Life cycle assessment for sewage sludge treatment was carried out by estimating the environmental and economic impacts of the six alternative scenarios most often used in Japan: dewatering, composting, drying, incineration, incinerated ash melting and dewatered sludge melting, each with or without digestion. Three end-of-life treatments were also studied: landfilling, agricultural application and building material application. The results demonstrate that sewage sludge digestion can reduce the environmental load and cost through reduced dry matter volume. The global warming potential (GWP) generated from incineration and melting processes can be significantly reduced through the reuse of waste heat for electricity and/or heat generation. Equipment production in scenarios except dewatering has an important effect on GWP, whereas the contribution of construction is negligible. In addition, the results show that the dewatering scenario has the highest impact on land use and cost, the drying scenario has the highest impact on GWP and acidification, and the incinerated ash melting scenario has the highest impact on human toxicity due to re-emissions of heavy metals from incinerated ash in the melting unit process. On the contrary, the dewatering, composting and incineration scenarios generate the lowest impact on human toxicity, land use and acidification, respectively, and the incinerated ash melting scenario has the lowest impact on GWP and cost. Heavy metals released from atmospheric effluents generated the highest human toxicity impact, with the effect of dioxin emissions being significantly lower. This study proved that the dewatered sludge melting scenario is an environmentally optimal and economically affordable method.