We present 2.5-45 m ISO SWS spectra of the Circinus galaxy which is one of the closest spirals containing both a visually obscured Seyfert nucleus and circumnuclear starburst activity. In addition to PAH features, H2 and low excitation ionic lines ([FeII], [NeII], [SIII]) from the starburst region its spectrum shows several prominent lines from highly ionized species ([NeIII,V,VI], [SIV], [MgV,VII,VIII], [OIV], [SiIX]) which arise in gas photoionized by the AGN within its ionization cone. Adopting solar abundances and a density of 5000 cm 3 derived from the [NeV]14.3/24.3 m ratio we have developed a model which can reproduce the absolute fluxes of most of the visible/near infrared and ISO lines from species with ionization energies in the range 50 320 eV to within a factor 2. Most of the discrepancies can probably be attributed to uncertainties in the calibration, abundances and atomic parameters. Of particular interest for further work are [OIV] 26 m and [SIV] 10.5 m which are observed to be a factor 2 brighter and fainter respectively than expected. The best fit ionizing spectrum is characterized by a 0:5 X-ray continuum consistent with recent ASCA satellite observations plus a pronounced UV bump which peaks at ' 70eV (180Å) in a plot of F versus and is responsible for most of the ISO lines. Models in which the UV bump is represented by a broken power law, typical of a thin accretion disc, or a quasi black body at 2 x 105K give equally good fits to the observed emission line spectrum. Whatever its origin it appears that re-processed ionizing radiation from the AGN probably dominates over the starburst contribution to the total infrared luminosity. Send offprint requests to: A. Moorwood email: amoor@eso.org ? Based on observations with ISO, an ESA project with instruments funded by ESA Member States (especially the PI countries: France, Germany, the Netherlands and the United Kingdom) and with the participation of ISAS and NASA. The SWS is a joint project of SRON and MPE.