Disposal of municipal solid waste (MSW) has become increasingly challenging. In this study, we used life cycle assessment (LCA) to evaluate environmental impacts and financial performance of a new approach for MSW disposals, namely All-components Resource Recovery (AcRR), which is based on automatic sorting. We compared AcRR with the standardized Waste-to-Energy incineration (WtE) to provide decision-making support for MSW management. The results show that WtE and AcRR are both good MSW resource treatment methods. Through MSW disposal, WtE generates electricity, while AcRR generates secondary resources such as metals, plastics, pulp and organic fertilizers. WtE releases trace amounts of HCl, PM10, heavy metals, dioxins and dust, while AcRR does not produce such pollutants; AcRR produces more odor gases such as SO2 and H2S. AcRR produces four environmental issues, i.e., Global Warming, Acidification, Photochemical Ozone Synthesis, and Eutrophication, each of which has a smaller impact than WtE; WtE has two more impacts than AcRR: Human Toxicity and Soot and Ashes. The total environmental impact potential of WtE is 3.38 times that of AcRR, and the greenhouse gas emission equivalent is 6.82 times that of AcRR. The cost of construction and operation of AcRR is lower than that of WtE, while the net profit of AcRR is much higher. In conclusion, AcRR is able to screen the mixed MSW into various secondary resources with less environmental emissions and environmental impacts and better financial performance; it may be a promising MSW disposal approach, especially for small cities, but a corresponding supporting industrial system is needed.