Generally water-wastewater systems in developed cities contribute significantly to public health. But, the related systems are resource intensive and lack circularity. Supplying and heating up drinking water as well as treating domestic wastewater are related to relatively high energy consumption and require a major infrastructure. However, there are potentials to reduce the environmental impacts of these systems by using the thermal and chemical energies and nutrients contained in the wastewater. If organic municipal waste is added the energy efficiency of the entire system could further enhanced.Using a regional Life Cycle Assessment approach, the overarching aim of the paper is to assess the environmental impacts of different systems alternatives which aim to increase the resource and energy efficiency by separating wastewater at the source in greywater and blackwater and co-digest the latter with organic municipal solid waste. The results are compared to an existing system of a German medium-sized urban neighborhood. The impacts assessed are two resource-related (fossil and metal depletion) and three emissions-related (climate change, photochemical oxidant formation and terrestrial acidification).Under the conditions of the settlement investigated, the discussed alternative systems show a noteworthy decline of the environmental impacts compared to the status quo: from -68.0 (metal depletion) up to −96.5% (climate change). Thus, even in existent settlements transforming the current linear system in a more circular one could be a promising strategy to enhance the resource efficiency of water-wastewater-waste-energy systems. A slight advantage of a “sewerless” system can be identified.