Environmental impacts of water and land use are often omitted or treated in an over-simplified manner in life cycle assessments (LCAs). This may provide insufficient foundation for LCA-based decision-making when product life cycles include agriculture or forestry. The aim of this paper is to assess water and land use impacts of biobased textile fibres and contribute to the development of methods for characterising such impacts in LCA. This was done by applying and developing methods suggested in literature to an LCA case study of a wood-based textile fibre under development. The water use assessment method considers water deprivation at the midpoint level and the impact on human health, ecosystem quality and resources at the endpoint level. The land use assessment method measures the impact on biodiversity, by considering changes in the vascular plant species richness and the vulnerability of the surrounding ecosystem. In the case study, five wood-based fibre production scenarios were set up in order to account for uncertainties in the future location of operations. For comparison, two cotton production scenarios were set up. An innovative consequential approach was applied in the inventory analysis of water use, in order to capture the system-scale effects of how forestry and cotton farming influence the hydrological cycle. This was compared to a more traditional attributional approach. The results show that the location of operations influences water use impacts, as water extracted from relatively water stressed environments leads to higher impacts. Furthermore, for some scenarios, the result differed considerably between the consequential and attributional inventory approaches. Moreover, it is shown that the consequential approach adds the possibility of recognising increased runoff as a potential benefit of certain types of land use. Biodiversity impacts from the transformation of natural land are much higher than impacts from the occupation of land. If transformation of land takes place, and all impact is allocated to the first harvest, cotton production appears to have a particularly high impact. However, if the transformational impact is allocated over several subsequent harvests, the impact of cotton and wood-based fibres becomes more similar. How to handle this allocation problem deserves further attention in the development of characterisation methods for land use impacts. The study has contributed to the development of characterisation methods by developing a water use inventory approach and by illuminating several methodological aspects of both water and land use impact assessment which need further research.