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Environmental impacts associated with a dairy processing industry are directly related to consumption of water and energy, as well as the generation of waste and wastewater. The objective of this research is to suggest improvements for increasing the environmental efficiency of a dairy factory using Environmental audit and Life Cycle Assessment (LCA) for the first time in south India. A gate-to-gate approach was conducted based on environmental audit data. LCA calculations of 10 dairy products was performed according to ISO 14040 and ISO 14044 to identify and quantify the impacts within the system boundary using the LCA software SimaPro (R) 8.1.1.16. Calculations were based on IMPACT 2002+ impact assessment method consisting of 15 midpoint categories and four endpoint categories. The results clearly indicate that the frozen products such as ice cream candy, ice cream, and sip-up attributed more environmental burden to endpoint categories. The global warming potential related to the products ghee and butter (0.0039 kg CO2 eq.) is high. Relative contributions revealed sodium hydroxide, nitric acid and wastewater were the major impact contributing factors to endpoint categories. Among them, sodium hydroxide contributed more impact to the endpoint categories: human health (99.4%), eco-system quality (96.4%), climate change (97.1%) and resource usage (97.9%). Based on the findings a new eco-design proposal has been proposed for improving the environmental efficiency of the industry. Also, suitable alternatives were proposed to minimise the environmental impacts.