Renewable resources such as biomass are essential in increasing energy security and enabling countries to reduce greenhouse gas emissions. Biomass can be converted into biochar, bio-oil (clean fuel), and valuable chemicals using a thermochemical process. Among thermochemical approaches, hydrothermal technology such as hydrothermal carbonization, hydrothermal liquefaction, and hydrothermal gasification are gaining research interest due to their cost-effectiveness, environmentally-friendly method, and produce high product yield. Hydrothermal technology is developed to transform different types of wet biomass into value-added products such as biochar or hydrochar, bio-oil, and syngas. This systematic review aims to describe hydrothermal technology and the life cycle assessment (LCA) of hydrothermal biomass conversion. Firstly, a systematic review of hydrothermal technology and LCA was carried out using the PRISMA method to analyze publication trends, current research developments, hot topics, and knowledge gaps. Secondly, this review presents the fundamental concept of hydrothermal technology and summarizes the up-to-date technology on hydrothermal carbonization, liquefaction, and gasification. Next, LCA guidelines and the current progress on LCA of biomass conversion using hydrothermal technology are discussed. In addition, the available literature that related to techno-economic evaluation of the hydrothermal process is reviewed. Currently, very limited study has reported on the environmental and economic impacts of hydrothermal biomass conversion. Therefore, to provide a sustainable and green process that can be applied in a commercial plant, a study on environmental impact is critical to show the benefits of biomass hydrothermal processing. This review also presents a step-by-step guideline for beginners and researchers to venture into this field to understand the LCA framework. Transfer of success in lab-scale to large-scale setups (industrial) demands consideration of several criteria, as well as careful and holistic analyses such as the environmental impacts of the overall process from feedstock (biomass) to final process (product).