With an expanding population and changing dynamics in global food markets, it is important to find solutions for more resilient food production methods closer to urban environments. Recently, vertical farming systems have emerged as a potential solution for urban farming. However, although there is an increasing body of literature reviewing the potential of urban and vertical farming systems, only a limited number of studies have reviewed the sustainability of these systems. The aim of this article was to understand the environmental impacts of vertical hydroponic farming in urban environments applied to a case study vertical hydroponic farm in Stockholm, Sweden. This was carried out by evaluating environmental performance using a life cycle perspective to assess the environmental impacts and comparing to potential scenarios for improvement options. The results suggest that important aspects for the vertical hydroponic system include the growing medium, pots, electricity demand, the transportation of raw materials and product deliveries. By replacing plastic pots with paper pots, large reductions in GHG emissions, acidification impacts, and abiotic resource depletion are possible. Replacing conventional gardening soil as the growing medium with coir also leads to large environmental impact reductions. However, in order to further reduce the impacts from the system, more resource-efficient steps will be needed to improve impacts from electricity demand, and there is potential to develop more symbiotic exchanges to employ urban wastes and by-products.