The paper reviews the current state of Life Cycle Assessment (LCA) introducing the central elements of the methodology and the latest developments in assessment of the environmental, economic and social impacts along the product chain. The central role of LCA in Integrated Product Policy (IPP) is substantiated describing the different tools of the IPP. An overview is given on Design for Environment (DFE), presenting central findings from the latest decade of research and reviewing different DFE tools which have been developed. Describing the DFX’s of Design for environment, a specific focus is devoted to the tools for design for disassembly. Life Cycle Engineering is defined, and a systematic hierarchy is presented for the different levels at which environmental impacts from industry can be addressed by the engineer in order to improve the eco-efficiency of the industry. The role of industry in meeting the sustainability challenge to our societies is discussed, and it is concluded that industry must include not only the eco-efficiency but also the product’s environmental justification and the company ethics in a life cycle perspective in order to become sustainable. In the outlook it is concluded that current drivers seem insufficient to create a strong move of particularly the small and medium-sized enterprises in the direction of sustainability, and a need for stronger legislation and for education and attitude building among future citizens and engineers is identified.