A pilot study to apply LCA methodology to domestic water cycle of Bologna city is in course of completion. The activity is being carried out within the AQUASAVE project, funded by a LIFE-ENVIRONMENT action of the European Union. The LCA study objective is to develop a model that will allow to compare the overall environmental impact of the 'existing scenario' of the drinking and wastewater treatment systems of Bologna metropolitan area to the 'innovative one' tested in AQUASAVE. The final TEAMTMLCA model of the existing scenario has been completed. In this paper the methodological approach, the limits and advantages of LCA methodology when applied to urban water cycle and the final results of the study are discussed.