The economic impacts and security hazards of hardware piracy is not apt to be neglected compared to software, but is even more severe. The loss due to global hardware piracy has now reached the level of billions per month, with a major share in almost all electronic devices. It was reported by the Alliance for Gray Market and Counterfeit Abatement that about 10% of the start-of-the-art technology products available on market are counterfeits. In this project, a theory and a framework of circuit obfuscation for hardware counterfeit and piracy prevention are developed. Obfuscation is a technique to make a design obscure therefore hard to understand. The recent theoretical studies on program obfuscation are leveraged, and the project is built on the definition of the best-possible obfuscation. With efficient obfuscators to structurally transform a circuit to an obfuscated one, any security enhancement circuitry such as a PUF-lock or a watermark can be embedded in a circuit without being discovered. Not understanding a design, an potential attacker could not modify the design to remove the security circuitry or to insert any Trojan. Besides the framework and relevant tools for circuit obfuscation, the project also works on a large number of real-world applications to validate the approach.