A circular rash can stem from a number of skin conditions. Often, ringworm (a fungal skin condition) is suspected, but rashes may look like ringworm and be something different. Some of the causes of a circular rash are an allergic reaction, infections, or other skin conditions. This article will explain the causes of a circular rash. Credit:frank600 / Getty Images Ringworm Ringworm ( tinea corporis) is a skin infection that is caused by a fungus. It is common in children, but can affect people of all ages. The ringworm fungus likes moist and warm areas. It can grow on the surface of the skin, on the scalp, on nails, on the feet, between the toes, and on the bottom of the feet. Ringworm is contagious. It can spread from person to person and from pet to person. Ringworm can be caught from contaminated items such as those found at the pool, shower, or sink, including clothing, makeup, brushes, and combs. Signs Ringworm presents as a ring-sha...