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Life Cycle Assessment (LCA) is useful as an information tool for the examination of alternative future scenarios for strategic planning. Developing a life cycle assessment for a large water and wastewater system involves making methodological decisions about the level of detail which is retained through different stages of the process. In this article we discuss a methodology tailored to strategic planning needs which retains a high degree of model segmentation in order to enhance modeling of a large, complex system. This is illustrated by a case study of Sydney Water, which is Australia’s largest water service provider. A prospective LCA was carried out to examine the potential environmental impacts of Sydney Water’s total operations in the year 2021. To our knowledge this is the first study to create an LCA model of an integrated water and wastewater system with this degree of complexity. A “base case” system model was constructed to represent current operating assets as augmented and upgraded to 2021. The base case results provided a basis for the comparison of alternative future scenarios and for conclusions to be drawn regarding potential environmental improvements. The scenarios can be roughly classified in two categories: (1) options which improve the environmental performance across all impact categories and (2) options which improve one indicator and worsen others. Overall environmental improvements are achieved in all categories by the scenarios examining increased demand management, energy efficiency, energy generation, and additional energy recovery from biosolids. The scenarios which examined desalination of seawater and the upgrades of major coastal sewage treatment plants to secondary and tertiary treatment produced an improvement in one environmental indicator but deteriorations in all the other impact categories, indicating the environmental tradeoffs within the system. The desalination scenario produced a significant increase in greenhouse gas emissions due to coalfired electricity generation for a small increase in water supply. Assessment of a greenfield scenario incorporating water demand management, on-site treatment, local irrigation, and centralized biosolids treatment indicates significant environmental improvements are possible relative to the assessment of a conventional system of corresponding scale.