Globally, around 87% of discarded textiles ended up in landfill, of which more than 90% are reusable and recyclable. Recycling textile waste to other value-added products is economically feasible. To integrate recycling into the apparel waste stream, it is important to know the environmental benefit and impact of the different recycling options. This study presents the environmental performance of apparel recycling and landfill using the life cycle assessment methodology in terms of climate change, acidification, agricultural land occupation and water depletion. Landfill scenarios and recycling scenarios of post-consumer household discarded apparel waste have been developed in the context of Australia. This study finds that the landfill process of natural apparel waste contributes more environmental impact credit compared to synthetic apparel, and this is mainly credited from the power generation from landfill methane gas captured. This study also specifies that the environmental benefit from the landfill process of discarded apparel depends on the ratio of natural fibre and synthetic fibre in discarded apparel. Integration of recycling into the apparel waste stream can potentially generate environmental benefits. A recycling scenario of cleaning wipes shows the highest impact benefits, followed by cotton fibre, insulation material and polyester raw material recycling. Net impact savings of recycling depend on the avoided landfill impact and avoided virgin production impact. The results generated from this study can be useful for future policy recommendations on apparel waste management through recycling. It is clear that increased collection of apparel by recyclers can significantly reduce environmental impact.