Understanding the fundamental mechanisms that underlie the synthesis of fullerene molecules in the interstellar medium (ISM) and in the environments of astrophysical objects is an open question. In this regard, using classical molecular dynamics, we demonstrate the possibility of in situ formation of fullerene molecules, such as C60 from graphite, which is known to occur in the ISM, in particular, circumstellar environments. Specifically, when graphite is subjected to thermal and mechanical stimuli that are typical of circumstellar shells, we find that the graphite sheet edges undergo significant restructuring and curling, leading to edge-induced interlayer-interactions and formation of mechanically strained five-membered-ring structural units. These units serve as precursors for the formation of fullerene structures, such as pristine and metastable C60 molecules. The pathways leading to molecular C60 formation consist of a series of steps that involve bond-breakage and subsequent local rearrangement of atoms, with the activation energy barriers of the rate-limiting step(s) being comparable to the energetics of Stone-Wales rearrangement reactions. The identified chemical pathways provide fundamental insights into the mechanisms that underlie C60 formation. Moreover, they clearly demonstrate that top-down synthesis of C60 from graphitic sources is a viable synthesis route at conditions pertaining to circumstellar matter.