The aim of this study was to assess the potential environmental impacts associated with high rate algal ponds (HRAP) systems for wastewater treatment and resource recovery in small communities. To this aim, a Life Cycle Assessment (LCA) was carried out evaluating two alternatives: i) a HRAP system for wastewater treatment where microalgal biomass is valorized for energy recovery (biogas production); ii) a HRAP system for wastewater treatment where microalgal biomass is reused for nutrients recovery (biofertilizer production). Additionally, both alternatives were compared to a typical small-sized activated sludge system. An economic assessment was also performed. The results showed that HRAP system coupled with biogas production appeared to be more environmentally friendly than HRAP system coupled with biofertilizer production in the climate change, ozone layer depletion, photochemical oxidant formation, and fossil depletion impact categories. Different climatic conditions have strongly influenced the results obtained in the eutrophication and metal depletion impact categories. In fact, the HRAP system located where warm temperatures and high solar radiation are predominant (HRAP system coupled with biofertilizer production) showed lower impact in those categories. Additionally, the characteristics (e.g. nutrients and heavy metals concentration) of microalgal biomass recovered from wastewater appeared to be crucial when assessing the potential environmental impacts in the terrestrial acidification, particulate matter formation and toxicity impact categories. In terms of costs, HRAP systems seemed to be more economically feasible when combined with biofertilizer production instead of biogas. On the whole, implementing HRAPs instead of activated sludge systems might increase sustainability and cost-effectiveness of wastewater treatment in small communities, especially if implemented in warm climate regions and coupled with biofertilizer production.