District heating is a technology for distributing centrally produced heat for space heating and sanitary hot-water generation for residential and commercial uses. The objectives are to identify which subsystems and components of a district heating grid are the main contributors to the overall impact of the infrastructure; and provide environmentally oriented design strategies for the future eco-redesign of these kinds of infrastructures. This paper performs a life-cycle assessment (LCA) to determine the environmental impacts of a district heating infrastructure in an urban neighbourhood context. The analysis covers seven subsystems (power plant, main grid, auxiliary components of the main grid, trench works, service pipes, buildings and dwellings) and twelve standard components. The results for the subsystems show that the sources of impact are not particularly located in the main grid (less than 7.1% contribution in all impact categories), which is the focus of attention in the literature, but in the power plants and dwelling components. These two subsystems together contribute from 40% to 92% to the overall impact depending on the impact categories. Concerning the components, only a reduced number are responsible for the majority of the environmental impact. This facilitates identifying effective strategies for the redesign of the infrastructure.