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Prefabrication is regarded as a pivot for realizing sustainable building construction. Nevertheless, the sustainable manufacture level of prefabricated components remains unclear. To fill this gap, this study analyzed the environmental impact and optimization potential of prefabricated components via a life cycle assessment (LCA) method. Additionally, social and economic cost were assessed through LCA-based life cycle costing method to reveal the sustainability of prefabricated components. Results indicated that prefabrication rates of 50% and 30% could reduce the potential global warming impact by 31.78% and 13.94%, respectively, compared with the conventional construction method. However, prefabricated components production in China generated up to $ 4.35 × 109 social cost, with critical optimization areas focused on the provinces of Shandong and Hubei. By using artificial neural network estimation, 30% replacement of concrete by demolished concrete lumps could reduce potential fossil depletion and social cost by 10%, decreasing 5.08 × 109 kg CO 2 eq potential global warming for China. Meanwhile, partial replacement of fuels with refuse-derived fuels and improved steel scrap utilization could contribute to further improving environmental performance. • Prefabricated component sustainability was analyzed via a life cycle approach. • Social cost of prefabricated components accounted for 25% in life cycle cost. • A prefabrication rate of 50% can reduce potential global warming by 31.78%. • Reusing demolished concrete lumps can yield around 10% of ecosystem benefits. • Employing refuse-derived fuels and improved adoption steel scrap are eco-friendly. [ABSTRACT FROM AUTHOR]