The production of cotton and other fibers causes excessive resource use and environmental impacts, and the deployment of these fibers in “fast fashion” is creating large masses of textile waste. Therefore, various industrial researchers are attempting to develop systems to recycle cellulosic materials. This is a challenging undertaking because of the need to handle mixed waste streams. Alkaline hydrolysis has been suggested as a useful textile recycling process, but its sustainability credentials have not been fully examined via life cycle assessment. The aim of this article is to provide such an examination and to guide process developers by scaling up results from recent laboratory work to a small-scale industrial facility. The results indicate that the recycling process is promising from an environmental point of view. The key issue controlling the relative environmental performance of the recycling system in comparison to a single-use benchmark is how the process for converting recovered cotton into a cellulosic fiber is performed. A fully integrated viscose production system or a system that makes one of the newer cellulosic fibers (e.g., lyocell) from the recovered cotton will improve the performance of the recycling system relative to its alternatives.