and would dedicate its performances to him.