Bladder cancer (BC) is one of the most common malignant tumors in males globally. Its progression imposes a heavy burden on patients; however, the expression profile of circular (circ)RNAs in BC progression remains unclear. This study explored changes in circRNA expression during BC progression by sequencing different grade BC samples and normal controls to reveal the circRNA expression profiles of different BC grades. Gene Ontology (GO) and Kyoto Encyclopedia of Gens and Genomes (KEGG) pathway analyses, and protein‑protein interaction network construction were used to predict pathways that the differentially expressed circRNAs may participate in. circRNA expression levels were detected using reverse transcription‑quantitative polymerase chain reaction (RT‑qPCR) and dual‑luciferase reporter assays were used to investigate the interactions between circRNA and microRNA (miR). Cell Counting Kit‑8 and Transwell assays were also performed to detect cell proliferation, migration, and invasion. In total, 244 circRNAs were found to be differentially expressed in high‑grade BC compared to low‑grade BC, whilst 316 dysregulated circRNAs were detected in high‑grade BC compared with normal urothelium. Furthermore, 42 circRNAs overlapped between the two groups, seven of which were randomly selected and detected by RT‑qPCR to validate the sequencing results. GO analysis and KEGG pathway analyses revealed that the differentially expressed circRNAs may participate in BC via 'GTPase activity regulation', 'cell junction', and 'focal adhesion' pathways. Of note, we proposed that a novel circRNA in BC progression, hsa_circ_0137606, could suppress BC proliferation and metastasis by sponging miR‑1231. Through bioinformatics analysis, we predicted that PH domain and leucine rich repeat protein phosphatase 2 could be a target of the hsa_circ_0137606/miR‑1231 axis in BC progression. Using high‑throughput sequencing, this study revealed the circRNA expression profiles of different grades of BC and proposed that the novel circRNA, hsa_circ_0137606, suppresses BC proliferation and metastasis by sponging miR‑1231. Our findings may provide novel insight into potential therapeutic targets for treating BC.