Circular RNAs (circRNAs), a novel class of non-coding RNAs, can interact with miRNAs through a sequence-driven sponge mechanism, thereby regulating the expression of their downstream target genes. CircRNA-1967 was found in secondary hair follicles (SHFs) of cashmere goats, but its functions are not clear. Here, we showed that both circRNA-1967 and its host gene BNC2 had significantly higher expression in SHF bulge at anagen than those at telogen of cashmere goats. Also, circRNA-1967 participates in the differentiation of SHF stem cells (SHF-SCs) into hair follicle lineage in cashmere goats. RNA pull-down assay verified that circRNA-1967 interacts with miR-93-3p. We also indicated that circRNA-1967 promoted LEF1 expression in SHF-SCs of cashmere goats. By dual-luciferase reporter analysis, we found that circRNA-1967 up-regulated LEF1 expression through the miR-93-3p-mediated pathway. The results from this study demonstrated that circRNA-1967 participated in the differentiation of goat SHF-SCs into hair follicle lineage by sponging miR-93-3p to enhance LEF1 expression. Our founding might constitute a novel pathway for revealing the potential mechanism of the differentiation of SHF-SCs into hair follicle lineage in cashmere goats. Also, these results provided a valuable basis for further enhancing the intrinsic regeneration of cashmere goat SHFs with the formation and growth of cashmere fibers.