Recently rare-earth elements (REEs) have received increased attention due to their importance in many high-tech and clean energy applications. Although production of REEs is known to be heavy polluting, very limited environmental life cycle assessment (LCA) studies have been conducted. This is particularly true for the solvent extraction (SX) of REEs from aqueous solutions, a key step in the REE production pathway. In this study, an LCA is carried out on a typical REE SX process using D2EHPA/kerosene. The material and energy flow data is based on production information collected from several SX facilities in Inner Mongolia, China. The life cycle inventory is developed using Simapro 8 and Ecoinvent 3, in combination with mass/energy balance and stoichiometry. TRACI is used for impact assessment. LCA results are used to evaluate and identify environmental hotspots of SX process. Moreover, challenges and opportunities for improved environmental performance of SX process are discussed.