As Dan mentioned, you can add a circular map frame to your layout that is tied to a Map View. The Map View will have an image added to it - be sure to turn off the basemap as the image may (or may not) have a world file. Once you add the circular map frame, go to the circular map frame properties and select the Map View that has your image. If you want to zoom in the image to fill the circle map frame, go to your Layout tab and select Activate from the Map group. Zoom or out to have the picture fill the entire circular map frame. Voila!