In the Greater Houston Area, mobile sources contribute to the highest share of NOx emissions and the second-highest share of VOC emissions. The Houston METRO system that operates public buses is a key element of Houston’s infrastructures that could reduce the emissions of criteria air pollutants (CAPs) and greenhouse gases (GHGs), thus improving the regional air quality. We used life-cycle assessment (LCA) and life-cycle cost analysis (LCCA) to evaluate the environmental sustainability of electric buses and compared it to diesel buses. The LCA simulations demonstrate that life-cycle emissions of GHGs, VOCs, NOx, and black carbon associated with electric buses are lower than conventional diesel and diesel hybrid buses. These lower emissions are mainly attributed to the fact that natural gas currently makes up about 50% of the fuel used to generate electricity in Texas. However, other emissions such as PM10, PM2.5, SOx, N2O, and primary organic carbon are higher and would lead to the higher environmental cost of electric buses than diesel buses. The environmental cost analysis estimates that the annual cost savings of electric buses in 2040 would significantly support the long-term goal of environmental sustainability in the Greater Houston area.