This study compares life-cycle (cradle-to-gate) energy consumption and environmental impacts for producing ethanol via fermentation-based processes starting with two lignocellulosic feedstocks: virgin timber resources or recycled newsprint from an urban area. The life-cycle assessment in this study employed a novel combination of computer-aided tools. These tools include fermentation process simulation coupled with an impact assessment software tool for the manufacturing process life-cycle stage impacts. The process simulation file was provided by the National Renewable Energy Laboratory (NREL) and was modified slightly to accommodate these different feedstocks. For the premanufacturing process life-cycle stage impacts, such as the fuels and process chemicals used, transportation, and some preparatory steps (wood chipping, etc.), a life-cycle inventory database (the Boustead Model) coupled with an impact assessment software tool were used (the Environmental Fate and Risk Assessment Tool). The Newsprint process has a slightly lower overall composite environmental index (created from eight impact categories) compared to the Timber process. However, the Timber process consumes less electricity, produces fewer emissions in total, and has less of a human health impact. The amount of life-cycle fossil energy required to produce ethanol is 14% of the energy content of the product, making the overall efficiency 86%. Process improvement strategies were evaluated for both feedstock processes, including recycle of reactor vent air and heat integration. Heat integration has the greatest potential to reduce fossil-derived energy consumption, to an extent that fossil-derived energy over the life cycle is actually saved per unit of ethanol produced. These energy efficiency values are superior to those observed in conventional fossil-based transportation fuels.