<p>Municipal solid waste incineration is increasingly used in China to balance urban growth with environmental and energy demands, yet challenges remain in pollutant control and by-product utilization. Here we compile operational data from 876 incineration plants across China and apply life cycle assessment models to systematically evaluate their environmental and economic performance. We find advanced flue gas treatment reduces harmful emissions but slightly compromises carbon benefits, whereas optimized leachate management achieves both emission reduction and carbon gains. Fly ash resource utilization can further improve environmental and economic outcomes, while waste classification and co-incineration strategies enhance plant viability. Our scenario simulations suggest that stricter emission standards, expanded classification, and targeted co-incineration can yield substantial carbon-negative and financial benefits. These findings highlight the synergistic potential of pollution control and resource utilization in shaping the sustainable transition of China’s waste-to-energy industry.</p>