Life cycle assessment (LCA) methodology is used to evaluate the environmental profile of a product or process from its origin to its final destination. In this paper we used LCA to evaluate the current situation of a wastewater treatment plant and identify improvement alternatives. Currently, the highest environmental impacts are caused by the stages of the plant with the highest energy consumption, the use of biogas from anaerobic digestion (95% burned in torch) and the final destination of the sludge (98.6% for agricultural use and 1.4% for compost). We propose four alternatives for biogas applications and five alternatives for sludge applications and compare them to the current situation. The alternatives were incorporated in a decision support system to identify and prioritize the most positive environmental option. Using biogas to produce electricity or a combination of electricity and heat provided the best environmental options since the energy produced would be enough to supply all the stages of the plant, thus reducing their environmental impact. The best environmental option for the final destination of the sludge is to combine the current situation (fertilizer replacement) with use of the sludge in a cement plant (as a replacement for fuel and raw material).