The denim sector, particularly in developing nations such as Bangladesh, is drawing increasing attention due to its significant environmental impact. Traditional denim production processes involve high water and energy consumption, synthetic chemicals, and unsustainable raw materials, all of which contribute significantly to pollution and resource depletion. While environmentally friendly substitutes are emerging, their overall environmental performance in the local setting remains underexplored. Following ISO 14040/44 standards and the ReCiPe 2016 Midpoint (H) methodology, this research intends to assess and compare the environmental impacts of traditional and eco-friendly denim manufacturing in Bangladesh through a cradle-to-grave life cycle assessment. Seven key impact categories were analyzed: climate change (greenhouse gas emissions), water consumption, terrestrial acidification, eutrophication, land use, fossil resource scarcity, and human toxicity. The functional unit was defined as 1,000 pairs of denim pants. Data were collected through field surveys, interviews, utility records, and secondary databases. Compared to the traditional model, the environmentally friendly scenario demonstrated significant reductions in environmental impacts, including a 30% reduction in climate effect, 64% reduction in water usage, 50% in acidification, 40% in eutrophication, 41% in fossil resource use, and 50% in human toxicity. Although sustainable production required 10% more land, the advantages in other categories outweighed this trade-off. Monte Carlo simulations were conducted to address uncertainty and validate the robustness of the results. This study offers a context-specific dataset for industry players considering investments in sustainable technology and highlights the clear environmental advantages of adopting greener production techniques. These insights can inform targeted policy changes and assist in the larger shift toward environmentally friendly textile manufacturing in developing countries.