An envelope detection method by using a peel cone approximation concept and an envelope detection circuit which implements the envelope detection method are disclosed. The envelope detection circuit includes an absolute value-determining circuit, a maximum/minimum value-determining circuit, a plurality sets of comparison circuits, an address encoder, a read only memory (ROM), and a multiplier/adder. A delaying circuit for synchronization is further included in the envelope detection circuit. With the method and the circuit for an envelope detection by using a peel cone approximation, advantages of a compact circuit structure, less operation latency, a low approximation error and a low cost are all achieved.