The Microalgal Microbial Fuel Cell (MMFC), a type of photobioelectrochemical system, possesses considerable potential for treating effluents, generating biomass, and producing bioenergy. This study assessed the environmental performance of microalgal biomass production within a photobioelectrochemical system, contrasting it with a conventional bench-scale production system. Our findings emphasize the noteworthy role of electricity consumption in providing light, facilitating cathode agitation, and enabling anode medium recirculation, all of which significantly influence the environmental impact. Therefore, the LCA study revealed essential insights about the MMFC system, demonstrating its potential to mitigate environmental impacts and to provide biomass recovery and bioelectricity generation. The MMFC system exhibited superior biomass production and reduced environmental repercussions compared to the conventional system, which reduced the impact in all assessed categories. The results present the importance of MMFCs in sustainable microalgal biomass production, providing valuable insights into their potential for efficient wastewater treatment and renewable energy generation. In this context, the LCA can guide the better way to conduct the MMFC systems, allowing for the identification of high efficiency in terms of bioproducts and less environmental impacts.