As it happens, it's not really a circle, but a sphere, or more accurately, a spherical shell like a balloon. A long time ago, thousands of years ago, a star blew up. Matter screamed away from it at thousands of kilometers per second, sweeping up material around it and getting compressed. Over time the material slowed considerably, and what we're left with is this thin-shelled soap bubble in space. A bubble 20 light years - 20 thousand trillion kilometers - across.
I love this picture. It was released last year literally the same day I posted my Top Astronomy Pictures. So technically it's from 2010, but I'm happy to list it here since it missed the cut off last time.