The naval sector holds paramount importance for the global economy, yet it entails significant environmental impacts throughout the entire life cycle of ships. This review explores the application of life-cycle assessment (LCA) in the naval sector, a methodology for evaluating the environmental impacts associated with all the life stages of a product or service. LCA analysis in the naval context is essential for identifying and mitigating environmental impacts, thus promoting more sustainable development of the sector. This work provides a comprehensive overview of current LCA applications in the naval sector, highlighting major environmental impacts, in particular focusing on greenhouse-gas emissions and climate change. Additionally, this study integrates an analysis of greenhouse-gas emissions using a normalization approach, which has enabled the comparison of various types of fuels and ships, thereby enhancing our understanding of their environmental impacts. Moreover, the limits and challenges to applying LCA in the naval sector are discussed, offering insights for future research and developments in the field. This review aims to raise awareness among policymakers, designers, and operators in the naval sector about the importance of adopting LCA for more sustainable and responsible management of naval activities, thereby contributing to the protection of the marine and global environment.