With increasing population and urbanization levels in the People’s Republic of China, environmental problems related to the management of municipal solid waste (MSW) are inevitable. This study aimed to determine the environmental impact of the current MSW management system in Hohhot City and to establish an optimum future strategy for it by applying life cycle assessment (LCA) methodology. Four scenarios were compared using the CML-IA impact characterization method, which took into account their potential contribution to global warming, ozone depletion, human toxicity, photochemical ozone creation, acidification, and eutrophication potentials. The system boundaries included the collection and recycling, transfer and transportation of MSW, and its disposal by incineration, landfilling, and carbon dioxide (CO₂) capture methods. The results showed that the scenario involving landfill and incineration in a ratio of 1:5 was the optimal waste management option; however, increasing the proportion of waste incinerated led to a significant increase in global warming potential. Additional technologies are thus required to overcome this problem, and it was found that the use of CO₂ capture technology resulted in a 30% reduction in the total environmental impact potential. This study’s results indicate that LCA is a valuable and practical tool to support decision-making that can be used to suggest problematic areas in current waste management strategies and to determine an optimal alternative to the solid waste management option.