Circle hooks work best when baited with live bait such as night crawlers and minnows. Anglers using this type of hook with live bait will rarely gut-hook a fish, which makes the circle hook an attractive alternative to normal hooks.
Fish that grab bait on a circle hook will swim away, and the hook will not go in the throat. Instead, the circle hook will wind up in the corner of the mouth--a place the fish will find difficult to shake the hook free from.
A fish hooked in the mouth in this manner will give the angler a much more spirited battle and still be unharmed when the angler reels it to shore or the boat.
Catch and Release
Catch and release fishermen gravitate toward circle hooks because the survival rate of fish caught on these hooks exceeds the rate of those caught with typical "J" shaped fishing hooks.
To set a circle hook when a fish bites, the angler has to slowly pull on the rod tip instead of jerk it back violently. This will rotate the hook into the corner of the mouth and the fish will hook itself.
These hooks will not readily snag on the bottom of a body of water, and anglers find them safer to use, with no sharp point exposed directly to them.