We suggest a principle for isolation of circularly polarized waves in magnetically active extreme-parameter metamaterials. Using theoretical analysis and numerical simulations, we show that metamaterials with extreme parameters, such as epsilon-near-zero materials (ENZ), when merged with magneto-optical materials, become transparent for forward circularly polarized waves of a given handedness and opaque for backward propagating waves of the same handedness. We theoretically study two possible implementations of such hybrid materials: (1) the case of metal-dielectric stacks; and (2) rectangular waveguide near its cut-off frequency. We prove that these structures can be utilized as compact isolators for circularly polarized waves.