Cocoa is a minor export agricultural crop currently cultivate in Sri Lanka, which was cultivated extensively in the period of British rulers. But this is one of the most valuable crops among other plantation crops. The use of cocoa fruits and seeds in food industry is the valuable application. Considering the market value, the main important cocoa varieties are Criollo, forastero and Trinitario. There are lot of products that can be made from these cocoa species, few of them are soft drinks, alcohol, Jam and marmalade, cocoa butter for making chocolate, cocoa powder and cocoa liquor etc.. Among them, there are lots of products available in Sri Lankan market, while chocolate plays the main role. Cocoa products are more attractive and customers are always willing to pay more for the best cocoa in the world. The greenhouse gas emissions, waste water and solid waste amounts which are released into the environment are very high from chocolate related industries.  For analyzing that scenario, this paper is aimed at providing a comprehensive picture of the environmental impacts associated with chocolate manufacturing and processing, which is the main cocoa product in Sri Lanka by applying life cycle assessment (LCA) methodology. The analysis considered the entire system required to produce 1Kg of dry cocoa beans and 1 Kg of pure chocolate. It included the agricultural inputs in cocoa production, all agricultural operations in the field and transportation. Processing and all other related process steps in chocolate manufacturing were taken in to account. The main concerned environmental impacts are carcinogens, respiratory organics, respiratory inorganics, climate change, radiation, ozone layer, eco-toxicity, acidification/eutrophication, land use, minerals and fossil fuels. Damage assessment is conducted along the human health, eco system quality and resources. The study was conducted in accordance with the international ISO procedural framework for performing LCA in the ISO 14040-14044 series. The overall environmental impacts resulting from Chocolate manufacturing and processing activities and improvement options towards the sustainability of the system studied are presented and discussed from the overall research.